Short sales: List and do your best, or refer it and forget it?

For most agents, taking a short sale listing can be like throwing a wrench into a smoothly running machine. Unless you reorganize your entire business, listing and selling just a single short sales can drain your resources and effectively prevent you from closing potentially two or even three other listings. Maybe not for everyone but that's what other agents tell me over and over again.

I also know firsthand because I did them alone for years with no help and no systems to make the process easy or efficient. And frankly, I was broke because of it. It wasn't until I made the commitment to specialize in Short Sales, and hire staffing specifically for Short Sales, that I was able to finally make any money at all. Even now, the profit margin is miniscule compared to typical brokerage but over the years, I've added systems and procedures to maximize productivity an increase success so that almost every single listing sells. Only recently have I finally managed to make working in the Short Sale business profitable.

As an individual agent with less than 12-20 short sales and no assistants, I know it's nearly impossible to close a short sale quickly and do it in a way that actually nets you something in return for your time. But these days, despite the low return and high effort, everyone does short sales because if you don't then your listings don't sell. I get it and it's for that reason that I rarely take non-short sale listings. But that works for me and it probably works for a lot of other short sale specialists because our business is geared towards that and designed to work in this arena of brokerage. A lot of you hate it (just as I do sometimes :-) and that's probably why about 25% of my listings are actually referred to me by local Realtors. In the end, its guess really about what works for you that determines whether you list it, or refer it.

I'm closing on a listing next week that's $280k (almost 400k mortgage!) and I'll pay about $2,500 to one of the area's most experienced REO agents for the referral. She's been in the business a lot longer than me and I'm pretty sure that she has a staff of her own so of course, she could easily close a short sale. But she chooses not to because this is not her specialty. She's said a couple of times that to take on something else would just prevent her from focusing on what she's best at. Plus, she just really hates to deal with them. Now, she can just ignore short sales, refer them out and a few months later she gets a check for $2500. The only thing she has to do is send an email.

Just as I did back in 2005, a lot of Realtors have decided to start targeting short sales and trying to focus on that specifically. Well, for the masses of agents who have taken the CSP or SFR designation courses, I still want your referrals too! I've really enjoyed being able to help so many local agents and I want to be able to do more in that area by devising a plan which incentivizes even those out there who don't know me to send your referrals to me. After doing the math on my end, I'll be writing her that $2,500 check gladly and to be honest, it could be for even more. One short sale can cost a general brokerage agent a lot of time (which is money, too) but for me, it's really just one more listing. Everything I do is based on bulk and the more listings I have which all have exactly the same requirements, the easier it is to address those requirements and with even greater success.

So in order to increase this branch of my business, I'm making an offer to any Realtor across the nation of increased referral fees, up to 40%for short sale listings over 300k but increased rates for lower priced homes as well. I only ask for your pictures, measurements, and the use of the lockbox you placed when you first listed the property. This saves me a little money because it keeps me from having to pay a runner to visit the property immediately. We do go out, we just do it in bulk a couple of times per month. Obviously, I want your listings and of course, I think it has a lot of benefits for you and your clients as well. My chart is below, this is new and this posting isn't just an advertisement, I would welcome your feedback. What would it take for you, to refer your short sale to me? :--)