Massachusetts Real Estate

head_left_image

Realtors Will Be Sued From Botched Short Sales

Original article source: Massachusetts Real Estate Blog ~ Short sale lawsuits against Realtors

Avoiding short sale lawsuits

                                                                                                                                                             Realtor short sale lawsuits

There is no question that in this economic down turn we have experienced over the last five years or so that short sales and foreclosures have become part of out everyday Real Estate landscape.

Every week there are countless new short sale listings that hit the market in Massachusetts. In many of these short sales the seller, not understanding there is a big difference between a traditional Real Estate transaction and a short sale hires any ole Realtor® they happen to come across to represent them.

One the other side of the coin, there are also plenty of Real Estate agents that see the growing number of short sales coming available for sale and realize there is a lot of money to be made.

The problem however, is that many of these agents are flying by the seat of their pants and have done nothing to educate themselves on the ins and outs of closing a short sale.

As a Realtor® who has been successfully closing short sales for almost four years, this is one of my biggest pet peeves! How anyone can look a desperate seller in the face and take on a listing to sell their home with no short sale expertise is just beyond me. It pisses me off when I see a new short sale listing hit the market and know the agent has no track record with this type of transaction.

There are many Realtors® that are putting the noose around their own neck. In desperate times people do desperate things. The end result is that on many occasions consumers get very poor advice that can cost them dearly.

Realtors® that do not have short sale expertise could really do themselves a favor by referring the business out to an agent that is qualified to get the job done.

You may be wondering why this has become such a passion of mine? The answer is simple. Short sales have become stigmatized because there are numerous Real Estate agents and buyers that have been involved in deals where the listing agent did not know what they were doing. The end result for a number of different reasons is a sale that didn’t happen. This leaves a bad taste in everyone’s mouth. Going forward it makes it harder for the agents that do know what they are doing to find buyers for the short sales they are marketing.

Below I am going to touch on all the things you should look out for in trying to successfully complete a short sale whether you are in Massachusetts or another state.

Properly pricing a short sale

When you are short selling your home there is a good chance that you are not able to afford the monthly mortgage payments any longer. You may be just scraping by and know that next month you won’t have enough to pay your lender. When you decide to short sell your home and are no longer paying your mortgage pricing the home properly becomes critical.

The last thing you want to do is either over price or under price the home. For obvious reasons if you over price you will more than likely not be able to procure a buyer in a timely fashion.

If you under price the home and receive a contract from a buyer, the lender is going to reject the short sale after reviewing the appraisal or broker price opinion that they order.

Both of these scenarios can leave you with nothing and that much closer to a foreclosure. A short sale should be aggressively priced such that you will find a buyer in a timely fashion but not so low the lender is going to reject the short sale contract.

The short sale contract

There are numerous Realtors® that are clue less when it comes to giving sellers advice on the short sale Real Estate contract. Lets get one thing straight right off the bat….. When a seller signs a Real Estate contract it is almost always legal and binding as to the terms and conditions in the agreement.

Here are 4 short sale contract issues you need to be aware of:

  • Realtors® submitting multiple unsigned offers to your lender
  • Realtors® submitting low ball offers to the lender
  • Realtors® allowing home inspection contingencies after short sale approval.
  • Realtors® allowing an investor to negotiate the short sale
  1. When a Realtor® submits an unsigned offer to your lender YOU do not have a legal and binding contract. The buyer can walk at any point in time with no consequences to them! Does this benefit a seller in anyway? The answer is NO NO NO!  The Realtor® you hire should be looking to lock up the most qualified  buyer who stands the greatest chance of getting to the closing table.
  2. If you sign a low ball offer you stand an equally strong chance that the lender is going to reject your offer and send it back. If you accept an offer that is no where near the market value do you really expect the buyer is going to agree to the price the lender wants? Not likely and again you will be back at square one after being off the market for an extended period of time.
  3. Allowing home inspections after the short sale approval is another big mistake. Do you really want to have your home off the market for months, get a short sale approval from your lender and then find out the buyer wants to back out due to inspection items? Don’t let the blind lead the blind. There is no reason for letting a buyer have home inspections after short sale approval. I find most buyer’s agents think they are protecting their client by trying to save them from spending a few hundred dollars. WRONG – what the buyer’s agent is preventing is the buyer from negotiating a pricing discount if there were issues discovered. Lenders DO NOT negotiate home inspections issues after short sale approval.
  4. Letting a buyer negotiate for a seller is clearly foolish. The investor only cares about the seller if they get the terms THEY want.  An agent who lets an investor take over a short sale transaction is asking for a lawsuit. Realtors should not let investors negotiate a short sale!

Short sale negotiations

Massachusetts short sale RealtorThis is clearly an area where you will see most of the lawsuit’s against Realtors®. There are agents who are engaging lenders in the negotiations of short sale approval but don’t have the knowledge and understanding of either short sale debt release and/or short sale tax ramifications.

Who do you think will get sued if a seller receives a 1099-C or 1099-A at the end of the year or gets stuck with a deficiency judgment by their lender(s) at some later date in the future and they were not informed up front about it?

There are many Realtors® who have negotiated short sales that misrepresented to their client that the short sale approval letter removed the short sale deficiency when in fact it did not.

Realtors® are supposed to abide by the Real Estate Code of Ethics but clearly there are many who’s judgment is clouded by the almighty dollar.

The Code of Ethics clearly states:

Article 11  Realtors® are knowledgeable and competent in the fields of practice in which they engage or they get assistance from a knowledgeable professional, or disclose any lack of expertise to their client.

Article 13  Realtors® do not engage in the unauthorized practice of law.

Speaking of giving legal advice, there are Realtors® who are guilty of telling their client to stop paying the mortgage to complete a short sale. While this may be the proper advice in 9o-95% of most circumstances with short sales what if the sale falls into the 5-10% where stopping payment was not necessary?

Most major lenders may require payment stoppage but some of the smaller lenders do not have that guideline. Telling a seller to stop paying the mortgage could have serious consequences on their credit that could have been avoided. Again Realtors® should not be giving this kind of advice. It should come from a lawyer.

The take home message here is to make sure you do your home work when hiring a Realtor to represent you in your short sale!

I am successfully completing short sales through out the Metrowest Massachusetts area. As of this writing for almost four years, knock on wood, I have a 100% success rate for short sale approval! I work hand in hand with a local short sale Real Estate attorney who knows how to get short sales done! I will admit there is some luck involved in my success rate but the team I have put together does a stellar job.

If you are outside of the Metrowest Massachusetts area or even in another state and need to do a short sale please feel free to contact me and I would be happy to refer you to a Realtor in your location that handles short sales and has an understanding of the short sale process! I have referred numerous short sales to other Realtors all around the country.

___________________________________________________________________________________________________

About the Author: The above Real Estate information on Realtor short sale lawsuits was provided by BillRE/MAX Executive Realty Metrowest Massachusetts Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356.

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise!

For Massachusetts short sale Real Estate information see Massachusetts short sale. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service Real Estate short sales in the following towns in and around Metrowest Massachusetts: Hopkinton, Milford, Upton, Bellingham, Southboro, Westboro, Ashland, Holliston, Mendon, Northboro, Shrewsbury, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Framingham, Natick and Douglas MA.

 

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 24 years.

Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comment balloon 160 commentsBill Gassett • November 30 2010 08:04AM

Comments

Very detailed post.  Should get a look in the featured section.

Posted by Chuck Carstensen, Minnesota Real Estate Expert (RE/MAX Results) almost 9 years ago

I was just ready to hit the suggest button when zap - it was gone and the little star had appeared.  Another fabulous post on a very hot topic these days.  Seriously, well done Bill

Posted by Lee & Pamela St. Peter, Making Connections to Success in Real Estate (Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522) almost 9 years ago

Agents also need to be very careful with short sales in general.  Agents must know how a Short Sale negotiation is viewed in their state.  Some states are requiring that the negotiator have a Mortgage Loan Originator's license. 

Here is GA's interpretation direct from the GA Dept of Banking & Finance website:

Q: In a short sale context, can a real estate broker or salesperson provide facts and information regarding the subject property to the lender.
A: Yes. Providing facts and information to a lender for a client does not require the real estate broker to obtain and maintain a Mortgage Loan Originator License.

Q: In a short sale context, can a real estate broker or salesperson negotiate the terms of loans for their clients?
A: No. Negotiating terms of any loan and/or modifying the current loan terms for a client with a lender would require a Mortgage Loan Originator License.

Posted by Rodney Mason, AL, GA, SC, & TN (Guaranteed Rate) almost 9 years ago

Bill,

The lawsuits are coming...I have no doubt. Some of them will be deserved too because the agents took on a task outside the scope of their experience and training.

Good info.

Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) almost 9 years ago

I have my possible short-sale sellers contact an attorney that I work with before I list it as a short-sale: He lets them know all the ramifications before I get involved. Great post, Bill.

Posted by Toni Weidman, 20+ Years Selling Homes in New Port Richey, FL (Sailwinds Realty) almost 9 years ago

Bill,

 

I am pleased to say that there really aren't any short sales in Toronto (perhaps a handful). But, you point is well taken about knowledge on the part of the agent.

Many are not really up to speed on the issues. That can come back in the form of a lawsuit.

 

Brian

Posted by Brian Madigan, LL.B., Broker (RE/MAX West Realty Inc., Brokerage (Toronto)) almost 9 years ago

Good advice. Too many in our profession are guilty of 'practicing law.' I'm always happy to defer questions I shouldn't answer to an attorney or a CPA...

Posted by Jason Rankin, 865.475.3236 (Rankin Real Estate Services) almost 9 years ago

Bill good points. We are seeing more and more distressed properties in our market and agents that are having hard time with regular transactions taking them on. Short track to disaster.

Posted by Joan Zappa, Professional treatment of our clients, brings awes (Eagles Wings Realty) almost 9 years ago

Anyone who has not been doing short sales should read this post - excellent information that could really save an inexperienced short sale agent a lot of grief.

Posted by Susan Thompson-Solomons, Southern MD Real Estate-Solomons Specialist (Berkshire Hathaway Home Services McNelis Group Properties) almost 9 years ago

Great post.  Lots of perils in this business.

Posted by Anonymous almost 9 years ago

Great article as I can completely relate and agree with all of it!  I would consider myself to be a short sale specialist and it something that I've had to work hard at studying and continual growth.  When I first started in the short sale listing business I paid a third party specialist with a great closing track record to ensure my sellers that my team and I were going to get the job done, we always did.  I studied and worked very closely with my negotiator to learn as much as possible.  I would definitely encourage agents that don't specialize or understand the process to definitely refer out to a qualified agent the short sale instead of putting their sellers in jeopardy.

Posted by Brenda Winans (Coldwell Banker Preferred) almost 9 years ago

Bill, this is an excellent post on short sales for both the consumer (especially!) and realtors who are not experienced in the process & don't have a well orchestrated team to make it happen.  Your success rate is excellent & works well when the realtor does their due diligence in following the appropriate guidelines..i'm reblogging.  thanks

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) almost 9 years ago

I couldn't have written this any better and could not agree more!  It is disgraceful the way some agents will outright lie about their Short Sale track record just to get a listing, without regard for the Seller facing foreclosure.  Bring on the lawsuits and scare these clowns away before they hurt more homeowners!  

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (Haven Express @ Keller Williams Arizona Realty) almost 9 years ago

Bill,

I agree with much of what you wrote.

Laws vary from State to State. The Texas Short Sale Addendum sets up a contingency and, with the exception of delivering the earnest money and option fee, the date the lender(s) approves the sale is the adjusted execution date.  This new date starts the various contingency clocks.

I'm not an attorney nor a tax accountant. We send the approval letter(s) to the sellers with a cover letter advising them to have it reviewed by an attorney and the CPA if they have any questions or concerns.

I don't think it's ethical to tell a seller to "stop paying the mortgage" under any circumstances.

Tom

 

Posted by Tom Branch, Broker, CDPE, SFR, ACRE, Plano TX Ambassador (RE/MAX Dallas Suburbs) almost 9 years ago

Thanks everyone for all your comments on my short sale article. It really would be great if the general public did a lot more research on who to work with when trying to get out of a difficult situation.

Rodney - It is interesting to hear about Georgia's laws. It makes a lot of sense!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

Bill, great points... and all very true.  On that note, how would you recommend new Realtors gain the necessary experience in order to be able to best serve their clients?  Would working with a Realtor with short sale experience suffice?  How does a new Realtor gain the knowledge?

Posted by Christopher L. Arienti (Keller Williams Realty) almost 9 years ago

Chris that is an excellent question. There is nothing better than experience and being in the trenches working short sales. Obviously when you 1st start handeling them you are at a disadvantage because you can learn something new in many of the transactions. If short sales are of interest I would partner with someone who is successfully closing them and ask for them to mentor you. I would also recommend taking some of the short sale courses that are offered by the local RE board. Lastly, if you know an attorney who does short sales and could partner with them that would a great sounding board.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

Here in Colorado, there are a lot of companies who will handle the short sale for an agent to decrease liability for the agent.

Posted by James McGary (Agents Set Free, Inc) almost 9 years ago

I don't believe that incompetent short sale listing agents will be sued in much larger numbers than the incompetent agents that list in any market.  Few get sued. 

Buyers or sellers would have to hire attorneys and until attorney begin to take these cases on contingency, it's probably not going to happen.

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 9 years ago

Great article! Although I disagree slightly with your comment: "...if (emphasis added) a seller receives a 1099c...". It is not up to the bank whether you owe tax or not or whether they issue a 1099c or not. If debt is forgiven (greater than $600), a 1099c may be required, that is an IRS rule and not something that can be negotiated away. Whether the seller actually owes any taxes is a whole 'nother matter that should be addressed by an attorney or accountant. Here is a link to the specifics on the IRS website: Ten Facts About Mortgage Debt Forgiveness

Posted by Linda Humphrey, CRS, Broker/Owner HHC Realty (Humphrey Home Connections Realty, Reno, Nevada) almost 9 years ago

Lenn I have thought about the contingency aspect. Most will not consider suing because they don't have the money to persue legal relief. I think there will be some bold attorneys that will take cases like these on contingency when they know they have a great case and find a Realtor with deep pockets - why not?

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

I see a number of agents in Sacramento who are putting the gun to their heads under the guise of being a short sale agent and they're just not pulling the trigger yet. I'm betting we will see a ton of lawsuits in California. 

I agree with all of your points except for #3. That's more of a local custom. It's not that I don't believe it's worthwhile to conduct a home inspection prior to short sale approval, but lottsa luck getting buyer's agents in Sacramento to tell their client to do it. I can barely get them to put the earnest money into escrow. Of course, if we didn't have all those inexperienced agents screwing up so many short sales, buyers would have more confidence in closing.

Posted by Elizabeth Weintraub Sacramento Realtor Top 1%, Put 40 years of experience to work for you (RE/MAX Gold) almost 9 years ago

Linda you are missing the point. If you don't tell a seller that there are tax ramifications and point out that they will be liable for debt release you could be up a creek! There are agents that have been asked this specific question and have been told by an agent that they are "free and clear" because their short sale was approved. What these agents don't understand is that it needs to be specifically addressed in the approval letter.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

Elizabeth it only becomes a custom if you let it happen that way - right? There are plenty of agents that try to write up offer that way. The answer is ALWAYS NO. If the buyer wants to house they will comply. If they can't commit to spending a few hundred dollars up front I don't want them to be in a contract they will more than likely try to get out of at some point. No thanks!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

While I agree with Lenn that the probability of getting sued is remote, any agent who is not skilled in short sales should refer the clients to one that is. Agents have enough liability issues without venturing into something they don't know enough about.

Posted by Craig Rutman, Raleigh, Cary, Apex area Realtor (Helping people in transition) almost 9 years ago

Bill, I love this post, glad to see you posted it here as well. I know that I have relied heavily on people like you and Broker Bryant for information, and believe me, I would have been flapping in the breeze without it.

I have also learned some valuable lessons, the buyers agents need to know what to expect, how to perform, etc. Many don't....

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 9 years ago

Bill - this is very good information, but in my area there just aren't many short sales (a good thing!) 

However, I did represent a buyer on a luxury home earlier this year that became a short sale after they reduced the price a final time.  That's when my buyers wrote the contract and it was accepted.  Suddenly, the bank is involved and it took over two months to get approval.  I know that is considered a very short time, but my buyer and I were not prepared for this to become a short sale and he was ready to move on to another home.  Luckily, it got done.

Because of the lack of short sales, I cannot get any experience handling them.   The one time I spoke to a distressed seller this year, I passed her off to another agent in my office who works in areas where they are more common. 

Sellers of possible short sales just don't understand - I hope they get the message and hire only experienced short-sale agents.

 

Posted by Margaret Goss, Chicago's North Shore & Winnetka Real Estate (Baird & Warner Real Estate) almost 9 years ago

Thanks for the information. That is certainly important knowledge that you have passed on. Accurate BPO are a big step in this process

Posted by Jeremy Gryvatz (RealWorks Residential Brokerage) almost 9 years ago

I can't say enough for your post. Same issues down here in SW Florida. And I can see NUMEROUS lawsuits coming soon. I've spoken to MANY other real estate agents who DON'T CARE at all because "The seller is already in Foreclosure" and just take the listing and have no clue. It is horrible. Sellers need to read this and understand how to choose a real estate agent; based upon experience and knowledge and not just some lame designation or blatant lies.

Posted by Susan Milner, Cape Coral Real Estate Broker, FloridaFutureAgents (Florida Future Realty, Inc.) almost 9 years ago

The potential long term liability, coupled with the protracted timeframe for actually closing a short sale is exactly why I don't do them.  I've had several opportunities to buy and sell them for clients.  In all cases I refer the client to someone else.  While I know I would do the right thing, the risk isn't worth the reward.

Posted by Bryan Robertson almost 9 years ago

Bill our area is like Elizabeth's. You would never sell a home here if you required the buyer to do a home inspection before the approval letter.  It won't happen and you'd never sell any short sales.  Only 14% of our market is distressed, so it isn't like they have lots of other choices.  It just isn't how business is done out on the West Coast and you could take a hard line stance all you want.  You'd never sell any short sales.  That is worse, in my opinion, than getting an offer and having it fall apart over the home inspection.

Posted by Melina Tomson, Principal Broker/Owner, M.S. (Tomson Burnham, llc Licensed in the State of Oregon) almost 9 years ago

Incredible post Bill.  Very thorough and detailed...much appreciated.

Posted by Anita Clark, Realtor - Homes for Sale in Warner Robins GA (ColdwellBanker SSK Realtors ~ 478.960.8055) almost 9 years ago

Fantastic post Bill!! I am in Lenn's camp about the lawsuits, I don't think many CAN happen. In our area, we have attorneys telling agents they are illegally doing short sales, trying to gather more business...that is a subject of another post!!! In Ohio, we do not have to be licensed to negotiate short sales. The attorneys here are using fear of being sued to keep agents from attempting short sales. They want agents to keep sending them clients to file bankruptcy as a protection measure.

Posted by Dawn Maloney, 330-990-4236 Hudson & Northeastern Ohio (RE/MAX Trinity Northeast Ohio Real Estate Specialist) almost 9 years ago

Bill,

Your posts always contain very useful information.  Thanks for sharing your expertise!

Posted by Eugene Adan, Carlsbad Real Estate (Adan Properties, Carlsbad, CA (760) 720-9710) almost 9 years ago

Bill,

This is a fantastic post.  You hit some really good points.  I do alot of short sales and I represent buyers most of the time.  I will tell you, I will not put my buyer into a deal where the inspections start immediately.  We start most time lines after lender acceptance (inspections, appraisals).  We do put up the deposit immediately and I do educate my buyers on the process.  I have a good success rate.

I really do not feel comfortable having a buyer pay for inspections (WDO and home) when we do not even know if the short sale is going to be approved.  This could create a bad situation between me any my buyer.  I had a closing yesterday and initially the listing agent wanted to start all contingencies at contract execution.  We refused and he gave in.  The good news is that it closed yesterday.

This post is 100% dead on.  The only difference is the motive of the listing agent vs. the buyer's agent.  If you are representing a buyer, you definitley do not want them to waste close to $500 inspecting a short sale that goes south; You may lose a client. 

Best,

Clayton

Posted by Clayton Bonjean, Broker | Owner | MBA (Mainsail Realty Company) almost 9 years ago

Bill, your post is so right on so many levels.  Agents that don't understand the short sale process need to be very careful about taking them on.  Here in AZ, we have a rash of agents who claim to have "100% success", or have "closed hundreds of short sales".  After doing a little research, 90% of them are simply lying, in order to get the listing.  Like Tony said, I can't wait for a few of them to get sued by disgruntled sellers.

 

Posted by Bob Hertzog, Designated Broker (Summit Home Consultants) almost 9 years ago

Bill, Great post - very good information.  

Point number three about Buyers Inspections, in California, can be deferred by use of the Short Sale Addendum(SSA), where "Time Periods shall begin the Day After Seller delivers to the Buyer written notice of Short Sale Lenders' consent."

It is an optional box that can be checked but more and more of my buyers insist on this particularly since, as you have pointed out, many agents are taking short sales on without the proper knowledge or mentor in place and it can all fall apart.  

Home and Pest inspections in my area, together, average around $750.  Throw in Engineering, Roof and Chimney inspections and you are approaching $1,300!  Quite a bit of money to spend on something that technically is not even in contract yet.

Wish I had Massachusetts pricing on inspections!

Posted by Moisés "Moe" Pagán almost 9 years ago

Bill,

I enjoyed reading your post. A client can sue for any reason, but winning is a different game altogether. Its in every agents best interest to avail themselves of an expert or education to perform their job correctly. Documentation is vital...

-Brent

Posted by Brent & Deb Wells, Prosper TX (LivingWell Properties) almost 9 years ago

Michael - What does that language have anything to do with a sellers agent letting a buyer negotiate for the seller? In Florida doesn't the listing agent have a fiduciary responsibility to the seller?

If so then you will have a hard time convincing me that it can be achieved when YOU were contracted to get short sale approval and not some investor who is looking out for their best interests 1st!

There is a HUGE difference in an investor meeting the seller before an agent and contracting with the seller. Once an agent is involved you would be treading on thin ice letting an investor take over. This of course is if there is seller's agency.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

I don't think many of the short sellers will have the money to bring their cases to court.  If lawyers would take these on a contingency basis, the flood gates would open!

Posted by Justin Dibbs, REALTOR® - Ashburn Virginia Homes for Sale (Pearson Smith Realty) almost 9 years ago

Hi Bill,  Another great review of the short sale transaction and why too many agents are walking a very thin line in trying to represent distressed sellers.   Should be required reading for new and old agents !

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) almost 9 years ago

Bill, thank you for taking the time to post.  I do not do short sales, I refer them to professionals like yourself.  No question in my mind some agents will be sued when the dust settles.  And from what I see, some deserve to be sued and suspended.

To clarify our situation in Florida, we do not have a fiduciary relationship with our clients.  Florida prohibits dual representation and therefore most (as in 99%) are Transaction Broker (meaning we represent the contract/transaction) pretty much like the title company that does not represent the buyer or seller at closing.  I will leave it to your immagination to picture the Monster we deal with in other agents who think it means you owe your client nothing. 

You have given excellent advice here.

Posted by Ellie Penaranda, Naples Florida Real Estate - Waterfront & Beach Co (239.776.5077 Downing-Frye Realty ) almost 9 years ago

Amen!  I am so glad you wrote this post - I agree with you 100%.  I do handle short sales and have spent a great deal of time and money over the past 4 years learning the right way to handle them.  You hit the nail on the head when you said "Realtors® that do not have short sale expertise could really do themselves a favor by referring the business out to an agent that is qualified to get the job done".

Posted by Terry McCarley, REALTOR, SRES, CDPE - Cape Coral, FL (REMAX Realty Team - Cape Coral FL) almost 9 years ago

Great information Bill.  It's scary to think that with so much going on with Short Sales, there are agents that don't know where to start and where to begin :). That's exactly their approach..."oh it's the same as other listings." Big Mistake...Huge!

Posted by MeLisa Minter, Realtor, Bay Area Houston Real Estate Agent (Minter Real Estate Services) almost 9 years ago

GOOD POST. SOUNDS LIKE YOU HAVE SEEN IT ALL AND DO A GREAT JOB OF EXPLAINING SOME ISSUES. SHORT SALES ARE AN EXPERTISE ACQUIRED BY A FEW REALTORS.

Posted by Michael Emerson (Keller Williams Realty) almost 9 years ago

Good Morning Bill, This is so well done and written so clearly that anyone with any brain cells to spare could and should benefit from your sage advise. This Gold Star is highly deserved. 

Posted by William Johnson, Retired Real Estate Professional (Retired) almost 9 years ago

Very educational stuff, and required reading for agents and consumers alike. I believe that litigation will be a sub industry in the nest few years the way that asbestos and lead paint are now. 

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) almost 9 years ago

I have a disclaimer in place to address future repercussions....It even includes a attroneys clause if you come after me and dont win either....There will be a post Short Sale era "wake-up" call for quite a few especially in this litigious society that we live in.

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) almost 9 years ago

Bill - an excellent read, as always.

I had not seen this but talked to Pamela St. Peter and she highly recomended it. It WAS worthwhile. There are a ton of folks who ought to read and take this to heart. Certainly there are many who are working on short sales who need more education, and help from others who DO know what to do.

I was going to suggest it, but rightfully someone beat me to it.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) almost 9 years ago

Bill - terrific and great detail. I sometimes wonder why anyone would get into the short sale business with all the sharks in the water. But, unfortunately, the expertise and assistance is needed.

Posted by Mike Saunders (Lanier Partners) almost 9 years ago

Thanks everyone for all your comments and compliments on the short sale article

Michael- very interesting! Before today I did not realize that FL did not have sellers agency!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

Hey Bill,

Great post and awesome advice! Congratulations on your success ratio with these very difficult transactions!

Gina

Posted by Momentum Realty, Orange County CA Real Estate Agent (North Orange County CA Real Estate Specialists) almost 9 years ago

Bill, Short Sales are difficult enough for those who are experienced at doing them, but it can be come a real circus act when a Realtor is flying by the seat of their pants in trying do one of these transactions.

Well deserved feature :)

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 9 years ago

Bill, really good post, thanks for sharing

Posted by Carla Dimond, (Silicon Valley) (CATARRA) almost 9 years ago

It amazes me also. An agent has no clue on how to do a short sale takes it rather than refering it out to a qualified agent. And we wonder why there are so many horror stories from short sales! The funnier part is the unqualified agent thinks all they have to do is run around the office asking everyones opinion on what to do.

Posted by Sherry Chastain, Realtor, Selling Homes, Lake Properties,Luxury Homes,Short Sales (Hendersonville, Nashville, Old Hickory, Lebanon Tennessee) almost 9 years ago

Bill - You've definitely engaged a great debate and it's great reading all of the comments from others from around the country regarding this topic.  I thoroughly enjoyed this post and the many others you've written regarding shorts sales. 

Posted by Julie Dumaine-Russell (RE/MAX Alliance) almost 9 years ago

Bill

Great blog here!  I have seen alot of your posts and I think this is up there with the best of them! As you know we do alot of Short Sales and I feel the same way as you on alot of the things that you pointed out. I love your point about the need to do the inspection before submitting to the bank. We have done that since day one! But some agents just don't seem to understand how important that is.

Anthony Lamacchia Broker/Owner

McGeough Lamacchia Realty Inc.

Posted by Anthony Lamacchia (Lamacchia Realty, Inc. ) almost 9 years ago

I agree with your detailed post on the topic.

Posted by Bernadine Hunter, SFR, ACRE, "Finding Solution to Your Real Estate Needs" (Keller Williams Greater Columbus Realty) almost 9 years ago

Great post!

Those agents who have no clue what they are doing in regards to a short sale should not hesitate for a second to refer the business to an experienced agent who does. 

What the unknowing/unexperienced agent is risking for their client and themselves is, on so many levels, insane and just bad business.

Thanks for shining a very important light on the situation!

 

Posted by Edith Schreiber, Dallas Area Real Estate (Luxury Homes, Move Up Buyers, 1st Time Homebuyers, New Construction) almost 9 years ago

Bill

Great points throughout the blog, two of which I chose to comment on based on my experience. Working with Realtors all over the country, negotiating & settling more than 800 short sales over the last 6 years I wanted to touch on these issues:

Pricing - One of the biggest mistakes I see from Realtors all the time. Not only do they start their pricing too high but I see no other research going into the decision making process. You have to act like a chess champion and think 5 moves ahead. You have to know your lenders - Wells Fargo for instance can get a short sale completed within 30-45 days if they hold the note or have delegation rights but Aurora could take up to 6 months not to mention the hell we call SunTrust. If you understand who your backing investor is and know your short sale could take longer than normal then your pricing has to reflect not only a current snap shot of price but an idea of what the FUTURE price may be 6 months from now...difficult I know but has to be considered. So when pricing, aim to the low side of your comparables and of course add in your repairs, etc to get a baseline listing price. You should get a quick offer, especially if you are 10% or so lower than the rest of the comparable homes in similar condition. If your short sale has been submitted correctly with evidence supporting your offer ( you can't just send in a contract without related justification to a lender for that contract price, another big mistake) then you should at least get a BPO ordered. 

Once your BPO is finished at the very least you know what the lender is thinking and whether or not you have a shot at a successful short sale. If their numbers come back too high, present your case again or if you have time use your listing history to show them the price they want is too high based on reality. 

We just did this with a homeowner -Flagstar as the lender - comps were all over the place with a foreclosure at $115K (sold) and active listings up to $175K for the same type property, 3/2.5. We submitted a contract at $102,500, BPO was ordered, and lender countered at $105,000.00. Ahhh, yeah we can make that work. Settlement set up for 12-17-10.

Yes short sales are a lot of work and are not for the "throw in a contract and see if it sticks" mentality. If you can't commit to the work involved and work out a clear pricing strategy (again touching on just 1 point Bill made) you're in for a world of frustration and the ultimate statement... "these short sales never work...".

 

Posted by Ed Petrie, MBA - 800 Short Sale Approvals+ (IPS, Short Sale Negotiator, Myrtle Beach, SC -) almost 9 years ago

There are a lot of "if's, and's and but's" in this short selling program. Opinions vary on whether a Realtor can or should participate in a short sale negotiation.

While the chances of being sued are remote it is still in everyone's best interest to be sure that sellers understand that legal advice is recommended. But since this advice costs money that the sellers probably do not have, Realtors must have an understanding of the process and know when to bring in outside help.

It is not that much different than any other aspect of a Realtor's work. If you don't know what you are doing, bring in someone who does.

Posted by Thomas McCombs (Century 21 HomeStar) almost 9 years ago

Hi Bill,

This very thought has crossed my mind many times, but like Lenn, I think many agents could be sued whether it was a short sale or not.  If an agent lies about their experience level, then it is really a case of fraud.  So many sellers go with a neighbor or relative who is a brand new or part-time agent with little experience, and some sellers do okay and some get burned.  If the agent is honest about their experience level and works in good faith, then it is not something that the agent should get sued over.  But agents should refer the work out if they don't think they can get the job done.

~Lisa

Posted by The Scott Loper Team Bux-Mont Premier Properties (Keller Williams Real Estate - Montgomeryville) almost 9 years ago

Bill: This is a post for all realtors and sellers to take a look at. I have found that many times the agent who is showing the home also needs to be informed too.

The agent would come back and say so how many offers are you presenting to the BANK and the MILLION DOLLAR QUESTION they all ask is how long will it take for the bank to approve the Short Sale?....

Posted by Donna Paul, Long Island Home Specialist,All About Real Estate (Keller Williams Realty Gold Coast) almost 9 years ago

Bill - Congratulations on your in-depth article about Realtors and short sales.  Best advice - refer out your short sale listings if you don't know what you are doing!

Posted by Wendy Rulnick, "It's Wendy... It's Sold!" (Rulnick Realty, Inc.) almost 9 years ago

I share your sentiments - I've seen (and experienced first hand) listing agents who claim to be short sale experts, yet due to their incompetence, they put their clients in a worse situation.  I know that with short sales, anything can happen.  But when the Realtor makes the situation WORSE, there is no excuse for that.

And I shouldn't forget the buyer's agents whose clients are buying a short sale!  They don't realize how important it is to HONOR the time constraints as agreed upon in the contracts that their clients signed.  So please don't tell me you can close an FHA loan in 30 days, only to tell me a week before COE that you need another 30...  In doing that, you are compromising the transaction and potentially setting up the seller for foreclosure.

Posted by Tiffany Wilson, SFR, First Time Home Buyers & Investors (eReal Estate Corp) almost 9 years ago

Great article, but I do feel that you fall short in one area...leaving the short sales to the short sales experts. You have self anointed yourself as an expert, but didn't you have to have a first short sale? One can educate themselves through mentors or training on the ins and outs of the short sale process without having to give a deal away to an "expert". By taking the time to educate oneself on the process and perhaps obtain education regarding short sales, one can easily avoid any ethics violation and produce a satisfactory result for a client.

Posted by Gavin Christie almost 9 years ago

Pleople always want to point out that agents have to get short sale experience starting with their first short sale. That's fine, just say so. When I did my first short sale (in 2002) I told people - this is my first short sale, help me out. I won't be offended. I told title, lien holders, buyer agent, and most importantly - seller. Luckily for me, the seller had worked for their lien holder so knew a lot of inside information that did help a lot.

Posted by Joetta Fort, Independent Broker, Homes Denver to Boulder (The DiGiorgio Group) almost 9 years ago

Ed - You are right on the money. The short sale should priced just a tad below market most of the time depending on how far the market is sliding.

Gavin - Where in my article do I say I am a "short sale expert". I am learning all the time from my experiences closing short sales. I refrain from using that statement.

Almost every short sale is different. I agree with your assessment of mentoring. If you look above in the comments someone asked me this exact question about how an agent can do them when you have to start sometime.  There is a HUGE difference between understanding them 1st before just taking a listing because it is a money making opportunity.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago
Good post. As a CDPE, inexperienced agents taking these listings drives me crazy. The end result is terribly damage credit because the agent can't get it closed and the house forecloses... Major disservice to the client! I am also one to "vet" the buyers. If they aren't serious enough to stick it out and pay close to where it's correctly priced, they need to move on.
Posted by Julie Baldino, Opening Doors to New Chapters... (Front Door Realty) almost 9 years ago

Bill - I do refer short sales out to agents with that experience.  If I ever decide to go into short sales, I'd hire an experienced short-sales expert to mentor me for the first few transactions.  As you say, most people in that situation are desperate and can't afford a mistake on the part of the agent. 

Posted by Gail Robinson, CRS, GRI, e-PRO Fairfield County, CT (William Raveis Real Estate) almost 9 years ago

Hi Bill!  Awesome post and well-covered details that all short sellers should be aware of--as well as agents!  It amazes me the number of agents 'trying' to do these things, flying by the seat of their pants, when there is so much available education for them out there pertaining to the short sale process.

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods (www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) almost 9 years ago

My realtor havn't had any issues yet and I hope that they don't have any issues..

Posted by Thomas Minetti (Handyman Services) almost 9 years ago

You are correct when you say that there are agents out there who don't have expertise in this area.  Many a seller has been ill-served by a confused agent.

However,  laws regarding short sale"negotiation" specifies that a buyer may negotiate his or her own sale, and this is what many investors do.  Please do not attempt to stimatize this practice.  It has resulted in successful short sale closings for thousands of sellers.  There is nothing wrong with an investor working with the lender to get a favorable price, as long as this is disclosed to the seller and the seller has agreed to it.

As my grandmother used to say, "there is more than one way to skin a cat!"  Investors play an important role in handling these short sale properties.  An experienced investor who is backed by ongoing training and legal expertise CAN be a seller's and a real estate agent's ally in a short sale.   Remember, the best offer is the one that closes.

Posted by Anne Richards (Short Sale Buyers and Negotiators) almost 9 years ago

The goal is to close a SS transaction regardless of price and without any deficiencies to the seller. Using all available qualified resources regardless of who or where they come from to close the transaction should be used fearlessly. A complete SS package must be presented to the lender to illustrate and validate the offer and determine the strike price.

The knowledgeable SS RE agent selects what opportunities to pursue based upon the circumstances of the seller and the type of mortgage on the property. Being selective is essential to being successful in closing SS transactions.

Legislation in the US Congress is being introduced to require lenders to approve or reject SS offers within 45 days from submission. This would speed up the negotiating process and eliminate lenders inefficiency in their SS activities.

Finally, using the term expert in SS isn't and shouldn't be used without qualification. States have different laws, so while you can be an expert in your state, you may not be in other states, so these designations are useless to use generally, don't you agree?

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) almost 9 years ago

Bill, like Lenn, I don't think you'll see any more lawsuits against agents doing short sales than you do now, for the reasons already given.  That said, it would be nice for agents listings short sales to have some idea of how to do them.

You specifically mention that the agent shouldn't be practicing law, but the basis for the post is that the agent is likely to get sued for not disclosing the possible tax consequences of a short sale as well as the further legal consequences (debt relief or not).  Likewise, we cannot act as an accountant, either.  So other than advising them of the 'possible' tax consequences and advising them to speak to a qualified accountant, you can't do much more than that.

What lawsuits should happen?  What about short sales were you had an offer (or offers) that the lender wouldn't accept.  The property finally forecloses and the bank sells for substantially less than the highest offer they turned down on the short sale, yet they go after the seller for the difference between their sale price and the debt owed.  I think that is a good potential case for a lawsuit, don't you?

Posted by Roger Johnson, Realtor - Hickory NC Real Estate (Hickory Real Estate Group) almost 9 years ago

Good article, Bill.  When Short Sales started coming in to our market and I was approached by sellers to list their properties as a Short Sale, I would refer them out as I did not have the expertise at that time to represent them properly,  I have since been SFR certified and handle quite a few Short Sale listings.  It never ceases to amaze me the listing agents that take on these listings that have no knowledge of the process required for a successful outcome.  Thank you for the detailed post!

Posted by Rebecca "Becky" Joens, Broker- Associate, SFR, RE Instructor (ASHTON REALTY GROUP) almost 9 years ago

Very true, Bill. I think that agents who take a course and then advertise themselves as a short sale specialist or a short sale expert are taking on additional responsibility and more potential liability.

Posted by Sharon Simms, St. Petersburg FL - CRS CIPS CLHMS RSPS (Coastal Properties Group International - Christie's International) almost 9 years ago

Perhpas, realtors should not be negotiating short sales!  Our law firm works with many realtors in the southwester paortion of Florida and we negotiate the short sale while the realtor involved does what a realtor does best, market the property and find a buyer.  It has worked out very well.  Not that we have a 100% success rate, that is impossible; however, the balance works out very well.  I am not doing the realtor's job, and the realtor is not doing my job as the lawyer.  I do not understand why realtors are negotiating these matters since it is clearly not something a realtor should be doing without the benefit of a real estate attorney.  The best way to limit your liability is to make sure you know exactly what you are doing.  So, use a real estate lawyer, a tax accountant and if necessary a bankruptcy attorney so that everybody is fully informed as to how  to best serve the client.  Thanks,   Paul  Blucher

Posted by Paul Blucher - Blucher Law Group, LLC almost 9 years ago

Bill, very good post.  Turning over a short sale to a LLC who is both the buyer and negotiator is professional suicide for an agent.  In California laws have changed and it is no longer legal to charge negotiator fees to either buyer or seller in a short sale.

I disagree somewhat of your opinion that an agent who has no experience should not take the listing but refer it out.  As long as the agent is diligent, has had some training, and broker/office support (very important), they can be successful.  An agent has to start somewhere.  Having said that, the agent who takes the listing and hasn't the intent or time to get involved with the short sale process, then I agree they should refer it out.

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) almost 9 years ago

Bill,

In my state (Maryland), the Buyers receive Condominium Documents from the Sellers AFTER there is a contract.  The Sellers PAY( $0 to $350) for these documents to be prepared.  The Buyers have 7 days to read and recind the contract (if they choose) after receiving the documents.

How/when would you suggest this be handled in a Short Sale...After 3rd party approval or before?

Posted by Kathy Opatka, Serving Ocean City, MD, & The Delaware Beaches (RE/MAX CROSSROADS) almost 9 years ago

Thanks, Bill.  I completely agree with you on the pricing comments!  Well said!  I enjoyed reading all the comments - really emphasizes exactly that EVERY SHORT SALE is unique in some way.  I am also a CPA, and have especially enjoyed doing short sales, and am continuing to learn more and more as this regulatory environment keeps changing.

Posted by Teresa Cooper, SC Lowcountry - Charleston, Dorchester, Berkeley (Home Solution Real Estate Services) almost 9 years ago

Bill,

Excellent post. I agree there are some real landmines and there will be lawsuits, how many is the question and I do not have the answer. To your point, we always make sure to get the seller hooked up with an experienced short sale attorney before signing a listing agreement and we have them sign a release that says we discussed defficiency and that they will get legal and tax advice. Our MLS shows almost a decade worth of short sale inventory as compared to about 3 months of REO inventory currently active and last I checked over 80% of the short sales coming off unsold. As a group, our local agents have a lot of room for improvement, however, we do have a solid core of agents getting it done, sharing what works and what to avoid, and it's a pleasure to be part of that group. I too am constantly learning and this is a constantly evolving situation.

CT has a law that an agent cannot be compensated as the negotiator, but they have not gone so far as to say we cannot negotiate for our client's best interests with the bank as part of our commissioned work. That said, an experienced short sale attorney is invaluable in the negotiation phase.

Posts like yours are important to help let sellers know what they need to know to make sure their agent knows, and to let agents who aren't sure know that it's OK to get help or refer a short sale listing to someone who has more experience.

 

Posted by John Queenan (CDPE, Nicholas H. Fingelly Real Estate) almost 9 years ago

Thanks Bill!

I have taken the initiative to get certified as a Short Sale & Foreclosure specialists and I also feel that many other Realtors need the invest time to get educated in this field. Sellers are turning to a professional for help and expect for us to know the best options for them.

Great post!

 

Allegra House, Realtor

RE/MAX Quality Homes

 

Posted by Allegra House almost 9 years ago

Hi Bill: This is a very timely post and should be read by distressed home sellers.  There are so many shortsale certification courses, books, online webinar by CAR, CRS, etc that can help bring a lot of novice Seller Agents up to speed.

Posted by Bandele Oguntomilade, Top REALTOR, Your Woodland Hills Real Estate Agent 818-825-6996 (Bogun Realty and Luxury Homes) almost 9 years ago

Great post Bill!

It's unfortunate that some of the home sellers out there aren't researching who they are working with more closely. I agree that many lawsuits will come to agents without the proper short sale training.

Great Advice!

Posted by Jeff & Koreen Firnstahl (Team Firnstahl - Keller Williams Classic Realty) almost 9 years ago

Bill - Great advice to follow to work through a short sale.

Being in Real Estate and starting my second year I have taken what I think is the best training to position myself to help a person work through their options regarding their home.  I completed the CDPE training and continue as an Advanced member of their Institute.  Their forum and up to date information keeps me on top of what is going on not only regarding a transaction but the legal, legislative and market information.  I back that information up with Realtytrac.

I guess I am at the other end of the spectrum being tired of experienced Realtors thinking new ones are going to be failures.  Could be do to attrition.  Could be do to not feeling welcome.  For everyone on AR and others, there was a "first successful time".

 

Posted by Robert Courtney, Century 21 All Islands, RA, CDPE, MCRE, CIAS almost 9 years ago

Roger - Not at all. Remember a borrower signs a contract with a lender ( note and mortgage ) to pay back a loan. The borrower is defaulting on their obligation. The lender is certainly under no obligation to do a short sale EVER. It is completely at their discretion. A lender doing a short sale is doing the borrower a favor.

Paul - I agree with you completely which is one of the reasons why I have an attorney doing their part leaving me up to "selling".

Pamela - I agree with you and actually said the same thing when someone asked above in comment #17. The problem however is that in most cases that is not happening. Too many agents just think about $$ and not the client facing foreclosure.

kathy - If I were the listing agent it would be before. When a short sale approval comes the lender more often than not will ask for a 30 day close. You can't have a buyer looking over condo docs at that point and risk that they don't like something in them. $350 is not a lot to invest when you are buying something that is more than likely a decent deal.

Bob - I agree people need to start somewhere. I don't however condone the " I will learn this as I go attitude". I studied everything I could about short sales before I listed my 1st one 4 years ago.

Everyone else thanks for all your comments!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

As real estate is very local, real estate laws and contracts vary form state to state.  Not all of you points apply in California, but nevertheless this was a good read.  Agents should educate themselves before attempting ANY type of transaction.

Posted by Simon Mills (Mills Realty) almost 9 years ago

You speak a lot of truth in there.  Although I think I have been doing things right I am certainly reluctant to reblog anything that puts Suit and Realtor in the same sentence.  I hate to give them ideas! :)

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) almost 9 years ago

In California and in many other states, a buyer who is an investor is NOT prohibited from "negotiating" the short sale as long as the seller agrees to this.  The reason I put quotation marks around "negotiating," is that we all know that much of what transpires between the loss mitigator/negotiator and the person discussing the short sale (whether agent, investor, or professional negotiator) does not really qualify as "negotiation." because rarely is there give and take in the conversation.

I have worked with many agents who were quite happy and relieved that I was doing the "negotiation."  I got a good outcome for myself and for the seller, and the agent was paid a commission without having to spend countless hours playing phone tag with lenders, repeated re-faxing short sale packages, and dealing with all of the other time consuming foolishness that occurs when dealing with a lender on a short sale.

Those of you who believe that investors do not have ethics or ability to handle these transactions are simply misinformed.

Posted by Anne Richards (Short Sale Buyers and Negotiators) almost 9 years ago

I am in Florida where 50% of sales are short sales and 75% of agents do not understand them.  In fact many agents that list short sales do not know the difference between a short sale and a foreclosure.

When people are facing foreclosure it is imperative that the agent be a short sale pro...unlike a seller that just wants to move for other reasons.  That is not the time to "practice" short sales.

I always ask agent a lot of questions to determine if my buyer client should even bother waiting for a short sale that does not have a chance because the agent does not know how to put a package together.

 I think that any agent that wants to list a short sale should be required to take a mandatory short sale class with a test and buyers that are serious about a short sale need to put down a deposit and have a set waiting time.  This will add professionalism to the short sales.

Eve in Orlando

Posted by Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) almost 9 years ago

Very thorough post with many good points of interest that show you know your stuff. The question isn't if some agents will be sued but how many?

Posted by Victor Zuniga (Berkshire Hathaway Home Services California Properties) almost 9 years ago

Great post Bill. I have to agree with Elizabeth #23. There are still many inexperienced short sale listing agents. It is hard enough to get the buyer to wait patiently for a chance the short sale will be approved. If a listing agent "required" the inspection be conducted prior to approval....good luck with getting a sale (in my area any way)! It has been my experience after the short sale has been approved once, within a month it can be approved again. But that first approval could take 4-6 months. A lot can happen to a house with insolvent owners. Better to conduct the inspection within a month of closing.

Posted by Karen Burns almost 9 years ago

Eve - Qualifying the short sale agent is extremely important - no doubt!

 

Karen - I would have to disagree with you on the home inspection issue. Frankly, I think it is crazy that it has become the norm to do it after approval out in CA. I can guarantee you that the success rate for short sales will automatically go down because of the way things are being done. We both know that many transactions do not take place because of inspection items.

From a buyers perspective it also seems crazy that you would wait for 4-6 months on the side lines and then find out you don't want to buy the home???

As I mentioned out here there is NO CHANCE you will buy a short sale that I am listing unless you follow the rules of buying just like any other home. Treating a short sale like a standard transaction increases the odds that the short sale will be approved and close.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

I guess the good news is some of my competitors may be going out of business (LOL).

Posted by Jim Paulson, Owner,Broker (Progressive Realty (Boise Idaho) www.Progressive-Realty.info) almost 9 years ago

Very well written and good advice on how to and why to get an inspection done prior to approval.

Posted by Steve Capen (Keller Williams Realty) almost 9 years ago

Short sales are alot of work and take expert knowledge.  Do Not trust an agent who Say's they are a short sale expert!!  Ask for names and numbers of satisfied clients.  It takes alot of knowledge to wade through and it one does not know how to do it, it is not fair to the seller to put their future at risk.  Take classes, go to seminars, make sure you know what to do.  Once you get the "hang" of it, it is a matter of calling and faxing and e-mailing....but it can be done.  Also, price it right, I always price the median value not high or ridiculously low, which I have seen done and that is not fair to anyone.

Posted by Leslie DeLuca, No One Knows The Monterey Peninsula Like DeLuca (DeLuca Real Estate ) almost 9 years ago

Great blog!!!  You included enough good advice to allow even an "average" agent to complete a short sale successfully.  It isn't really that hard if the Lender Wants to Short Sell...if not...there IS no possibility.

One ought to find out the desires of the lender up front.

Posted by Tom Waite, So Cal-Apartment Bldg Investments (Thomas Waite Real Estate Broker) almost 9 years ago

Bill, a great blog that deserved the feature.....you are indeed the KING of Short Sales.

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty) almost 9 years ago

Great job Bill!

I can tell you really know your stuff.

David Snell

www.snellexperts.com

P.S. We want to hear more.

 

Posted by David Snell 704.905.9152, Inspector (Executive Restoration LLC) almost 9 years ago

Another excellent blog Bill!!!  We can see why your the expert in your area  :)

Posted by Christine McDaniel, Broker Associate (Coldwell Banker Residential Brokerage Porter Co.) almost 9 years ago

Bill, that was an outstanding post. I have written several blogs on this topic and I have indicated that L.A. and Orange counties in California haev in excess of FOUR THOUSAND lawsuits against agents and brokers on failed shrt sales. It has gotten so bad that there was pending federal legislation to prohibit anyone wiht a vested interesti int eh property...including the home owner and listing agent and buyer agent, from negotiating the short sale.

I have also mentioned MANY times on hear that many current E&O policies will not provide coverage for this loss and certainly even fewer will in the future.

Everyone must pay attention to California as it is a "bellwether" state and other states will soon have this problem. There have been rumblings within ATLA that you are about to see "1-800" infomercials advertising..."Did you lose your home in a foreclosure sale. Did you have a real estate agent negotiate your short sale? You may have legal rights"

 

I have great disdain for this behavior, but I believe that it is coming soon...

 

Paddy Deighan, Esq

Posted by Paddy Deighan JD PhD, Paddy Deighan J.D. Ph.D (TimeshareLawyers.pro) almost 9 years ago

Paddy - I have no doubt at all there will be lawsuits. If you look through the comments you will see a number of agents don't think it will happen based strickly of the clients ability to pay an attorney. They will be in for a rude awakening.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

I appreciate the information you've provided.

This little nugget is interesting though: "It pisses me off when I see a new short sale listing hit the market and know the agent has no track record with this type of transaction."

And how, pray-tell, did your first short-sale four years ago, come about? 

Posted by Karl Hess, on The Jersey Shore (Keller Williams Shore Properties) almost 9 years ago

To all those agents who disagree that all inspections should be done up front, I have to point out a couple of things.

1.  Buyer's remorse is a very real disease.  No agent that I know of, gets paid if the deal falls through.

2.  Lenders are more likely to accept a "lowball" offer on a short sale up front, if you can document that the house needs a lot of work (backup would include the inspection reports, plus estimates for repairs).  Once they have approved a deal, they are not going to reduce the price significantly because of an inspection report.  If your buyer really wants the house, then a relatively small investment up front is well worth the knowledge that you are either getting a house in good condition or, you have the opportunity to negotiate the price at a time when it can mean something.

3. Getting the inspection done up front means that the condition of the property is documented.  When the walkthrough takes place (months later), you have something to point to, showing that there are more than "wear and tear" defects that must be remedied.

When it comes to buyers negotiating the short sale, I can only say three words:  CONFLICT OF INTEREST.  IMO, any seller that lets the buyer negotiate the short sale is certifiable.

Posted by Peter Pike, Board Certified Real Estate Attorney in Florida (Myron E. Siegel, P.A.) almost 9 years ago

Karl - I should have preficed what I wrote by saying that before I ever listed my 1st short sale I studied everything about them for months! The problem I have is agents who take them and try to learn on the fly with no thought put towards the clients well being and the eventual result.

From day one I used an attorney so my job was to sell the home. When I was still green the attorney was a great asset.

It is obvious just by asking a couple of simple questions to some of these agents that they don't even know the basics of what it takes to follow simple procedures.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

Peter - Outstanding points. I don't see how this trend ever started in CA. You would think the big short sale agents out there would take the bull by the horns and stop the trend. If you are representing the seller it makes perfect sense. Even if you are a buyer's agent why would you have a buyer out of the market for month only to find out they don't really want the home?

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

Hi Bill, I'm so glad you wrote this post...that's a true gold mine of expertise shining through the lines!

 This ilustrates our responsabilities as Agents towards our clients, and our Associates. To be on top and nurture a high morale, reflected in training, personal and technological,  (RE/MAX are pioneers! [I am a proud ex RE/MAX  trooper]),  thus lifting optimism, creativity, and taking out the stressors - the goal to abundance and success. Thank You  for sharing, will print out, so that I know where to start when one day in America... P.S. please send us more. Peter 'down under'

Posted by Peter Michelbach almost 9 years ago

Great information -Short sale agents have to start somewhere, so for those who want to get into this niche, your instructions here will be invaluable.

I can't believe agents are submitting unsigned offers. What is that? Nothing but a statement that "I might want to do this."

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) almost 9 years ago

As an investor who negotiates my own short sale purchases, I have no buyer's remorse, because I buy AS IS.  CASH.  Closing ratio?  Well over 90%.

Posted by Anne Richards (Short Sale Buyers and Negotiators) almost 9 years ago

Hey Bill - Fabulous post. I am so glad you pointed some of those things out. I think that it's important to remember that we need to do the right thing. I just saw a situation where the agent who listed the shortsale bought the home on short sale after the expiration of the listing. What do you think about that? It made me uneasy to see that....

Posted by Sandy McAlpine, Search Lake Norman Homes For Sale - Lake Norman NC (RE/MAX EXECUTIVE) almost 9 years ago

Great post, full of great information.  I agree that if an agent is not experienced in these transactions, they need to recruit the help of someone who is.  Should I ever get another short sale listing, my first call will be to Melissa Zavalla, one of our ActiveRainers here, whose company--Short Sale Expeditors does the negotiating for us.  It will be well worth the money to have it taken out of my hands and into the hands of a professional.

Posted by Jean Hanley, Specializing in Folks Who Want To Buy/Sell Homes (Coldwell Banker Kivett Teeters) almost 9 years ago

Hey Bill - Short sales revolve around price. But the dance begins from there. Excellent post. Points well absorbed

Posted by Claude Cross, Charlotte NC Homes For Sale (Homes By Cross, Inc. ) almost 9 years ago

Great advise, Bill.  It's no wonder you have been so successful with closing them. When I have buyers intested in a short sale, the first thing I look at is who the agent is.  I make a point of calling them to pick their brain and see what they really know.

Posted by DeeDee Riley, Realtor - El Dorado Hills & the Surrounding Areas (Lyon Real Estate - El Dorado Hills CA) almost 9 years ago

Thanks again everyone for all your comments on my short sale article.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

Great post Bill.  You are right, errors made by agents that do not understand short sales is a big reason why so many buyers want nothing to do with them.   Sometimes the bank holds things up but incompetent agents make everything worse.  #3 regarding inspecting the property first has it's positives and negatives.  Sometimes the bank has a specific dollar amount they need to net and they stick to it no matter what.  Every short sale is different and has it's unique challenges.  You are right about law suits down the road.

Posted by Patricia Beck, Colorado Springs Realty (RE/MAX Properties, Inc., GRI, CDPE) almost 9 years ago

I don't understand why more agents don't ask the bank: what was the bpo? what do you need to net?  Most of the time when I ask these questions, I do receive answers.  Granted, some of the answers may be lies, but most of the time these questions help to get the deal done.  You can say "if I know what you need to net, then I can probably get you that."  It's a game changer.

Posted by Anne Richards (Short Sale Buyers and Negotiators) almost 9 years ago

What an excellent educational post, so much information and so precisely given.  I'm glad you talked about preparing to do your first Short Sale because that is where I am.  Everyone has to have their first.  I have completed the CDRS and SFR and read as many articles as possible.  I know that each transaction will be demanding and different but I am ready.  We can help homeowners one Short Sale at a time.  Margaret C.

Posted by Margaret C. Taylor, St Marys/Calvert/Charles MD Real Estate Agent (Century 21 New Millennium MD) almost 9 years ago

Bill- great post, but as a buyer's agent I disagree with what you said about the inspection contingency period.  My buyer's wait until we have approval to do the inspections.  Firsly, as you correctly said, they could spend $400-$500, and not even have the offer accepted by the bank.  However, if the bank takes a long time to respond, (which they often do) the property could further deteriorate, especially if it is vacant.  However, as a listing agent, I can see how you would want the inspections done earlier.  Another way to deal with this is to tighten up the inspection contingency to 7 days.

Posted by Carol Lee, Realtor - Agoura, Oak Park, Westlake CA Homes (Dilbeck Real Estate) almost 9 years ago

Carol I would be willing to be if there was a study done you would find more short sales fall apart in your area than the rest of the country because of the tradition that was started where you wait until after short sale approval to do a home inspection.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

Bill, well written post, I have not been involved in any short sales, I avoid them but you're right they are a mine field. We have a number of agents who have never handled any Real Estate transaction, yet have a certification in short sales!!!!!

Posted by David O'Doherty, Clayton NC Homes, Raleigh, NC (Raleigh Realty Inc) almost 9 years ago

Good stuff. Short sales are not for the faint of heart or inexperienced agent.

Posted by Wayne B. Pruner, Tigard Oregon Homes for Sale, Realtor, GRI (Oregon First) almost 9 years ago

Thank you for the detailed post.  There are far too many agents that don't know the ins and outs of short sales and their role and the implications of that role.  Thanks for the good read.  I look forward to more.

Posted by Kimberly A Norgard (Devlin McNiff Halstead Real Estate) almost 9 years ago

No untrained agent should attempt a short sale. The education is inexpensive for what you get.

Posted by Dennis & Terri Neal, Your Home Sold in 45 Days or We Se (RE/MAX, Big Bear) almost 9 years ago

Bill, this is such an important post. I hope you have syndicated it on other forums.

Even if agents are trained, it takes a certain personality to effect some short sales. I have told agents in the office what to do when when they got a 'no' and they just walked down the hall and didn't do it. And their deal fell apart. And they were whining. And I asked them if they did what I told them to do. Deer in the headlights look.

Agents are trying to survive by taking on what their temperament and/or inexperience does not suit them to do. They should refer short sales out and take on what they are qualified to do. Yes, there are going to be law suits.

Posted by Sharon Alters, Realtor - Homes for Sale Fleming Island FL (Coldwell Banker Vanguard Realty - 904-673-2308) almost 9 years ago

Great information! Thanks for sharing. I am still so new to this business and I can honestly tell you that Short Sales do terrify me. I am grateful that my brokerage provides me with a mentor and a trainer that I can reach out too and ask questions!!!

Posted by Beyonca Clark (Century21 New Millennium) almost 9 years ago

Great post and well thought out.  I believe that there will be lawsuits because it will be another area for the legal field to make a hay day of something that even they have contributed to themselves..

Another area where I see that most real estate agents do not understand is they are selling their own home as a short sale and that is a "no-no" along with selling a family members home.  I am seeing these types of short sales heading south because there is way too much involved emotionally and one can loose objective.

Much success to you in 2011.

 

Posted by Barb Van Stensel almost 9 years ago

Anyone who participates in a short sales must have big pockets because they are going to need them doesn't matter how careful you are the lawsuits are coming, it is the next crisis; for me it is not worth it, I want to stay for a long time. I just took the code of ethics and commissioner standards for my ce hours and took the desicion to stay away from ss.  Good luck for those Realtors who are still doing it.

Posted by Carmen Gabriel (Clients First Realty LLC) almost 9 years ago

Anyone doing short sales should insist the seller consult and attorney and a tax professional.  Before long it is inevitable the lender is going to sell the deficiency judgements to a rabid debt collector.  The harassment is going to start to the dismay of the person who thinks the short sold house is history.  They are going to sue the agent and they are going to win.

Posted by Rita Hodges, CRS, GRI - Seller & Buyer Consultant almost 9 years ago

Went on a listing appointment last week, I was the 2nd interview. The first "short sale expert" told her she would not get a 1099 on her short sale of her rental house. I suggested, insisted that she speak with her CPA or tax attorney before listing her home just to be sure.

She listed with the other agent because the other agent told her what she wanted to hear. I smell a lawsuit.

Posted by Liane Thomas -Top Listing Agent, Bringing you Home! (BROKER Allison James Estates & Homes BRE 01885684) almost 9 years ago

Liane I am sure you are right about the other Realtor giving her incorrect information.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 9 years ago

There was a professor here at the University of Arizona who was touting strategic walk aways.  Realtors must inform anyone doing a short sale they should contact an attorney or CPA to understand the tax consequences.  We have situations where someone is upside down on the first house and then purchases a second home, and walks away from the first home.  I have asked potential clients find another Realtor because I felt what they asked me to do could be construed as mortgage fraud.  Here in Arizona we have so many homes underwater, banks are fire saleing, and people who never thought they would be upside down now are.  It's a tragic situation.  Thank you for your blog post, Bill.

Posted by Terry Bishop, Earning Your Trust and Confidence... (Terry Bishop Realty LLC) over 8 years ago

Exceptionally fine and well-crafted post, Bill!

Listing agents who list the property significantly below what it has a chance of appraising for waste a lot of everyone's time.

Selling agents who present offers not remotely within a stone's throw of the probable appraisal also waste a lot of energy.

Why don't you come to the Old Dominion to do business?  We could use some competent folks around here!  (Actually there are many excellent Virginia agents.)

Posted by Jim Gilbert, The Gold Homes Team (Keller Williams Fairfax Gateway) over 8 years ago

Bill, there are several agents that deserve to be sued for causing homes to go to foreclosure because they don't know what they are doing. I think NVAR has a disclosure now requiring agents to tell seller that they don't ahve any experience with short sales. We're suppose to be helping people avoid foreclosure, but we actually have agents causing foreclosures. ( True example) A lady not far from me listed her house with an agent tha obviously didn't know what they we're doing. House wa sassessed in low 400s, but listed in low 300s ( 1rst sign), in remarks agent writes, " just make offer, seller needs contract asap" ( 2nd sign), it goes under contract in 2-3 weeks ( 3rd sign). I see this lady at 7/11, she startes telling me about they got a contract already and we're just waiting for lender approval. I asked how much, ( answer: mid 200s). I said, what, the lender will never approve that...etc. Well, next thing you know about 45-60 days later, they are rushing to move out, house went to foreclosure, then gets relisted by another agent. We've all seen it over and over. That first agent should be sued for being incompetent.  I understand exactly how you feel.

Posted by Jeff Pearl, Full Service Full Time Realtor (RE/MAX Distinctive / LIC in VA) over 8 years ago

Jeff it is a major problem and pretty disgusting that some agents have no regard for a persons financial well being. Agents that list short sales that don't know what they are doing deserve to be sued!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 8 years ago

Bill, As in all professions, Doctors, Attorneys, Financial Advisors and Real Estate Agents, You have a few that are bad. Your Article was very informative and should be required reading for all of us, Experienced or not!

Posted by Bob Publicover, Thinking outside the box (Publicover Realty Group, inc) over 8 years ago

Thanks Bill!  This was a lot of really great information...especially, for a newbie like me.  Do you have any suggestions how a newbie actually learns this process?

Posted by Mechelle Cranford, Residential Real Estate-Wilson Realty (Sell, Buy, Invest, Relocate, Distressed Properties) over 8 years ago

Hi Mechelle - I would suggest taking the short sale classes and getting certified. There is also some good reading in the links I have provided here:) Lastly I would see if you could mentor with someone you know who is successfully closing short sales.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 8 years ago

Even with all of the excellent content here, there are still people that will not be happy with the result of their short sale and will look for someone on whom to lay blame.  We find that a 'foreclosure and short sale' disclosure helps to drive it all home and if not, at least you have proof that you've informed them of possible adverse results. 

We are now formulating a 'hold harmless' addendum, too. It specifically notes that we do not provide legal or tax advice, encourages the homeowner to seek such other professional advice, and that we are not responsible for knowledge that only becomes available after closing, etc. It will be used for all transactions, but will be particularly useful with short sales.

Our short sale clients are frequently under a huge amount of stress coming from different parts of their life, and there are times that some of them will have 'selective' memory.  The better your relationship and frequency of contact are with them, the less this seems to be an issue.  I like to talk with my short sale clients at least once a week, even if there's nothing substantial to report.

Posted by Robert Smith, SRES, Search for Homes Brighton-Howell-SE Michigan (Preview Properties, PC - http://www.RealEstateMich.com) over 8 years ago

Rob you are correct that having protection in place is very important as many do have selective memory. Just as important from the consumer side of things is to make sure the interview process of a Realtor is done thoroughly.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 8 years ago

Amen, Bill.  Too many consumers wait far too long to take action. I think those are the ones that are very desperate and end up with the first Realtor they talk with - sometimes with a poor experience or qualification fit. 

Posted by Robert Smith, SRES, Search for Homes Brighton-Howell-SE Michigan (Preview Properties, PC - http://www.RealEstateMich.com) over 8 years ago

Your article clearly shows that there is a big difference between a normal sale and a short sale.  Unfortunately there are many agents out there that aren't aware of the difference.

Posted by Doug Bullwinkel, Mortgage Loan Originator NMLS #281609 (Envoy Mortgage, NMLS 6666) over 8 years ago

Most indeppth short sale post I have read. I now use an attorney to negotiate the short sales for my clients as they can advise them on the process. What do you do to find most of your short sale listings?

Posted by Tom Scott, Re/Max MN Realtors and Real Estate Agent (Remax Advantage Plus) over 8 years ago

Tom almost all of my short sale business comes from short sale articles I have written. You can see all of them at Massachusetts short sales.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 8 years ago

Very good reading.

Thanks for the post

Posted by Terry Gerling (Ultimate Realty) over 8 years ago

This is a great article about the ins and outs of Short sales. We've all learned more than we ever wanted to know about this fact of life!  Thanks very much for the great blog!

Posted by Lisa Wetzel, CDPE, SFR carsonvalleyland.com (RE/MAX Realty Affiliates) over 8 years ago

Great article.  I have been saying for years that unless properly trained, which does not mean a three hour webinar course, agents have no business doing short sales because of the liability.  Want proof, call up your E&O insurer and ask if you are covered if doing short sales.  The answer will be no. Always refer negotiations to a qualified and experienced negotiator and always have the seller seek legal cousel for further liability protection.

www.ssnegotiators.com

Posted by Joseph Alfe (Short Sale Processing Inc.) over 8 years ago

Terry, Lisa, Joseph - thanks for your compliments on my short sale article. Seller's need to understand that hiring a Realtor that has a track record of closing short sales is vital!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 8 years ago

very good points and advice.  I see botched short sales every day. LA and orange aCouinty CA have many. many lawsuits against realtors in short sale negotiations...right or wrong, it is happening and my strong belief is that most E&O policies will deny coverage.  I hear improper tax advice, forclosure advice and deficieny comments

Posted by Paddy Deighan JD PhD, Paddy Deighan J.D. Ph.D (TimeshareLawyers.pro) about 8 years ago

Thanks for the post. Short sales are a part of our market. One must really know what they are getting into when listing a short sale. Good advise.

Posted by Carol Barron Cross, Sunflower Homes & Equestrian LLC (SUNFLOWER HOMES & EQUESTRIAN LLC) about 8 years ago

I've done well in excess of a hundred short sales, and have plenty of experience, but I don't begrudge the newbie as much as you do.  There was a time when you did your 1st one, right?  And I'm sure a few mistakes were made along the way.  It's such a big segment of today's market, there's no way agents are going to continue to refer every short sale they get to the "experienced" agent in town.

Other than that, I agree with most of the rest of your post, and certainly believe agents should get adequate training before taking on such a complex transaction.  They also must be very careful what they say, and not slip into providing legal or accounting advice when it comes to the deficiency or 1099 situation.

Posted by Matt Robinson, www.professionalinvestorsguild.com (Professional Investors Guild) about 8 years ago

excellant post I don't think enough realtors realize some of the libility issues they open themselve up to just chaseing what seems sometimes to be the only opportunity for commission out there, like you said best to refer it out. Better to get a smaller percentage than make make mistakes that will come back later.

Posted by Richard D. Chapin, PLLC - Commercial Real Estate (Arizona Elite Commercial) about 8 years ago

This is an excellent post Bill. The one aspect that I would challenge is the that volume makes someone a good short-sale agent. I've been the buyer's agent on a few where the listing agent talks about how many they've done, and then   really obvious issues come up that they didn't address early on. I believe an agent who is CDPE trained or SFR trained would be much better out of the gate that some of those who are 'experienced'. And when short sales first hit the scene, very few agents had ever encountered them before. Those agents learned on the job. Some did great with it, and others didn't. 

Posted by Karen Crowson, Your Agent for Change (Coldwell Banker Residential Brokerage) about 8 years ago

Karen I would agree that experience doesn't necessarily guarantee results or a smooth transaction. I will totally disagree with you on an agent passing a CDPE course as making them better - that is a joke along with most of the other credentials like GRI, CRS that many agents like to flaunt. CRS....could be can't remember #$%#!

In many cases it is still the same non college educated person with no business degree that passes one of these courses. That makes them better? I have seen some of the biggest mistakes made by Realtors that say they are CDPE.

In fact CDPE is taught most of the time by former Realtors. Up until a couple of years ago CDPE was teaching Realtors that a credit score was better in a short sale with missed payments than a foreclosure - completely WRONG!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 8 years ago

Great post.  I also believe the law suits are on their way.

Posted by Luis Iniguez, Search Inland Empire Homes For Sale - Short Sale Agent (Option One Real Estate) almost 8 years ago

Excellent post! No wonder so many people conmment on your article. I couldn't agree with you more! I hope the law suits are taken action as soon as posibble.

Thanks for sharing this great article with us!

Have a great day!

Posted by Jark Krysinski *PREC (Personal Real Estate Corporation), TeamYVR Team Leader, BA,ABR,IRES,IMSD,LLB (REMAX CREST REALTY WESTSIDE) over 7 years ago

Bill: This is really an excellent post and should be read by any agent thinking about short sales.  The legal standard for negligence is pretty low.  There has to be a standard of care (not botching the short sale), and a breach of that care (botching it) which causes damages (foreclosure).  So, if there's any uncertainty at all, it is a very sound idea to let someone with experience handle the actual processing.  Thanks for sharing!

Posted by Andrew Capelli (Hoover Elementary) over 7 years ago

Responsible Sales has the Same Fortitude as Responsible Lending. It Is What It Is. Thank You for Sharing.

Posted by Lori Mahaffey, Lori Mahaffey (Movement Mortgage, LLC) over 7 years ago

Great Blog, Great information for Realtors, buyers and sellers. Thanks for sharing this detailed information about how real estate should be handled.

Posted by Marcus Rice, Your Richmond & Northern VA Real Estate Broker (Equity First Realty ) over 7 years ago

Guys thanks for all your compliments on the short sale article. One of my biggest pet peeves is Realtors listing short sales who have no business doing so!! These agent give our industry a bad rap. There are lots of sellers in financial dire straights who are being misled by Realtors that have no clue what they are doing.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 7 years ago

This blog does not allow anonymous comments