Our real estate agent doesn't want to do a short-sale?

[bgkob]

Me and my wife are planning on buying our first home by July. Our agent is pretty much refusing to do a short sale. We found a property that me and my wife love, but, of course it is a short sale. I was wondering a few things. Does our agent get a smaller cut because it is a short sale or does he just not want to put in the work involved? Don't get me wrong, I know our agent is looking out for us, but at the same time I know its human nature to look out for yourself and I hope our agent is not doing the latter...

[mack]

Here's the problem with short sales: Often, a short sale is something the seller heard about and wants to try. So, he retains an agent who lists the home as a short sale. But wait a minute: Did anyone talk to the mortgage holder yet? Does anyone have any idea what the mortgage holder will accept? Often times the answer is no. The seller hopes he can find a buyer at a price the mortgage holder will accept. But, when he springs this on him, the mortgage broker then has to decide if they will accept the price or not. Remember, lenders aren't set up to loose money on deals.

However, even when the mortgage broker has been brought into the loop, they usually delay responding in the hope a higher offer will come in.

I can understand your agents reluctance to go the short sale route. (I recently had to write 5 short-sale offers for one client over a two month period before we finally found one that would work.) It's a tough way to go, but you can find a deal if you are patient and don't fall in love with any one house. Good luck.

[satarnag01]

The commission is not the issue as it is generally the same of a retail listing. The issue is that your agent doesn't know how to purchase one properly (along with other agent complaining about them). So they write up offers only to be stringed along for months and the listing agent ends up selling to someone else. It's basically a lot of work and effort for the ill informed! They rather sell you something quickly and with no or little waiting and less effort. If you have the patience, they can be the best purchase out there. Here's the trick:
1. find a short sale in which no offer was submitted to the bank.
2. Have your agent submit a purchase offer below the lowest 3 sold and 3 active comps he/she can find. Depending on price range and area, you can go 10-30% below the cheapest thing you find. Ask the seller to pay for everything and give you 3% for your closing cost. Make it known that you will cover any expenses that the lender rejects or any differences between what the 1st lien holder is willing to pay to the 2nd lien holder and what the 2nd lien holder is willing to accept.
3. To make sure that the seller only sells to you and doesn't submit another purchase offer to the bank, tell the seller you will buy some fixtures in the house, such as the kitchen faucet/sink or whatever for a 1k-3k (whatever you can negotiate depending on the discount). If the seller is not known or around, you can bribe the listing agent that you will gaurantee him/her 3% commission should it get knocked down or pay a "short sale processing fee" to him/her for thier time on negotiating the short sale. You might have to do both! Now the house will be yours even if a higher offer comes in.
4. It's very important that when the bank sends their appraiser, either your agent or the listing agent meet the appraiser and give them the comps and write up a BPO (ask your agent what that is). If all goes well, the bank's appraiser will report the low value to the lender and the lender will accept your purchase offer.

There's more, but that's the core. Some Pointers:
1. never spend a dime or give a deposit on a short sale until you get written approval from the foreclosing lender that they will sell to you.
2. Make as many offers as you like to as many short sales you like and see which ones get accepted to your terms first.
3. You will only lose the house if someone promises to rent back to the owners, offers them more money or if they are having a family member or friend buying the house to sell back to them in 3-5 years.
4. Pre-screen the listing agent to make sure he/she knows how to do short sales.
5. Short sales can take time. The fastest I had one done was in 3 weeks and the longest is 8 months! However, the 8 month listing, the buyers still got it at a good deal.

Now you are a smart buyer of a short sale. My buyers always get the home at below bank owned prices. Now you can educate your agent!

[Ryan M]

The process for a short sale is VERY time consuming and can take months. The agent is probably not willing to dedicate the next 2-3 months of their life to this one sale. They work on commission, therefore the more time one sale takes, the more money YOU are costing them. I would not be surpriced to start seeing mroe agents refusing to do these deals

[dustoff]

Short sales are very difficult to close. Most attempted short sales fail. Be prepared for a LONG wait if you make a short sale offer.

IMHO, you'd be better off looking at REO properties (bank-owned foreclosures).

[Othniel]

Short sales often mean many hours of work that do not result in a closing. Trust your agent in this case. Those of us who have gotten burned do not relish the experience and our clients somehow put the blame on us.

Cut him some slack and respect his experience. Look for a house on the market with the features that make this property so attractive to you. Save your own time and the frustration of trying to buy a short sale.

[jenny.smith]

The process of selling a lot of time and may even take months. The agent is probably not willing to spend the next 2-3 months of his life to this sale only. They work on commission, therefore, the longer a sale, the more money it will cost. I surprises to start seeing more officers to reject such offers.