All the things short sales are. And those that they are not.
Jul 28th, 2010 by Pickett Street Properties Team
DISCLAIMER: This was initially published as part of an email newsletter to my clients. It made the rounds, and I was asked to post it on the blog to make it more accessible.
I wish that there were more short sale jokes – in the same way that there are lawyer jokes, blonde jokes, or jokes about North Dakota. This would mean that there was at least a level of understanding about short sales that was shared among a large group of people. And it would mean that there was something humorous about the process…
I’ve had a couple of painful weeks with short sales. Most real estate agents don’t handle short sale transactions because they (1) take a long time (2) pay less money and (3) are frustrating beyond measure. When some of my own clients were faced with the possibility of having to short sale, I decided to educate myself on short sales to ensure that they received the same measure of customer service as my other clients. Negotiating short sales is a lot like navigating a minefield…only it’s on a giant treadmill where the environment is constantly changing, and the threat of danger has to be reassessed and evaluated on a constant basis.
Having a good real estate agent that is familiar with the short sale process is important, but sometimes that’s not enough. Banks have policies and procedure, and no amount of reality will get them to change these. Because many real estate agents list short sale properties too low, banks have been forced to have values confirmed by at least two other real estate agents, sometimes even an appraiser or two. If even one of these evaluations comes in unrealistically high, there is nothing that can be done to convince the bank that the home you have listed for $230,000 is not worth $260,000, nor has it been worth that much since 2008.
I spoke to a real estate agent recently that was doing an evaluation on one of my short sale listings. He told me that he did over 2,000 of these evaulations in the past year. I did some research and found that this agent hadn’t sold a single home in 12 months. As far as I’m concerned, he doesn’t really know what it takes to sell a home in our current market, yet the bank is going to give his evaluation more weight than anything I have to say, even though our team has sold 40 homes in the last six months.
Point is – short sales aren’t funny. Or logical. In most cases they are a better option than foreclosure, and even though I’ve never had any of my short sale not sell before foreclosure, the bank’s unmoving resistance to reason is going to result in more foreclosures and fewer successful short sale closings.
So how does a real estate team embrace this certain change? By adding an auction service to their repertoire. Acknowledging that more and more properties will be going to auction, we have added a member to our team that will allow our buyers and investors to buy homes at the county auction. Because homes at auction have to be purchased with cash, most people are restricted from taking advantage of the opportunities that can be found on the courthouse steps. John McCants is the newest member of Pickett Street Properties, and he’s been helping people grow their wealth for years by purchasing properties at auction. With his addition to our team, and the partnerships that he brings with him, our clients too will be able to buy properties at auction with John’s expertise and experience behind them. If this is something that you’d be interested in learning more about, or if you know someone that would be interested, drop me an email or give me a call to set up a meeting with myself and John.
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