I started doing short sales in 2007. The majority of agents in the area didn't want to touch those very time consuming deals. After 5 years some agents realize that short sale are here to stay and decided to catch up and now are listing short sales. Some of them are perfect capable of doing a short sale while others just don't have the personality that it takes to get a short sale done, in case something comes up and you know, very often it happens...
I was showing short sales for a buyer the other day and there were 4 houses that the listing agent has been strugling to get a deal done for over a year. One for over 2 years! There was nothing wrong with the houses since everything sells for the right price. With short sales we all know that it takes a little bit more than the right price, but the right procedures. The problem were the listing agents. There is one agent in my area who told me that he lists short sales because of the calls he gets from the buyers, not because he is thinking of closing those deals. This is so unprofessional and yet brokers are not paying attention to this.
I have noticed some brokers who will request their agents to offer just $1 comission. LOL...!!! Their attorneys tell them to do so.... hellooooo... a short sale is subject to bank approval... If the bank doesnt approve the comission, no sale, so why are they so afraid to offer the regular comission? Because they feel insecure about short sales. But most brokers/managers are not afraid to let their agents who can't close a deal to list short sales.
Do you think that sellers who ends up in foreclosure should make those brokers accountable? Do you know if this is already happening?
I am talking about those agents who can never close a short sale not those who eventually are not able to do so since sometimes it just gets out of our control although it is getting better and better with the banks. ....
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Not sure if you can do this in all states but as a 3rd party negotiator, many of my Realtors write in the additional terms "South Florida Title Insurers to negotiate and close the transaction". Since negotiating it yourself as a buyer's agent is a conflict of interest with the banks, this may provide you a successful alternative. Plus, after several rounds of unsuccessful closings, the listing agent may see this as a welcomed opportunity.
That's a very good question. I would think so. It's the same if the agent constantly makes mistakes, such as not advising the buyer to get a home inspection or whatever. I would think that any broker worth their wait will look at the agent activity to better assist them and protect them from liability.
In regards to the co-broke, I don't understand the logic behind the advice given other than making a nice commission structure for the listing broker!
"hellooooo... a short sale is subject to bank approval... If the bank doesnt approve the comission, no sale, so why are they so afraid to offer the regular comission? "
This statement is not true. The bank is merely a contingency. If one of the seller terms, such as commissions, are not favorable to the seller, then the seller can decide to either make up the difference, put that cost upon the buyer or just don't agree with the terms. The bank does not have the final say on listing broker commissions.
Saddly, some short sellers list with whoever, with no regard to their past history of closing the sales. I'd say the best we can do when representing buyers looking at short sales is to review the listing agent's history before suggesting that our clients write an offer.
If a house has three liens, four months to foreclosure and an agent that's never closed a short sale (but is now a self-proclaimed "distressed property expert") I think it is on us as buyer's agents to uncover the facts and advise our clients to find a different house.
If ridiculous co-ops become a problem in your area, it is time to start using a buyers' brokerage agreement. That way you have standing to say, the seller's agent is only putting in $X as commission, our agreement states $Y, so with your offer, I'd suggest that you request $Y be paid out as commission, otherwise this will end up on your closing costs. As soon as those agents have to present an offer like that, they are going to be asked some very uncomfortable questions by their clients.
Jim, that is exactly what I do before showing the houses. I tell my buyer that this agent was never able to close a short sale but sometimes they insist to see "that" house.... I also call those agents to make questions and some tell me that they have close many short sales...then I go to the MLS to find out that they never closed as listing agent any short sales. They don't know any realtor can check other realtor's performance on the MLS..
On the 1 dollar comission I always put in the offer: buyer requests seller to pay 2.5% comission to the buyer's agent. Although most short sales are paying 6%...
"On the 1 dollar comission I always put in the offer: buyer requests seller to pay 2.5% comission to the buyer's agent. Although most short sales are paying 6%... "
We can't do that here in California. We can approach the listing broker before placing an offer to see if they are willing to adjust their commissions, but we cannot make the co-broke a part of the purchase offer.