Short Sale Woes

The St. Paul listing agent moaned and groaned about the misery of listing short sales.  The unresponsiveness of lenders was the primary complaint.  For an agent to submit an offer and wait months, not weeks, for a response was beyond his comprehension.  What were the lenders thinking?  Why would they stall in this market?  Do they want to own property?  About the time I was going to offer him some cheese to go with his "whine", he finished the tirade with, "I'm just not going to list any more short sale properties.  They aren't worth it!"

I pulled my eye brows from the roof of my car and wondered about that last statement.  My latest experience has been that more than 3/4 of the listings today are short sales with a few foreclosed homes tossed in for seasoning.  To refuse to list a short sale would take the headache out of negotiating a difficult transaction, but wouldn't refusing all short sales be a kiss of death to one's business?

Short sales are frustrating to everyone in the business.  The brunt of work lies in the listing agent's lap.  Compiling the mass of documentation required for the sale is the listing agent's duty.  Submission of the same packet of paperwork is also the agent's job.  Negotiating with the lender's mediator is the listing agent's job.  Pressing the lender for a decision is the listing agent's job.  A whole pile of responsibility lands in the listing agent's lap.  It's no wonder an agent might complain.

The frustration of short sales for the buyer's agent is not having control of the transaction.  The buyer's agent must rely solely on the listing agent's communication, or lack thereof, with the lender and the buyer's agent.  There is no first hand contact with the lender.  Advising their buyer client regarding whether to continue to patiently await the lender's decision is a terrible dilemma.  Yes, short sales take a long time to complete but some don't happen.  What if the buyer's agent advises to wait patiently, other opportunities are lost in the interim, and then the bank ends up rejecting the offer?  If we could read the future . . .

The listing agent had good basis for whining.  I still questioned whether an agent in the St. Paul market can avoid dealing with short sales.  From the buyer's agent perspective, there are far too many short sales on the market to avoid showing them to buyers.  Most are also a good deal financially.  How can a St. Paul real estate agent narrow their business to less than 25% of the homes going on the market without some dire consequences?

Comments

[gary thomas]

Almost a year since you wrote this item.Things have not changed. Most of our market except Old Town and the trendy Casa Marina areas have tanked because of the mass of short sale and bank owned properties.

Gary

[Avoid Foreclosure]

This site may be useful to some of you guys and gals.
It has some practical information on how to avoid foreclosure.

http://www.howtoavoidforeclosure.org/

Good Luck

[Bonnie Erickson]

That's been our experience here as well. I took a class to make sure I wasn't missing any of the details and one of the examples given in class, helped to explain the stalling. Basically, the lenders are so overwhelmed, they only want to work on the files in which they can recoup some money. Those files get priority and the others shuffle to the bottom of the pile.

[Carole Cohen]

Here's my tale: two short sale listings; one took from Oct 1st until April 26th to 'get accepted' by the bank; during that time we had a young woman who wanted to buy it who dropped out of the race and then our County Hsg authority 'hung in there.' Now the lender said yes but guess what you have to close by May 11th. Oh and the pipes got stolen in the meantime. Hsg Authority pulled out too. Now the lender can sit and lose more money. I'm not fond of listing these let me tell you. Would rather show foreclosures too!