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6 Short Sale Properties Buyers Should Avoid. Why some listing agents have short sales all wrong.

If you are a buyer looking to purchase a short sale property, I’m sure you have had some frustration on why a short sale property you fell in love with didn’t close. Rest assured after reading this blog, you should be able to determine which short sale properties you should walk away from and which ones you should stick it out.

On average a short sale negotiated property takes 60-90 days. However, there are unconventional short sale procedures that listing agents are conducting. These methods not only prolong the short sale transaction but often cause the transaction to fail.   
Below are real examples of how some listing agents have it all wrong. Although there are many examples, I have listed the most common mishaps my buyers and I encounter with a listing agent.
 
Multiple Contracts Signed (Executed Contracts)
I often call on short sale transactions where the listing agent states the home has multiple offers and has submitted all signed contracts to the lender. What? All buyer contracts are signed by the seller? How can you sell the home multiple times on the same transaction? I don’t think I have to continue on this subject.
 
Banks do not want multiple offers on their desks. One contract signed and submitted to the lender and maybe 2 backup offers held by the listing agent. That’s it.
 
Multiple offers to the bank but still active in MLS(MetroList)
I am now in the habit of calling a short sale listing BEFORE showing the property. Originally, I would set up 5 – 10 properties for showings and after viewing the properties, calling the listing agent on the ones my buyers would want to put an offer on. After calling, we were only actually eligible for 1 to 2 properties. Listing agents are too lazy to pull their listing off of the market even when they are under contract. I recently called on a short sale property that had 32 offers…yes-32 Offers!! It was still active in MLS (MetroList). 
Another example, my buyers wanted to put an offer on a short sale that had multiple offers. I called the listing agent and asked the status of the offers. Again, as usual, she had submitted all offers to the lender without a signed contract from the seller. I asked why it wasn’t placed in MLS and “under contract”. The listing agent’s response was that since she didn’t have a signed contract from the seller, she didn’t have to place it under contract in MLS. What’s interesting about this is the lender will not accept an offer unless it is signed by a buyer. I don’t think that property will close.
Buyers, if you come across a short sale property that has multiple offers submitted to the bank, still accepting offers, and it is still not placed under contract, walk away. 
 
Communication from the Listing Agent
Before submitting my buyers offer, I spoke with the listing agent regarding our offer. After submitting our offer, I called the listing agent several times and even emailed him regarding the status of our short sale transaction. I still hadn’t received a signed contract from the seller even though we were told we were the only contract submitted to the lender. The listing agent never called us back to tell us that we were in contract. A month later we finally received a message from the listing agent that they are ready to proceed with the short sale. Seriously….a month later?
Luckily, my buyers took my advice, moved on from the property and found a wonderful property that they are “under contract” at this time. You should always be in contact with the listing agent, at least once a week for an update, even if there isn’t one. It is just professional courtesy.
 
Earnest Money
In one of my recent transaction a listing agent did not want to accept my buyer’s earnest money. The excuse given was that if they accepted earnest money, she would not be able to accept other offers. Isn’t that the point? Sell the property before the seller is forced to foreclose.  
If you decide to put an offer on a short sale property, you should be giving earnest money. In return, this lets the seller know that you are serious about the property and willing to wait the negotiating period. If a listing agent does not want to accept your earnest money, more than likely they will not pull the property off the market or place under contract in MLS. You should avoid an agent who does not want to accept earnest money. As a buyer, you should be more than willing to give earnest money if you truly like the property.  
 
Professional Short Sale Transaction Company
If the listing agent is using a professional short sale transaction company, you should feel more at ease. These companies specialize in coordinating the short sale process. They are in constant contact with the bank, title, all agents involved, buyer, and seller on weekly, sometimes daily bases. They often have great relationships with the lender negotiators.

In fact, these companies rarely lose a short sale to foreclosure. They usually have a 97 percent success rate compared to less than 50 percent with an agent that is not certified or not using professional services. Short Sale Transaction Companies coordinate the short sale while the listing agent can be a listing agent.

Ask the next listing agent if they are using a professional short sale transaction company.
 
Signed Contract
After submitting an offer, if you do not receive a signed contract--you are not in contract, even if the listing agent has told you so. My buyers put an offer on a short sale property on a Friday. We gave a full price offer with no concessions. We were told by the listing agent he would get the seller to sign the offer over the weekend. The weekend passed. We didn’t have a signed offer. I called the listing agent and he reassured me that our offer would be signed that week and submitted to the bank. Again, we didn’t hear from the agent. Finally, after calling the listing agents broker manager, the listing agent called with news that our offer was submitted to the bank with 2 other offers. I still didn’t have an executed contract. 

I understand that it is perfectly normal for the listing agent to present multiple offers to their seller. In fact, the property is probably a great bargain. In this case, I don’t believe the listing agent even presented our offer, especially after calling his broker manager for some answers.     
 
Bottom line, a Short Sale Transaction should be treated as a “normal” sale.
*Present all offers to the seller (not the bank). The seller still owns the property.
*Seller accept the best offer (not the bank)
*Execute the offer
*Place the listing in MLS under contract
*Submit the signed contract by both parties to the bank  
*Take back up offers


The only difference than a normal transaction is the seller is asking the bank to accept a lower offer than what is owed on the mortgage and the time frame it takes to negotiate. That’s it! I don’t understand why some listing agents are treating a short sale transaction differently.

There are many listing agents that can negotiate a short sale with great competence. Unfortunately there are agents that have no clue on the short sale process.
Please call The Denver Realty Company. We are Certified Distressed Property Experts. We can help both buyers and sellers negotiate a successful short sale!
Michael Mancha
Broker Owner
303-302-3686
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What Parents Should Know When Moving Children

Moving can be extremely stressful especially if you have children. It is important to be aware of the things that may be a concern to your children when making a move.

A few areas of concern for children when making a move may include:

  • Preschool children tend to worry about being left behind or separated from their parents.
  • Kids aged 6 to 12 can be concerned with how their daily routines will be affected.
  • Teenagers are concerned primarily with fitting in and having their social life disrupted.

A way to ease these concerns may include:

  • Communicating with your child about what the new house will be like.
  • Take them on a visit of the new home and neighborhood (if possible)
  • If you can, visit the school with your child and meet some of the teachers.

Involving your children in the move can help make the transition easier. Your kids can be a great help to you and the move if you involve them such things as:

  • Packing some of their own special belongings, and decorate the box with stickers and markers.
  • Make plans together on how to decorate their new room.


There is a lot to consider during a move and by involving your children you just may relieve the stress your children are feeling, reduce your own stress and be able to focus more on other aspects of your move!

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Buying a New Home: 10 Reasons to Use a Real Estate Agent

Why, then, should a buyer enlist the services of a real estate agent? Here are ten reasons that I think make a lot of sense. After reading them, see if you agree:

1 -- Experience

Purchasing a new home may well be the largest expenditure that you ever make. So it simply makes good business sense to enlist all the help you can get.

A seasoned real estate agent has completed more real estate transactions already this year than you'll likely make in your lifetime. That adds up to a whole lot of knowledge and experience. Experience that can help navigate you safely and securely through every aspect of the buying process.

2 -- Knows the Market

A real estate agent will know what's happening in a particular area, or neighborhood, and help you decide if a home you find is a good value. Once you find a property that interests you, your agent will show you "comps" (comparable properties) of similar homes that have sold recently, as well as those that are currently on the market.

And if your real estate agent works with an established firm, he or she will have instant access to a host of proprietary tools -- and property information -- that may be difficult, or even impossible, to find on your own. All this information will help you make a well-informed decision.

3 -- Saves Time

A good real estate agent is an organizational genius. He or she will manage to get you in to see new properties as soon as they become available -- and arrange the most appointments possible within your available time slots, no matter how limited.

But remember, accessibility is a two-way street! Be sure to support your agent by being as flexible as possible -- especially when your time is very limited.

4 -- Good Listener

If you decide to use a real estate agent, look for someone who asks as many questions as you do. When you mention a price range, does the agent give you a 'standard' list of available properties, or is he or she able to make -- or adjust -- his or her recommendations based on what comes up in your conversations?

How interested is the agent in listening to your point of view? How many questions does he or she ask? After all, your real estate agent's recommendations should vary substantially based on your personal needs and goals (for example, you may be starting a family, need to configure your new home to accommodate an office, need space for your son's new car, or be downsizing).

5 -- Tells the Truth (even when you don't want to hear it!)

Expect that a good real estate agent will challenge you once in a while, ask the tough questions, and yes, even disagree with you occasionally. When he or she makes a recommendation that seems off-base, give your agent the opportunity to give you the facts -- and share his or her knowledge and experience -- before making a decision. Learn to trust your agent's intuition, insights, and perspectives; they'll often lead you in the right direction.

6 -- Respects Your Budget

One of the most important things that your real estate agent will do is help you determine how much you can afford to spend. He or she may well ask you to consult with your accountant, financial planner, and/or mortgage broker before you make this important decision.

In some markets, there's a lot more to purchasing an apartment than having cash for the down payment, and securing financing. For example, most Manhattan cooperative buildings ('co-ops'), which account for about 75 percent of the properties in the city, will also look at your debt-to-income ratio (DTI), and your post-closing liquidity (yes, it can be a bit complicated!).

A good real estate broker will understand the particulars of your market, and help you find a terrific housing solution that you'll be able to qualify for financially -- and that will be possible within your budget.

 7 -- Team Player

Your real estate agent should be able to recommend a great team of professionals to support your purchase -- from mortgage brokers and appraisers, to contractors and designers and real estate attorneys.

8 -- Getting to Closing

Remember that finding the right property is only the beginning. Be sure your real estate agent is well prepared to negotiate aggressively on your behalf, and assist you in finding financing, if necessary. Your agent should be ready to follow through with your bank or mortgage broker, any other agents involved in the deal, and with your real estate attorney, until the purchase is complete.

And if you're purchasing a home in Manhattan, be sure you have a real estate agent who is adept at helping you put together the materials necessary for the board application package, following through with the management company, and if it's a co-op purchase, preparing you for the board interview.

9 -- Gives Timely Updates

Throughout the buying process, stay in touch with your real estate agent regularly. He or she should give you regular updates on new properties, any changes in the local real estate market, mortgage rate changes, and so on. And you should update your real estate agent right away should any of your priorities change, or if your research turns up a property you may be interested in seeing. The result of working together closely? Finding just the home you're looking for, more quickly.

10 -- The Relationship

Don't underestimate the importance of personality when you choose your real estate agent. You'll be spending a lot of time with them -- and entrusting them with one of the most important transactions of your life. So be sure to find someone you not only trust and respect, but also look forward to working with.  

Many home buyers try to find the perfect property on their own. No surprise, actually. With internet access to more real estate information than ever before, it's fairly easy for anyone who's computer literate to access a list of available properties in every part of the country.

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