Honestly, the commission isn't why Realtors HATE short sales. The problem with a short sale is they are trying to sell a house that in todays market is only worthy 100,000 for a person who paid 350,000 for it a few years ago! Thats not the bad part, the bad part is that the mortgage has to be satisfied so when the bank sees that the seller wants to be forgiven and not have to payback that extra 200-250,000 that is owed on the mortgage they get cranky. But the bank has to sign off on it in order for the sale to go through.
ALso, just because an agent puts the house on the MLS for 100,000 doesn't mean that is an approved price, they could get a full price offer and the mortgage company who has to sign off on it might say, that they want $150,000. The list price is just a suggestion from the listing agent not an absolute fact.
So looking at short sales is kind of a waste of time, yes in theory they are great because they save some poor sap from going into foreclosure or maybe bales them out of a bad mortgage they got into...but just because you see that little price there doesn't mean that is what it will sell for.
The other problem with a short sale is that "sale price may be insufficient to pay the total of all liens and costs of sale and the owner(s) of record may not be able to bring sufficient liquid assets to the closing to cure all deficiencies" which basically says that just because the bank agrees to maybe let you purchase that house for $100,000 it does not guarantee that you will get a clear title so you might find yourself with back owed taxes, liens and judgements against the property that you are responsible to clear up not the previous buyer or the bank!
Okay...enough bitching about the price...now onto the banks....when you put an offer in on a short sale and the homeowner signs off on it THEN an entire package is sent to the bank...did I mention that nothing gets started on a short sale until there is an offer? Oh yeah..that sucks because the bank takes anywhere from a few days to a few MONTHS to process that package. So you can be sitting around twiddling your thumbs to just get an acknowledgement from the bank that your offer was received...unless the listing says "BANK APPROVED PRICE" then I wouldn't even waste my time. You will be waiting for 3-6 months to find out if they bank will even sell it to you. Since you are financing that makes it difficult because you can't really get your financing in order until you have a closing date and typically once the bank approves a price after making you wait for an eternity...they want to close by the end of the month...so that means you gotta throw together a loan that would normally take 30-45 days to process and get it done in 10 days...and then they'll want to up the price if you can't close that quick.
And don't even get me started if there are more than one mortgage on the property!
I guess to the commission part plays a part too...but any commission is a commission. what sucks is when agents do not list a short sale right. Typically the bank will negotiate the commission as part of the terms. On the MLS when an agent takes a listing they advertise what the agent who brings a buyer is paid. Most of the times its anywhere from 2-4% depending on who is selling the house, the price etc. But with a short sale just because it says you'll get 3% doesn't mean the bank won't try to negotiate it down. In Florida since we know this we'll put on the MLS 2% because we know we can usually get a 4% split no problem. But we'll start the bank with 7% and try to get it negotiated down to 5 or 6. Agents get cranky when they make less but never when they get an unexpected extra few points.
Listing agents not calling back is a big problem, a lot of times they are just lazy. It sucks for setting up showings.
The real estate market is never in as bad shape as the media portrays it to be...ever. they make it sound like thinks are horrible...they're not great but in no way is it as bad a picture as they paint it to be.
(continued....apparently my 6485 character rant is too winded for the 4300 character max length on comments....go figure)
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timeasmymeasure
no subject
Date: 2010-03-04 11:25 pm (UTC)ALso, just because an agent puts the house on the MLS for 100,000 doesn't mean that is an approved price, they could get a full price offer and the mortgage company who has to sign off on it might say, that they want $150,000. The list price is just a suggestion from the listing agent not an absolute fact.
So looking at short sales is kind of a waste of time, yes in theory they are great because they save some poor sap from going into foreclosure or maybe bales them out of a bad mortgage they got into...but just because you see that little price there doesn't mean that is what it will sell for.
The other problem with a short sale is that "sale price may be insufficient to pay the total of all liens and costs of sale and the owner(s) of record may not be able to bring sufficient liquid assets to the closing to cure all deficiencies" which basically says that just because the bank agrees to maybe let you purchase that house for $100,000 it does not guarantee that you will get a clear title so you might find yourself with back owed taxes, liens and judgements against the property that you are responsible to clear up not the previous buyer or the bank!
Okay...enough bitching about the price...now onto the banks....when you put an offer in on a short sale and the homeowner signs off on it THEN an entire package is sent to the bank...did I mention that nothing gets started on a short sale until there is an offer? Oh yeah..that sucks because the bank takes anywhere from a few days to a few MONTHS to process that package. So you can be sitting around twiddling your thumbs to just get an acknowledgement from the bank that your offer was received...unless the listing says "BANK APPROVED PRICE" then I wouldn't even waste my time. You will be waiting for 3-6 months to find out if they bank will even sell it to you. Since you are financing that makes it difficult because you can't really get your financing in order until you have a closing date and typically once the bank approves a price after making you wait for an eternity...they want to close by the end of the month...so that means you gotta throw together a loan that would normally take 30-45 days to process and get it done in 10 days...and then they'll want to up the price if you can't close that quick.
And don't even get me started if there are more than one mortgage on the property!
I guess to the commission part plays a part too...but any commission is a commission. what sucks is when agents do not list a short sale right. Typically the bank will negotiate the commission as part of the terms. On the MLS when an agent takes a listing they advertise what the agent who brings a buyer is paid. Most of the times its anywhere from 2-4% depending on who is selling the house, the price etc. But with a short sale just because it says you'll get 3% doesn't mean the bank won't try to negotiate it down. In Florida since we know this we'll put on the MLS 2% because we know we can usually get a 4% split no problem. But we'll start the bank with 7% and try to get it negotiated down to 5 or 6. Agents get cranky when they make less but never when they get an unexpected extra few points.
Listing agents not calling back is a big problem, a lot of times they are just lazy. It sucks for setting up showings.
The real estate market is never in as bad shape as the media portrays it to be...ever. they make it sound like thinks are horrible...they're not great but in no way is it as bad a picture as they paint it to be.
(continued....apparently my 6485 character rant is too winded for the 4300 character max length on comments....go figure)