Don't Be Shocked - Short Sale Buyers Have Needs, Concerns and Rights, Too

By
Real Estate Agent with RE/MAX Real Estate Connections

 

Justice Scales

Agents for short sale sellers frequently complain that

  • earnest money checks are not deposited and
  • buyers cancel contracts after several months and
  • buyers write contracts on more than one short sale

I respect the listing agent's right to represent the seller's best interest.  That doesn't make it a one way street.  The buyer is as much a part of the contract as the seller and has interests to be represented.

Misleading Statements By The Listing Agent

  • Recently, I wrote an offer on a short sale. 
  • The listing agent advised my contract was accepted by the seller and sent to the lender
  • Two months later I was told there were multiple contracts being reviewed by the lender - mine was not the only one as I had been told
  • At the end of 3 months I learned they had accepted another contract a month earlier and had just gone to settlement
  • My buyer was an unwtting and unwilling backup
  • My buyer's check had not been deposited, but they had wasted three months

Bankruptcy

  • Over a month ago my offer prevailed over 26 others on a short sale
  • Contract was sent to the lender
  • Buyer changed their minds and decided to file for bankruptcy
  • My buyer had wasted a month of their time

Foreclosure

  • We've all experienced or heard of situations where the lender decided to foreclose on a property duing the time when buyers were waiting to hear about their purchase offer

Too Many Assets

  • An agent in my office went to settlement on a short sale.  Nobody had bothered to tell the sellers they had too many assets and would have to sign a note to reimburse the lender for the difference.
  • Sellers refused to sign and the sale fell apart

To Conclude

  • There is no question the short sale seller does not have as much control over an unpleasant situation as most property owners would like to have.
  • That doesn't mean buyers need to bear the brunt of it for months on end not knowing whether or not they have purchased ahome.
  • All agents who work on short sales have to respect the rights of all parties to a contract and not expect the buyer to just sit back and wait months only to learn the transaction will not be completed

***********************************************
The Kruschka Team has 33 years full time experience in Prince William County

”Experience Isn’t Expensive – It’s PRICELESS”

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Contact Karen and Art by Email or call us at 703-690-6569. Put our record of customer service, real estate experience and state-of-the-art technology to work for you in Alexandria, Arlington County, Fairfax County, Prince William County, Stafford County or the entire Northern Virginia Area.

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Show All Comments
Rainmaker
152,098
Kathy Knight
Intracoastal Realty Corp - Wilmington, NC
BROKER, ABR, CRS, GRI, SFR, Wilmington NC Homes and Beach Homes

Your comments are totally fair Karen. I don't know why the listing agent does not take a more active role to get back to the other agent in the transaction.  Some of these transactions as you said can get totally out of hand.

September 08, 2009 11:58 AM #1
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Julie Chapman
Lennar - Jacksonville, FL
New Homes Sales

Karen,

Thanks for posting this - it is hard to be the listing agent and I live in an area where I fortunate to handle very few of these. 

 

September 08, 2009 12:18 PM #2
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Karen Kruschka
RE/MAX Real Estate Connections - Manassas, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Kathy  Thank you  Since it is a major sector of our market many of them believe they are in the driver's seat and the buyer is lucky to have the ability to make an offer  Karen

September 08, 2009 01:37 PM #3
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Karen Kruschka
RE/MAX Real Estate Connections - Manassas, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Julie    I agree - I won't list them  Karen

September 08, 2009 01:38 PM #4
Rainmaker
1,390,940
Tom Braatz
Re/Max Realty Center 262-377-1459 - Oconomowoc, WI
Waukesha County Realtor Real Estate agent,Waukesha

Karen

We do a number of them and it can be a real headache at times. When we write on them I often get a lot of those same comments.

September 08, 2009 01:51 PM #5
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Karen Kruschka
RE/MAX Real Estate Connections - Manassas, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Tom  There are legions of agents who write on short sales and have the same problem Karen

September 08, 2009 02:15 PM #6
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Chris Ann Cleland
Long & Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Northern VA

Karen:  Did you know that short sellers can declare bankruptcy and still short sale their home.  I know.  I did one this year. 

Did you know that in our MLS system if a sellers agent is taking multiple RATIFIED contracts and submitting them to the bank they are in violation.  One ratified contract at a time.  Report those listing agents.  Eventually, they get their memberships revoked by MRIS.

Did you also know that short sale approval is gained only when the lenders accept the proceeds of the sale as payment in full.  If a short sale approval letter requires a promissory note, in our Regional Short Sale Addendums, that is NOT an approved short sale.

Short sale listings are not slot machines for buyers who feel "they may get lucky."  They are for buyers who have the time to wait.  Should the buyers be expected to wait beyond their initial timeframe allotted for short sale approval?  That's up to the buyers if they wish to extend the approval deadline.

All in all, if we are all playing by the same rules, these short sales can go very smoothly.

September 08, 2009 03:01 PM #7
Rainer
53,462
Kim Curran
RE/MAX Unlimited of Northern Virginia - Bristow, VA

Karen,

The  name should be changed to protect the innocent. I know that the short stands for "short of funds" but the misnomer is there. Short sales are anything but short. And just how long should a buyer be expected to wait? I had written one that we waited for an answer for over 80 days. Personally I think that is way too long and so did the buyer. We walked.

The banks need to get their acts together and hire more people. Hiring more people just might prevent some short-sales and foreclosures. What a win-win that would be for everyone. 

September 08, 2009 06:14 PM #8
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Karen Kruschka
RE/MAX Real Estate Connections - Manassas, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Chris Ann I do know all these things.  As you point out, the purchaser can extend the time frame, if they want.  But, if they do not want to, they have the right to opt out.  Many of them are looking at price and cannot fathom the process taking as long as we tell them it will, then become disillusioned.  Fact is, all parties, buyers, sellers, listing agents and selling agents take risks with short sales and they must accept these risks when dealing with them.  No one except the bank has any control. 

September 08, 2009 06:55 PM #9
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Karen Kruschka
RE/MAX Real Estate Connections - Manassas, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Kim,

I absolutely agree.

 

September 08, 2009 06:58 PM #10
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Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
Realtor - Charlottesville Virginia Homes and Horse Farms

Karen - So many short sales are nightmares.  If I am buyers agent I would rather deal with a foreclosure.  I appears that he vast majority of short sale contracts fall appart.

September 10, 2009 09:32 PM #11
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Karen Kruschka
RE/MAX Real Estate Connections - Manassas, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Pam  About the only people who will disagree with you are agents that list short sales  Karen

September 11, 2009 07:54 AM #12
Rainmaker
339,351
Art Kruschka
Administrative Manager - Manassas, VA
Manassas Woodbridge Dumfries Real Estate Sevices

Karen I am aware your reports on Woodbridge are an integral part of your market strategy to be current on many facts throughout Prince William County. The obvious goal is to provide your clients with the very best possible representation and blog posting is an excellent method and may include posts about other interesting locations or subjects in our area

September 26, 2010 06:04 PM #13
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Karen Kruschka

- "My Experience Isn't Expensive - It's PRICELESS"
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