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The 5 Biggest Short Sale Mistakes a Realtor Should Not Make

Through processing over 450 short sales, I figured it would be worthwhile to share some of my experiences relating to the 5 Biggest Short Sale Mistakes a Realtor Should Not Make.

1.  Don’t Hire an Unqualified Professional to Facilitate or Negotiate with the Bank
I can’t even begin to tell you how many times our office has received a request to process a short sale which has been previously “worked” by another individual or entity.  When our office receives such a file the first thing we do is check on the status with the bank (after we receive proper authorization).  9 times out of 10 the most recent follow up on the file was greater than 30 days prior to our receipt of the file.  If a Seller is relying on a professional to work on the short sale, shouldn’t they be “working the short sale?”  To make matters worse, sometimes these professionals take money up-front to work the file.  Is this right?  Is this abusive to the distressed homeowner?Is this legal (In some states no it’s not legal)?

2.  Don’t Pay any Upfront Fees for Someone to Facilitate a Short Sale
This one is kinda’ sticky.  Notice how I use the word “Facilitate” which is dramatically different than “Negotiate”.  If you are looking for someone to Negotiate a short sale agreement for you, then you are more than likely going to use the services of any attorney (in Florida).  In this case, an attorney may require a retainer fee which is usually paid up front.  IN MY OPINION THIS IS FINE AND IT’S OK TO PAY AN ATTORNEY UP FRONT (check local laws to confirm).  In all other circumstances however, once the Facilitator (one who pushes papers and follows up with the lender) is paid to “work” the file, what incentive does he/she have to get the file closed?  In all of the transactions we have ever Facilitated we have never charged any upfront fees whatsoever.  If a deal does not close, we don’t get paid — it’s that simple.  The only party entitled to payment up front is an attorney if he is Negotiating and if he’s providing real value (i.e. – Staying a foreclosure or negotiating on a workout etc.).

3.  Not Being Proactive or Doing Nothing
If you don’t follow up on a consistent basis with the bank representative handling the short sale request, you will go nowhere V-E-R-Y S-L-O-W-L-Y.  You should follow up with the bank no less than one time per week and often times several times per week.

4.  Rolling Over and Taking No for an Answer
Over the past 3.5 years we have communicated with many of the major banks office of the President.  Why?  Because we received a “no” from the loss mitigation department regarding a short sale or the loss mitigation department stalled in reaching a decision.  In the spirit of reaching the top decision maker at the bank(s), we have reached out the the president’s office at:  Bank of America, Countrywide (when it was separate from B of A), Wells Fargo, Chevy Chase, National City (before PNC) and many others.  You’d be surprised how often we have gotten a bank to respond quicker and/or reverse a decision previously made.  This method is highly suggested but should be used sparingly and only when justified as you don’t want to be characterized as “the Boy who Cried Wolf.”

5.  Trusting the Other Agent
This is not meant to offend any Real Estate Professionals (only Real Estate “un” professionals).  It merely points out that the Agent (usually the Listing Agent) is trying to protect the interests of their respective client/customer without regard to the other side of the transaction.  Use caution when speaking with “the other side”.  Ask specific questions that don’t require a simple “yes/no” response.  When you are able, follow up with independent investigations relating to the Agent’s statements.  And most importantly, if the Agent gives you a timeline of when to expect an event to occur, CONTACT THE AGENT TO FOLLOW UP THE DAY AFTER THE EXPRESSED TIME FRAME.

While I like to keep my postings on the short side (no pun intended) there are several additional Short Sale Mistakes a Realtor Should Not Make. I’ll review those in future postings.

Rick Schuster

Licensed Real Estate Broker – 

Jaycee Realty, Inc.
Licensed Title Insurance Agent – Home Guardian Title, Inc.
Licensed Mortgage Broker – Leading Edge Mortgage Corp
20283 State Road 7 – Ste 400
Boca Raton, FL 33498

561-206-2835 – via Google Voice
561-988-2546 -Fax

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