Why Not a By-Owner Short Sale?

By
Real Estate Agent with Samson Properties VA 0225-059831

Why Not Try a By-Owner Short Sale?

Copyright (c) 2012 Deanna & Jim's GOLD Team

 

Doing it yourself has a long and proud tradition.  There are some things that are simply not good to attempt yourself - root canals come to mind. This article explores the most important reasons not to attempt handling your own short sale, even if you are yourself a licensed agent specializing in short sales.

 

1. The bank expects the seller side of a short sale to be handled by either a licensed real estate agent, a title company, or a real estate attorney, period.  The bank will need to provide evidence to whomever holds the note they are servicing (their investor, who will need to approve the short sale) that the property has been seasoned in the market for a reasonable period of time at a series of prices that provide reasonable evidence that the price offered is in fact fair market value.

 

2. The bank expects to pay normal commission for listing and selling the house. Attempting to reduce the commission paid will not put money in the seller's pocket. The seller is guaranteed to get exactly zero since the bank has a higher priority claim on the proceeds.

 

3. The bank will insist on the signature of an arm's length short sale affadavit signed by buyer(s), seller(s), listing agent and selling agent that none of the parties are related to each other or otherwise financially linked.  It is impermissible therefore for any of the following scenarios:

3a.  Buyer is licensed agent representing himself as selling agent.

3b. Seller is licensed agent representing himself as listing agent.

3c. Seller is licensed agent representing buyer as selling agent.

 

4. Pursuing a short sale successfully requires extraordinary attention to detail, persistence and organization. Smart sellers choose a listing agent specializing in short sales with a track record of success and extensive formal training.

 

(The GOLD Team has CDPE, MBA, MSE, MA designations and has completed additional short sale trainings by Floyd Wickham, AssetLink, and NSSC.)

Posted by

Deanna & Jim Gilbert, MBA, MSE, MA, CDPE, Associate Broker VA & MD

550+ Sales Since 2001

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Rainmaker
713,559
Chuck Carstensen
Minnesota Real Estate Expert
RE/MAX Results

I dont know why a for sale by owner would ever do a short sale.  Call a local Realtor!

March 05, 2012 05:49 AM
Rainmaker
222,732
Jim Gilbert
The Golden Homes Team
Samson Properties

Sometimes it is difficult for an agent, particularly an agent skilled in short sales, to understand that their bank will not allow them to represent themselves as listing agent or selling agent in a short sale transaction.  Nor will the bank allow them to refer themselves to another agent and collect a referral.

The arm's length affadavit is intended to prevent these activities which the banks tend to view as fraudulent.

March 05, 2012 06:01 AM
Rainmaker
93,425
Rachel Rabinowitz
The Baltimore Realtor
Coldwell Banker Baltimore MD

Hello Gold Team - great post, "suggested" by me. I am going to say the thing I should not say, if you are thinking about handling your short sale yourself there is likely a correlation between this wrong thinking and how you ended up in this situation in the first place. Brutal, I know, but I've done a consultation recently where this was the mentality of the owner.

I told them to hire a short-sale specialist and If you guys were in Maryland (Baltimore Area), I'd be happy to recommend you.

March 05, 2012 06:02 AM
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Rainmaker
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Jim Gilbert

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