Just yesterday, one of my agent-owners called me because she was a little confused as to whether the listing she was showing to her 
buyer was A Short Sale or Not.
Let me give you a little background here. My agent-owner has a listing that went under contract yesterday to close within 45 days. This seller is single and has 3 children. My agent-owner had been showing this seller homes to purchase after the closing on her current home.
The owner of our listing (our client) now becomes a buyer client. This buyer client settled on a home she really likes -- the home is listed for $248,900 - there is a mortgage for $310,000. The MLS said that this was a "possible short sale".
When our agent-owner called the listing agent about whether it was a short sale or not, the listing agent said "No, it is not a short sale - just write a normal contract" Also, the listing agent said the closing date would have to be 90 days away and that the seller would rent to the potential buyer until it closed in 90 days at a rate that was acceptable to the buyer client.
My agent-owner called me for advice -- you see, she had never done a short sale (and she is smart enough to know when you needs help) -- as she told me about the scenario, I said that it certainly sounded like a short sale --listing agent said not to put the contingency on bank approval because the seller was just going to bring a check to closing for the shortage.
Still didn't sound right to me, so I had my agent-owner call listing
agent again and ask if it weren't a short sale,
why the long wait for closing. The answer from the listing agent was "the seller does not have the money for the shortage, so he needs time to negotiate with the bank on the difference. He is going to need 90 days to get the bank to work with him.
Now, I ask you --- how is this not a short sale -- a short sale or not?
My agent-owner, her buyer client and I did a conference call so that I could explain what happens with a short sale and unless she was willing to move twice, she should stay away from a short sale. I explained that the contract would certainly have to be contingent upon the bank's approval -- she wants to move once and close on a new house immediately after closing her current home. She is willing to rent the new home until closing if she can be guaranteed that this will happen.
Recently, I have written 2 posts regarding mortgage fraud -- pointing the finger at loan officers:
To get a loan closed - no matter what
Can You Do What A Loan Officer tells you?
So, today, I'm pointing fingers at real estate sales associates -- A short sale or not? If you disagree with me, I would love to hear your reasoning.
Broker, SC Certified Trainer, Relocation Director
Co-founder of AgentOwned Realty
Liz@AgentOwned.com
843-725-5007
The AgentOwned Realty serves your real estate needs for:
Isle of Palms, Sullivan's Island, Daniel Island, North Charleston,
Summerville,Goose Creek, Moncks Corner, Santee, Manning, Sumter, Florence, & Myrtle Beach, all in South Carolina
Hi Liz, If it walks like a duck... Not sure why the other agent is playing with semantics here but you gave your client all she needed to know ! Well done.
I agree with Bill....QUACK QUACK QUACK. Who do they think they are fooling?
It's a duck and a short sale! Unless, let me throw this in, the seller is trying to get the bank to agree to the short and if not then would bring the cash to the table. But wait it was stated the seller doesn't have the extra cash. Yeppers, it is a short sale. Tell your buyer to DUCK.
If the Seller is accepting an offer for less than what is owed on the mortgage and the Seller does not have the funds to make up the shortfall, then that is certainly not a "possible" short sale. It IS a short sale. I find it very difficult to believe that the Seller is going to come up with over $60k to make up the shortfall in 90 days. There are a few "quacks" associated with this listing, if you know what I mean.
It's a quaker short sale. I'll never understand why people aren't straightforward to start with.
Sounds like a short sale to me. Why the deception? We all know why it wasn't marketed that way, but it is these types of practices from all involved in our industry that need to stop. Thanks for the post.
Please take the arrow out of your head. I have the duck now!
Newbie in AgentOwned Realty Company with Liz
Sounds like a short sale to me....and one that hasn't been negotiatied yet. I hope the list agent isn't "using" this buyer to get their negotiated price from the lender. Sounds fishy to me....hmmm
susan m weeks
the agentowned realty company/charleston, sc
Because our area isn't hard hit many agents don't know how to handle a short sale. I don't work them either and don't want too. I dont even show them.
If that seller at the time could have actually come up with the cash to close, then I wouldn't have listed it as a short sale either. But, since they couldn't and they are now having to negotiate with the bank, then it is a short sale.
I am certainly no short sale expert by any stretch of the imagination, but I would have to that this sounds a lot like one to me. I don't know why the other agent isn't owning up to it.
I would say on the surface yes it is a short sale. Then I recall a situation I remember hearing where the sellers didn't want to take a short sale but negotiated with the bank to obtain financing on the shortage. It might be a situation like that, but surely the listing agent should have explained it as such.
Bill --- Thanks for stopping by and your supportive comments
Mama Liz
Cindy --- yes, I agree --- thanks so much for stopping by.
Mama Liz
Dixie & Dick --- I agree --- thanks for stopping by -- BTW, the buyer did walk away.
Mama Liz
Judy ---- yes, I know what you mean --it is hard to believe that a very experienced listing agent would act like this.
Mama Liz
Irene --- me either --- really baffles me, especially since the listing agent is very experienced.
Mama Liz
Kyle --- I couldn't agree with you more --- thanks for stopping by.
Mama Liz
Lisa ---OK -- I'll take the arrow out --- thanks for stopping by.
Mama Liz
Susan --- thanks for stopping by ---think you are right -- sounds fishy.
Mama Liz
Laura --- of course, I think you are smart -- if you are not going to learn about them, you shouldn't get involved.
Mama Liz
Todd ---it is hard to believe that the experienced listing agent acted this way -- of course, it is a short sale.
Mama Liz
JL --- it rather amazing that the very experienced listing agent is acting this way --- our buyer walked away, thank goodness.
Mama Liz
Kim --- this very experienced listing agent seems not to have a clue about short sales.
Mama Liz