A short sale is one real estate transaction where the homeowner and the buyer really need to get help from an experienced agent or attorney. Unfortunately, many home sellers, in their quest to find a Realtor® they can trust, automatically turn to a friend who holds a real estate license, or ask friends, family and/or coworkers for a referral to an agent.
Going through a short sale without an expert support team is a formula for failure. Not all real estate agents know how to handle a short sale successfully. How does a distressed homeowner choose the correct support team?
- Ask for experience. How many short sales have they successfully completed?
- What special training do they have and is that recognized by short sale lenders?
- What extraordinary additional support will your team bring you?
The answers to these questions will begin to clearly separate one agent from another. So, make sure you hire the services of a Realtor® who can demonstrate special training and has a good track record with short sales. I recommend that you look for an agent who is a Certified Distressed Property Expert (CDPE) or an agent with the Short Sales and Foreclosure (SFR) certification.
I realize that all real estate agents have to start somewhere, however, when someone is facing foreclosure it is not the time to hire an agent with little or no experience. There are too many things that can go wrong in a short sale transaction, therefore, the level of complexity it high.
The buyer’s agent in a short sale has practically very little involvement in the short sale process because the buyer’s agent can’t negotiate with the seller’s lender or the homeowner’s association. However, the buyer’s agent comes in handy at the inception of the offer, when negotiating to protect the best interest of the buyer is crucial. For example, I just finished a complicated luxury short sale where the agent representing the buyer was very cooperative. His business acumen allowed us to work as a team for the best interest of our mutual clients. And, yes, there were times we disagreed; but, in the end we were working with the best interest of all parties involved.
I strongly believe that the agent best equipped to handle a short sale buyer is an agent who understands the listing side of the short sale transaction; because in the end, the buyer’s agent keeps the buyer in the loop.
Here are some of the things that an experienced short sale agent will know to do for the buyer.
- Find out whether there are two loans on the short sale and identify the lenders.
- Some lenders have a track record of verifying the offer by having an auction process. The buyer’s agent would know how to work with the buyer to guarantee the buyer gets the property.
- Talk to the listing agent and ask whether the agent is negotiating the short sale or if it will be farmed out to a third-party vendor, which could be a title company or a law firm. I personally prefer to work with a lawyer because if the foreclosure process is advanced, a judicial sale date may have to be postponed.
- Eliminate the competition and reduce the chances that the seller will send multiple offers to the bank.
- Determine the listing agent’s experience level. If the listing agent hasn’t successfully closed many short sales, that could be a potential problem.
Agents who list and sell a lot of short sales can easily identify these elements for a buyer.
Norka Parodi is a member of the Institute for Luxury Home Marketing and is a Broker/Realtor®, with CDPE, CIAS, LMC, GRI, TRC designations
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