We have a laundry list of questions that we ask a lisitng agent and/or the sellers short sale processor before we show a property. There are particular things we look for to gauge the level of experience to be able to property consult with our buyers.
My buyer specialist is working with a buyer and one particular short sale that meets his criteria has in the realtor remarks to call listing agent for specific instructions. Listing agent is brand new, has never sold anything and is using a 3rd party to process the short sale who also has never done a short sale. Two big red flags but the bank that has to approve the short sale, Regions, is pretty good to deal with so that will help. We called for the special instructions and they were that the third party will not accept any offer less than list price. Yes, I said the Third Party negotiator said that they will not accept any offer less than list price. Since when does anyone other than the seller decide on what offer to take? Keep in mind that this is the first offer, there have not been any offers and there has not been any communication with the sellers lender; otherwise I could accept the fact that the bank may have a NET amount that hthey require. Not in this case though.
I think my buyer decided to pass on this one, too may red flags. I also think the listing agent is in for a tough one here, especially being brand new and not knowing any better. Maybe I shoudl invite him to this site :)
Do others also interview the listing agent?
**********************************
like buttons
Replies
Ha-ha..run Forest run!!
If my buyers are ever interested in short sales, they get a quick education from me as to the potential "pitfalls" of this type of transaction, and secondly, if they want to put an offer on a short sale, I absolutely "interview" the listing agent as to their experience. Even doing so isn't always sucessful. The last short sale I brought a buyer into (YES, I did the "interview"!), I ended up negotiating the deal! HUGE pain in the butt, but I wasn't about to allow the deal to fizzle due to incompetance, etc., especially not with a buyer I have been working close to a year with! In this lovely world of short sales, and basically the distressed marketplace as a whole, it is all about being prepared..for anything, and being willing to put forth the effort to GET IT DONE!
Jeff,
The interview with the listing agent is just as important to me, as the interview with the buyer before we enter into a short sale purchase. Expectations are everything.
When I teach a class these are the questions I give the agents to use.
Listing Agent Interview Questions:
1. Is the listing still available?
Ask this question first to quickly eliminate the properties that you should not be considering.
2. Do you have any offers on the property?
Some agents collect offers and send them to the lender. This is typically a sign of an inexperienced agent and is critical information for you and your buyer.
3. Have any offers been executed and submitted?
If more than one offer has been submitted-or an offer has been executed-it is recommended you move on to another property where your buyer will be in first position.
4. How many contracts will you be submitting to the lender(s)?
In Florida as in the rest of the country, you need to work with an agent who is only submitting one contract on a property and will commit to closing with your buyer if possible.
5. What is the seller's hardship?
The reality is that the seller's agent does not need to share the hardship with you. However, confirming that the agent understands a hardship is necessary ensures you are dealing with an agent who understands the basics of a short sale.
6. Is the seller insolvent?
Does the seller have a monthly income shortfall? This is another question that will show whether the seller's agent understands the basics.
7. Have you reviewed the seller's financials?
If the agent has not reviewed financials, then chances are -they have not qualified their seller. The reality is the deal may still close; however, adequate qualification cannot be done without a detailed financial review. Not every homeowner qualifies to do a Short Sale.
8. In what stage of foreclosure is the seller/property?
The agent should understand where a seller is in the foreclosure process. If you are close to a bank sale, then understand you have a low likelihood of closing if an extension is not issued, - it is recommended you move on to another property.
9. Who is/are the lender(s)?
The agent should know this as part of the qualification process for the seller. If the agent does not know this, it could be an indication of inexperience.
10. Have you verified the parties on the mortgage and the deed?
This will indicate if the agent has identified the true owners of the property. In today's real estate climate, deeds are signed and property ownership can change without a true closing.
11. How many Short Sales have you successfully completed in the last 3 months?
If this is their first or if they don’t have at least 5 - it is recommended you move on to another property. You can also check their stats on the MLS.
12. Who is negotiating the Short Sale?
You need to know if they will be trying to charge you 3rd party fees. It is illegal now to charge the buyer 3rd party fees. If the agent says they are negotiating the short sale, ask if they are S.A.F.E. Act compliant. If they do not know what the SAFE act is. Move on and find another property. (Especially after Jan 1st 2011)
13. Have you had any discussions with the bank or have you submitted any paperwork as yet?
Some agents send paperwork to the lender(s) early, this is typically a sign of an experienced agent.
Final thoughts
• Complete and check contract: no blanks, realistic timeline, all addendums and disclosures.
• Qualify that the other agent is certified/knowledgeable or will let you assist and contribute.
• Make sure listing agent understands or agrees with the significance of turning in one contract
• Remain in constant contact with listing agent; offer your expertise and services.
• If you have a CASH buyer submit offer with copy of bank statement with clients name on it.
• For a mortgage buyer, make sure you get a new pre-approval, the bank wants them current.
Jeff I will probably add yours also.
Hello Paul, great list of questions, but I am left with a question... #12, can you tell me where you found this information regarding how "it is illegal to charge the buyer 3rd party fees"?
Also, with FHA, HAFA and BofA's COOP, you actually want to start the short sale prior to a contract with the lender to have in hand the eligibility, then once a contract comes in, it's just a few short days/weeks to full approval letter. So in that case it wouldn't necessarily reflect inexperience but rather experience to expedite the process. Looking forward to hearing from you about the 3rd party fees. thanks!
Kristi
xxx
LOL..Jeff, I would have asked the list agent if you could take over negotiations to protect your buyer....ok, ok, I know, unrealistic, but you could offer this seller a much better shot than the team they have in place. Unless they had some type of verbal from Regions, then not accepting anything below list screams flip to me. I bet there is an investor in negotiating, which SHOULD have been disclosed to you. Who knows? I think your buyer moving on is the right thing. Otherwise I would have pressed them further about this deal.
Smitty, I have taken over the short sale for a few listing agents but I hate to do it because the few that I did, the seller had no idea how it was supposed to work.
I also thought this was a flip but honestly I can not see how the bank would approve the sale even at the current list price, actually it is listed about 25% below what I believe it will appraise for.
ABSOLUTELY! When I show a Buyer Short Sales, I sit them down before we head out and examine the "back story" for each home. I too know most of the List Agents experienced with Short Sales. If they are using a Negotiator, I find out who it is..some are NOT going to be able to do it well. I will not put my Buyers through the frustration if they are not FULLY educated about what they are in for. The Short Sale List Agent is the KEY to a close!
What would an Agent hire a third party who has never done a Short Sale??
-
1
-
2
of 2 Next