This week; I was calling to make showing appointments. On one call, the agent says to me; "Oh, we are about to lower the price, it will be a short sale".
Now if anyone has experience with short sales; (MOST REALTORS have NO CLUE) - you know that it is not an easy process. Now it CAN be done; if the steps are followed and the agents know what they are doing.
While I am not (yet) a short-sale expert; I understand the process and have worked a couple. I "get-it". I will be an EXPERT... soon !
If you need "HARD CORE REAL ESTATE INFORMATION" Read Lenn Harleys Post: SHORT SALES: THE APPROVED, THE POSSIBLE AND THE WISHING WELL.
So this agent tells me... "Oh you saw the Commission in the MLS. It is correct. We are paying X%."
Of course I never discuss commission % in public; but let's just say it is "The Area's normal commission" PLUS 1%. I know - as any agent that has EVER done a short sale that the bank will never pay this X% !!!
So I ask; "It is a Short Sale?" "The Bank has approved it?"
Then Mr. (No clue what a short sale is) says; oh yeah - we sent the "paperwork in". Which is code for "I HAVE NO FLIPPIN CLUE WHAT I AM DOING AND NO; THE BANK HAS APPROVED NADA!"
More importantly; for the listing agent - since he is advertising X%+1 in the MLS- He better be prepared to pay it.
I can pretty much guarantee - he; the listing agent and his broker will walk away with about (x% - What the bank feels like - 1%). After his Broker's split; the agent will have about $500; less marketing costs and MR. IRS - he may have enough to fill his car with gas for his next Short-Sale Listing Appointment!
While I never expect to receive a "Full" (whatever you define as full) Commission on a short-sale; you better darn well expect; that if you advertise X% in the MLS; I WILL hold your feet to the fire!
Sellers going through a Short-Sale are in real trouble. Whether it be that they didn't read their loan docs; had a shyster loan officer or REALTOR or ran into some unforeseen circumstance. We can point the finger later! They need us - EXPERTS - to help them!
Now they need us. They DON'T need a bunch of REALTORS saying "I can help" - "I know what I am doing" - when the truth is we have no real clue!
I am learning short-sales and am NOT an expert - few agents are experts. I am learning more and more and am educating myself like crazy. I am also not afraid to tell a client that! Trying to convince clients that we know more than we do - does NOTHING FOR US - or our clients - nor does it give our client "Warm-Fuzzies" and want to refer future business to us!
Let's get real folks. If you don't "GET" Short-Sales - It's OK. Most Agents DO NOT. Refer them to someone with more experience and educate yourselves. Working your butt-off on a Short-Sale and failing because you do not understand the steps = ZERO Commission and MORE IMPORTANTLY.....
A FAILED SHORT SALES = FORECLOSURE !!! The Family will most likely get kicked out on the street!
Referring to an agent who understands, while you learn the process.... PRICELESS.
(For All Others there is Lenn Harley)...... (Nothing funny about Short Sales... just an attempt at Humor to lighten the post...)
In all seriousness folks.... Let's Educate Ourselves and stop pretending we are something that we are not!
Call James for all your Real Estate needs and questions; servicing Washington DC, Virginia and Maryland.
RE/MAX Allegiance - Georgetown
1720 Wisconsin Ave NW
Washington DC 20007
202-338-8900 Main Office
Licensed in DC,MD,VA
Licensed in DC, Maryland & Virginia. James specializes in Relocations and 1st Time buyers. As an Accredited Buyers Representative (ABR); he's better qualified to help home buyers find their dream home
Questions Consumers Ask.... Dangerous Answers?
Residential Street Sweeping to Resume March 24
Washington DC; Single Homes For Sale
Buyer's - Does your REALTOR really want to save you $$ ?
Washington, DC : Market Update 3/10/2008
FOR SALE - Washington DC, Brookland - Top Floor - 2 Bedroom Condo - with Parking!
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2008 ActiveRain Corp. All Rights Reserved
Thanks for the mention James.
I just spoke with a buyer who wanted to look at a $285,000 short sale listing and she's approved, she thinks, for $200,000.
It's not only the agents who don't know what they're doing. The buyers don't either.
You have to become educated on short sales these days because they are everywhere. Not easy to do and very frustrating but lately unavoidable.
I am not a Short Sales expert myself James. Lenn to me knows just about anything in Real Estate. From all of her posts she has written,she is a very knowledgable real estate professional. I will pay for the chance to have a sit down with her and pick that very smart brain of hers. She should change her name to Lenn"Real Estate"Harley. Thanks for writing this post. Great post james.
It is a tough nut to crack, in the best of times. I was lucky that I learned the ropes of Short Sales in the days when banks actually had people call you back. So a kinder, gentler Short Sale experience. Now I expect that the experince will take 3 months at the least.
I guess I did one short sale. The house was worth about a million and sold for about $500000 with the bank's approval. I'm sure the seller was held accountable for the rest. But the most interesting short sale was one that I just observed. The seller was in jail! The listing agent had to go to extreme lengths to see him and get signatures. They are definitely NOT EASY.
Great info and insight James! Thanks for sharing it. For another component of this discussion, check out Be Smart: Make the Right choice, not the Easy one!
There is definitely a life shattering effect that accompanies a failed Short Sale transaction and we all need to have that in mind to guide our efforts on behalf of our Short Sale clients.
James- I agree with your comments - I get very irritated when I see high commissions offer in the MLS for a short sale. I have not problem stating that for the most part you will not get paid more then 5% total commission on a short sale. There are exceptions and I have heard the very, very rare occasion when more was given - but that is more the exception then the rule.
Many times you have to fight for a 5% commission and if you are successful at getting your short sale accepted you had better be 100% sure that the net sheet you have submitted to the bank is not missing anything because if it is - most likely it will come out of your commission if you want to close the sale.
Agents - if you are going to take on a short sale - do not take try to do it all by yourself if you have no experience. You will not be doing your clients any favors and chances are very unlikely you will get it accepted unless you know what you are doing. There is skill and a lot of patience involved with short sales. It will take you twice as long, 5 times the amount of work and a smaller paycheck if you decide to handle the sale. So be sure your heart is in it - and you are not taking the listing to satisfy your own ego.
Great points James and Len too about buyers. It is a murky world to most and you better get it clear real quick or end up in the **%#!
James - You make such good points. It's crazy too because the process for each bank is different so just about the time you become an expert - someone changes the rules!!! Who says that is fair!?!?!
I like you, am trying to educate myself for a short sale listing appointment I will have later this week.