The Big Bad Wolf of Short Sales

The Big Bad Wolf of Short Sales

Would you let a wolf guard your sheep or count on a trained and loyal sheep dog?

This is what a lot of homeowners are doing when they allow an investor to sell and negotiate their short sales. They are called investors because they want to make money on the deal. In my opinion, this is perfectly ok! We live in America! But I, as the home owner, would not want them to make their money on me!

Here's an example: One of my clients received a call from an investor the other day explaining to them that they would buy the home and resell it and not charge any Realtor fees. This sounds great, but here is the truth: The investor will try to get the home at a discount so he can resell at a profit. Depending on the homeowner's situation, this could harm the client. Secondly, 90% of all short sales are not good investor’s purchases, unless the property is in major disrepair. The investor tries to get such a low price for the home that the banks will never take the deal and the home usually goes to foreclosure.

This is my advice - Find a real estate agent that is an expert in short sales. Remember the buzz word in the real estate community right now is "expert short sale agent", so everyone is claiming to be an expert. Here are two very important questions to ask an agent before you list your home with them: How many short sales have you successfully closed on the listing side? If the answer is below 50, I would keep looking. Secondly - Who does the negotiating? If the agent says that they do, be very careful, because they better have a team behind them doing everything else because short sales are very labor intensive. I don’t believe you can be an expert and not have a staff behind you. My team has successfully completed hundreds of short sale negotiations and we learn something every day.

There are times that investor purchases make good sense. If the property is in bad shape, if the seller's main goal is to stay in the house as long as possible, or the sellers of the home are going to or have filed bankruptcy. In some cases it does not matter what the home sells for, so investor low price purchases are fine. But in most cases, find a real estate agent that is a true expert.

Written by Nick Shivers