The Other Side of Short Sales

By
Real Estate Agent with Lyon Real Estate BRE #00697006

keys to a sacramento short saleEverybody talks about how hard it is for a buyer to wait for short sale approval, but you rarely hear people talking about the toll it takes on sellers. Short sales are no picnic for anybody, but they are especially difficult for sellers.

If the deal falls through or the bank rejects the short sale, the buyer hasn't lost everything. The buyer has lost a little time. The buyer can go buy something else. The sellers, on the other hand, either start over with a new negotiator or let the property go to foreclosure, which is the very thing they were trying to avoid by doing the short sale. This is after waiting for months for an answer from the bank.

It's the uncertainty that sellers have to face. It's emotional blackmail. They don't know what the bank will do. Not even a seasoned Sacramento short sale agent can accurately predict 100% of the time what the bank and the bank's investors will demand. From the torture of having to write a hardship letter to handing over personal documents such as tax returns, bank statements and payroll stubs for scrutiny and examination by people who don't give a crap about the seller, short sale sellers experience plenty of anxiety. Who wants to be placed under a microscope?

They worry about what the neighbors will think. Will the neighbors judge them because they are trying to do a short sale?  Will the neighbors get ticked off that the short sale will pull down their property values? Will pranksters throw eggs at their house?

If they have children, do the kids pray on bended knees at night that their short sale gets approved? Our Heavenly Father, bless mommy and daddy and Sparky, and please let the bank approve our short sale.

Sellers worry that their lives will never return to normal. They have never-ending questions to which there are no cut-and-dry answers. Should they pack up the house? Will they move in with their parents? Can they insure a vacant house? Who will water and mow the lawn? Who will rent to them? Is their credit rating shot? Where do they have to move to find a job?

I wish buyers would think about this before defiantly walking away. They're not harming the banks. They are causing irreparable damage to the sellers.

Photo: Big Stock Photo

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Certified HAFA Specialistelizabeth weintraub

 

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Elizabeth Weintraub is an author, home buying expert for About.com, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area with an emphasis on Elk Grove. Call Elizabeth Weintraub at 916.233.6759. Put 40 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. BRE License # 00697006.

The Short Sale Savior, by Elizabeth Weintraub, available with free shipping.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

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Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Bob Hertzog 09/13/2010 02:17 PM
  2. Las Vegas Real Estate Listing Agent Dawn Barrier 702-812-4550 09/13/2010 02:34 PM
  3. Dawn Maloney 09/13/2010 02:56 PM
  4. Maria Mastrolonardo 09/14/2010 09:42 AM
  5. Chris Ann Cleland 09/18/2010 11:39 PM
Topic:
Real Estate General Information
Location:
California Sacramento County Sacramento
Groups:
California Short Sales, REO's, and Foreclosures
Club Chaos
Lyon Realtors
Posts to Localism
Short Sales Specialists
Tags:
short sale approval
bank rejects short sale
foreclosure
short sale
sacramento short sale agent
hardship letter
insure vacant house
elizabeth weintraub

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Show All Comments
Rainer
15,692
Rebecca Madsen
RE/MAX Accord - Discovery Bay, CA

Elizabeth, Excellent way to bring attention to the peoples lives that are effected by short sales. I find my sellers are doing their part, but the buyers can cancel as though the contract doesn't mean a thing. And the buyers are a key part of the short sale approval process.  Flakey buyers...won't get you going!

Sep 13, 2010 01:25 PM #16
Rainmaker
174,322
Ken Patterson
TPR Properties - Rocklin, CA
Roseville Real Estate, TOP Rocklin Realtor

Hi Elizabeth,

Very true indeed...  I hear very often from buyers or those who have evidently not been in a tight spot financially in their lives that short sellers deserve to lose or don't deserve help or should have to pay and so on...  The reality is usually they do suffer a series of pains all in an effort to right their personal and financial ship.  I have a great deal of respect for those out there "doing the right thing" as it fits their lives on either side of the curve and also for those who have managed to stay very financially sound through these recent hard times.  However, I hear all too often a serious lack of kindness and understanding and a propensity for judgment.  When I hear others judging, etc... (sometimes my own buyers) I do my best to promote having a kinder attitude about others situation regardless of how it came to be. 

thanks for the post!

Sep 13, 2010 01:26 PM #17
Rainmaker
102,570
Brian Bean
Dream Big Real Estate - Riverside, CA
Homeowner Advocate, Dream Big Real Estate, S.Calif

So true, Elizabeth.

And that's the real reason that agents who represent sellers in a short sale MUST be on their best game and constantly educating themselves about the latest trends and strategies. There is just too much at stake for the seller and too much liability for the broker.

 

Sep 13, 2010 01:50 PM #18
Rainmaker
163,421
Carol Skon
Green Realty Group - Princeville, HI
RB, Kauai, Hawaii Real Estate

Elizabeth,

I am representing sellers in short sales and I can see/hear the stress of what they are going through.  In one recent short sale the buyer's agent kept telling me the buyer was hanging in there. On the day we got the approval letter the buyer's agent told me that buyer was ready to go.  The seller had paid an attorney to review the letter. Two days later the buyer walked.  I am wondering if the agent was even checking in with the buyer.  The seller is so frustarted and can hardly believe that we have to start over. 

Sep 13, 2010 02:04 PM #19
Rainmaker
1,283,605
Carla Muss-Jacobs, Principal Broker/Owner
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% o... - Portland, OR
Buyer Focused ~ Buyer Results

True!  It's even harder on the seller, who now has to either do it all again, if time permits, or face the inevitable.

Sep 13, 2010 02:12 PM #20
Rainmaker
227,511
Bob Hertzog
Summit Home Consultants - Phoenix, AZ
Designated Broker

Thanks for sharing such a valuable post.  I wish all short sale buyers and their agents could read this.  Re- blogging it now!  Good Stuff!

Sep 13, 2010 02:15 PM #21
Rainmaker
278,828
Las Vegas Real Estate Listing Agent Dawn Barrier 702-812-4550
Prominent Realty Group, LLC - Las Vegas, NV
Las Vegas Homes For Sale

Great post and so true! Couldn't have said it any better! Going to re-blog

Sep 13, 2010 02:29 PM #22
Rainmaker
850,682
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY
Broker-Owner

Very true that the buyers focus on the banks when they pick up their marbles and leave and seldom consider the toll it takes on the seller. People's financial future is linked to a successful short sale when selling. Their mailing address is at stake when buying. Big difference. 

Oh, and for those who lament that it isn't just their address, but the school their kids attend or some other heartbreaking thing, if the bank rejected your offer and you have NO OTHER option in that school district at that price, you were trying to sneak in the back door and it got shut on your fingers. 

Sep 13, 2010 02:58 PM #23
Ambassador
1,095,008
Bryan Robertson
Catarra Real Estate, Inc - Los Altos, CA
Broker, Author, Speaker

You're right, very few people talk about the impact on sellers.  My issue with the banks and short sales is that they have no penalty for taking so long.  In a normal sale, if the buyer or seller delays the closing, they're responsible for paying the costs incurred by the other party.  Not so for banks, which is unfortunate.

Sep 13, 2010 03:13 PM #24
Rainer
18,900
Derek Wood
Marblehead, MA

Great point. The seller is very much handcuffed to the wims of the bank.

Sep 13, 2010 03:46 PM #25
Rainmaker
127,313
Faye Taylor
Floresville, TX
Faye Taylor

What you say is so true.  The buyer is anticipating a "deal" while the seller is anticipating hope to help save their future.  So when the buyer walks,  that hope is crushed.

When the sellers are in the short sale situation prior to a foreclosure, the emotional roller coaster ride can be daunting.   To have their hopes up and then crash is devastating.   Sometimes you can understand why people go to foreclosure.

As one of the big REO agents says "As you walk through a home, you see evidence of someone's life left behind such as pictures or a Barbie doll or other toys.  It is sad."   It truly is.  We all feel the pain of their loss.  Someone had such high hopes when they bought this house and now it sits empty.  So we all wish for a successful short sale.  Please hang in there and prepare your buyers and your sellers for the roller coaster ride.

Sep 13, 2010 04:49 PM #26
Rainer
138,335
John Zappia
Maine Custom Realty - Portland, ME
Maine Custom Realty

What kills me is to see properties I've had buyers wait on for 4 months, then finally bail out because they figure it's never going to close, then see it sold 6 months later for half what my buyers were going to pay for it...WE, the public, ultimately pay for that....why they just don't let the brokers run them to the table when we have a valid contract is beyond me..it would wind down the inventory a lot quicker...banks should look at the contracts, immediately fax us a letter of approval, and let us do our jobs....I have one right now just 15k below what they owe and I can almost guarantee they'll screw it up and get less later.

Sep 13, 2010 05:29 PM #27
Rainmaker
221,221
Chris Sloan
Group 1 Real Estate - Tooele, UT
Tooele Utah Real Estate

Simply a brilliant post. It's so easy to forget sometimes...Thanks for the reminder!

Sep 13, 2010 06:22 PM #28
Rainmaker
455,160
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
Destin FL Real Estate

Elizabeth - You're right, buying a short sale, or any property, is not something to take lightly.  It's grave.  That's why we get deposits, strong offers and buyers willing to wait.

Sep 13, 2010 06:40 PM #29
Rainmaker
609,604
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

Fantastic post.  A must-read for every agent considering working a short sale.  As Wendy put, it deposits, strong offers and buyers willing to wait usually seals the deal.  Also, having a strong and competent lender is important. 

Sep 14, 2010 09:46 AM #30
Rainmaker
312,553
Lori Churchill Cofer
Beasley Realty - Pullman, WA
Realtor - 509-330-0086 - Pullman, WA

Elizabeth,

All I can say is they are lucky to have you ease their way...what I don't get is an agent taking one on when they not only don't know how to do them...and worse...don't care...

Sep 14, 2010 10:20 AM #31
Rainmaker
1,220,645
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

More than in regular real estate transactions, there are a lot of emotions zinging about in short sale deals. I try to be sensitive to the needs of all parties but I especially want to be there for my sellers. Some days it's like being a guidance counselor, others it's like being a doctor, housekeeper or maybe even sometimes a cruise ship director or stage manager. All situations are different and require flexibility, empathy and, most of all, I suppose, kindness.

Sep 14, 2010 10:45 AM #32
Rainer
30,768
Ryan Case
Pacific Servicing - Temecula, CA

If they can't make an easier process for short sales then perhaps agents should just stop doing them being they are such a hassle, take forever, and success rate is low!

Sep 14, 2010 10:50 AM #33
Ambassador
1,843,328
Jeff Dowler CRS
Solutions Real Estate - Carlsbad, CA
Carlsbad CA Homes for Sale (760) 840-1360

Elizabeth - I missed this somehow and just found it via a reblog of another post that mentioned how wonderful it was. Agreed. We certainly don't hear much about the seller and aren't they ultimately the ones who suffer most? The bank certainly doesn't. The seller's situation simply worsens while things drag on in many cases, with some facing the foregone conclusion of the trustee's sale.

 

Sep 16, 2010 10:11 AM #34
Rainmaker
640,098
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro

Elizabeth, I have done two short sales (long before they were popular) and in both instances I lost buyers along the way. Luckily both times I ended up with a buyer showing up at the end who ended up purchasing the home.

Sep 18, 2010 11:42 PM #35
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Rainmaker
1,220,645

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