Banks fall short in short-sale transactions
Letters to the Editor
By Inman News, Monday, April 28, 2008.Bookmarking Sites
Re: 'Industry reacts to short-sale rule changes' (April 28)
Dear Editor:
The problem is that there are no rules, and banks are not held to any standards that Realtors or brokers are held to.
I have a number of short-sale listings. The banks tell you that they don't want to talk to you until you have an offer. At that point they want to see a letter of financial hardship, pay stubs, listing contract, broker's price opinion, seller's net sheet and an offer.
Then, it takes up to 10 weeks to even get a response from a lender. Banks rarely let you know in advance what they will accept or not. There is never one person who follows a file to get it done -- it is a pool of people who have access to notes, but it seems like zero responsibility to get it done.
There needs to be a meeting of the rules between banks and real estate agents regarding how we can get these transactions done without destroying the market.
Mary Jo Quay
Realtor
Counselor Realty
Edina, Minn.
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Submitted by Rich Johnson on April 30, 2008 - 5:13pm.
My challenge with short sales being listed in the MLS is that most agents list these homes at prices that have no relationship to what is owned but simply at a price that gets a Buyer lick'n his / her chops thinking that they are going to make a killing at someone else's expense ie: either the Bank's or the owner who is about to lose the property anyway. It results in an offer being written below the list price which 9 times out of 10 is already well below the price at which all mortgages / liens / brokerage fees would be taken care of. It's no small wonder then that the offer sits on a banker's desk for weeks without a response.
My feeling is that minimally a requirement of the MLS should be that the amount owned on the house or the amount required for everyone be paid at closing should be noted in at least the agent remarks section of the listing. If this were done, Buyers & their agents would have a better idea if their offers would be addressed or sit on the corner of a desk belonging to a person whose sole responsibility is to answer an 800 line because the offer was written at a price that was based on an unrealistic list price originally.
There is a problem with here but my feeling is that the real estate industry has brought it on themselves.
Rich Johnson
360-319-3267
http://www.johnsonteamrealestate.com
http://www.johnsonteamrealestate.com/blog/
Submitted by Joellen Chappell on May 5, 2008 - 11:35am.
Rich - Are you kidding me? The whole purpose of a short sale is that the Bank is NOT going to receive the entire balance of the existing loan and fees.
We have had much more success with short sales in the last quarter than all of last year. Persistence by the listing agent is a key ingredient. We have closed in as little as 35 days.
A buyer and their agent can determine the market value of the home just as easily as the bank can and decide what is a good offer. Most people just want to own their own home, not "make a killing".
If you are working with a listing agent that is not diligent, persistent and knowledgeable then you are not going to get anywhere. Same holds true if the seller is not cooperative and motivated to complete the short sale. Lots of variables, but the bottom line is: a professional Realtor has a good chance of accomplishing this for their seller.
If by the "real estate industry" you are including the loan companies, loan agents, mortgage brokers, securities dealers, etc. then you're right. We did bring it on ourselves.
Joellen Chappell, Broker
jchappell@c21mm.com