The Reality Of Working With Inexperienced Realtors
If you find yourself in foreclosure and want to explore the option of avoiding losing the home to the bank, you need to make absolutely sure that the real estate agent you entrust to handle your Short Sale actually knows what they are doing.
As of today, in Broward County, Florida, there are over 8,000 homes on the market on the local MLS, 2,700 of them are listed as Short Sales. That’s a whopping 34% of all of the homes being marketed are in foreclosure and being offered as Short Sale candidates.
But how many of them actually sell? Well over the last 6 months, there have been 1215 closed Short Sales in Broward County. In that same period of time, over 8,000 previously listed homes in foreclosure have had failed Short Sale attempts.
So it’s easy to see that you have about a 14% chance of having your Short Sale succeed. I wouldn’t take those odds on a card game, much less on the sale of my home. Yet, we see homeowner after homeowner walking blindly into the bear trap of listing their home with an agent who has no clue about the process.
If you’re not sure what happens if your Short Sale fails, let me outline that for you right now.
1. You, as the homeowner will be forcibly evicted from your home, have your property repossessed by the bank, have your credit damaged for years to come and possibly be on the wrong end of a HUGE deficiency judgment.
2. Your Realtor will simply move on to the next listing they can obtain and give it a shot all over again with someone else.
What this means is that your financial wherewithal will be negatively impacted possibly to the brink of insolvency, while your agent, who has absolutely nothing to lose, simply offers you an apology…if that.
So what’s a homeowner to do? Well you need to take control of your situation and here are 10 steps that you can take to figure out if the agent you are speaking to has any idea as to what they are doing:
1. How many short sales have you closed? Easy question. All that is required is a simple answer. You don’t want to work with an agent who has never completed a transaction as complex as a short sale. End of story. Move on to the next agent if they don’t have history. And oh by the way…don’t take their word for it, ask to see some proof. Ask to see a redacted copy of a few HUD statements showing the deals actually closing.
2. Do You Have Another Job? As the real estate market turned and the economy went into the tank, many real estate agents either left the business or have taken jobs to make some money and sustain themselves. While there is nothing wrong with that…it does pose a problem for you as the Client.
You see most agents have been trained to simply “get the listing”. Their job is to get homeowners to list with them and to let other agents actually do the selling. That’s fine..I guess, in a conventional sale, but a short sale requires a certain tenacity and attentive ness. You can’t really be all that attentive if you’re working full time at Denny’s.
3. Is The Agent A Ghost? Before you agree to list your home with any agent, try to call them 3 or 4 times throughout the business day. Remember, if they aren’t answering your calls how it probably means they aren’t answering anybody else’s calls either. That’s not really a good way to effect a successful closing.
4. What Are You Going To Do To Market My Property? Do you hear that? That’s the sound of crickets. Market your property? You can’t possibly expect me to spend any time or money trying to market a short sale when only 14% of them ever close do you? This may be your financial livelihood but to the inexperienced agent it’s just another listing for them to stick on the MLS and “see what happens”.
5. How Are You Going To Price The Property? This is where most short sales fail. They are doomed from the start. Most agents are used to pricing homes near the top of the market and then gradually stepping the price down over time until they get an offer. It’s an old game and it’s archaic. Get an agent that wants to do that and you are pretty much assured of being part of the 86% of those who end up failing in their short sale attempt.
6. What Will The Bank Take? Nothing SCREAMS incompetency more than an agent who asks the bank to set the price. Some expert eh? Does the bank call you and ask you what interest rates should be? If your agent has any clue whatsoever they will know that you are going to be pretty much dead in the water if this question is asked of the bank. Think I’m wrong? Ask one of the 86%‘ers if they got the price the bank “approved”. I laugh when I see comments link the bank already approved the price. It’s like a neon light that says “abuse me and take my client’s home”.
7. What’s The Difference Between A Deficiency Judgment And A 1099? You’re going to love the doozie of an answer that you’ll get from this one. You can find out the truth about deficiency judgments here but suffice it to say most agents can’t discern between the two and by not knowing this information hands down, you as a homeowner are not being given the requisite information that you need to make an informed decision.
8. Which Offer Should I Accept? This one always exposes incompetence like a bright light does to a roach. You are the owner of the property. Not the bank. You decide which offer you will accept. You do NOT send all of the offers to the bank and let them decide. That is short sale suicide, yet it’s the Modus Operandi for so many real estate agents.
9. What’s A Lowball Offer? An agent will tell you that it’s someone just trying to “steal your home”. Then after you end up losing your home to foreclosure and the bank dumps it for less than the proverbial “low ball offer” your agent will be amazed as to what happened. You, as the homeowner, need to understand that you are in a liquidation status. It’s no longer a home…it’s a property. It’s a commodity and it is being salvaged. It’s in the discount bin. And it should be priced accordingly. Anyone else who tells you otherwise isn’t looking out for your best interests.
10. What Happens If The Short Sale Fails? I saved this for last because it pretty much underscores what I have written here. When you ask the agent this question there is only one answer. That answer is you are going to lose your home and the bank will take back the property.
So getting this direct answer from your agent will tell you if you are getting the straight scoop or if you are just another listing. Because if they know the answer to this question then every effort…every effort, must be taken to make sure that you are not part of the 86% who end up broke and effectively homeless.
So what’s a homeowner to do? Real simple, you need to list your home with an agent who brings the full package. The agent should be part of an experienced team of professionals who have successfully completed short sales.
If you ask the questions shown here and get bad answers then move on. If you have a problem finding a reputable crew to represent you, email us and we’ll do our best to set you up with some people who actually know what they are doing and who can competently represent you.
We have been seeing short sale approvals in as little as 3 days thanks to the professionals we are involved with. So please click the button below if you need help with a short sale. And although we are in Broward County, Florida, we have a network of professionals that we work with nationwide.
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