L high res 40percent

Rachel LaMar, J.D.
Broker, Attorney, Owner
LaMar Real Estate
Rachel@LaMarRealEstate.org
Cellular 760-310-9466
CA BRE# 01399682

blog-logo
rachel

News, Views and Opinions on Real Estate, Law and the North San Diego Community

blog-logo
rachel
L high res

Rachel LaMar, J.D.
Broker, Attorney, Owner
LaMar Real Estate
Rachel@LaMarRealEstate.org
Cellular 760-310-9466
CA BRE# 01399682

News, Views and Opinions on Real Estate, Law and the North San Diego Community

Why Short Sales Fail

Not all short sales get approved; in fact, some statistics claim only half make it to closing. The truth is that both the agent and seller need to do everything in their power to get these sales approved, but sometimes it is simply out of their hands. Here are the reasons short sales fail:

1.  Incomplete paperwork. A short sale agent needs to know what paperwork to get to the lender. Oftentimes paperwork is needed before the home is even listed, and this is lender-dependant. Bank of America, for example, has a new program where they evaluate short sales before listing, and TELL the agent where the price needs to be. An agent must be aware of this before placing a listing on the MLS. Different lenders also require different paperwork, and paperwork may vary depending on whether the loan is a first or subsequent lien. Make sure your agent knows what is needed, and complete all the paperwork on time – this is the easiest problem to fix, and the one over which we have the most control.

2.  Under-skilled agents. If you are facing a short sale, you’d better make sure you have a competent agent who understands all the steps involved, and can communicate (and knows when to do so) with the lender. Many agents claim they are short sale experts, but taking a one or two day class does not make them experts – much of this comes from experience.

3.  Lack of communication. This is where the listing agent, although skilled in working with negotiators, is not on top of the transaction and is not communicating with negotiators properly, or frequently enough. This can happen whether or not the agent is skilled with short sale transactions. If the agent is too busy, there are plenty of highly trained and successful negotiators that can negotiate with the lenders on behalf of the agents, and the agent pays them from his/her commission.

4.  Bank negotiators who are under-skilled, uncommunicative, and/or just don’t care. This is the number one reason I personally think short sales fail. Oftentimes an agent will encounter bank representatives who don’t have the skills to do their job (I have had people quote me incorrect law -let’s just say they received a lesson); some of these people either don’t know how to communicate, or simply choose not to (obviously not caring about all the lives their actions effect). Recently, I have been involved with a short sale in which the bank negotiator did not return calls or emails. It was impossible to communicate with her, and then she simply closed the file! The lenders need to hire skilled people, train them, and constantly evaluate them. These people work in CUSTOMER SERVICE! Do these lenders not understand the meaning of this (this is a topic for a blog in itself, and it wouldn’t be a nice one).

According to an article in California Real Estate Magazine, a JD Power and Associates recent study found that 77% of California Realtors found recent short sale transactions to be either “difficult” or “extremely difficult.” This number is up from the last survey, almost a year ago, which was at 70%. Furthermore, the same study reported that 75% of Realtors were not satisfied with lenders they worked with in their most recent short sale transactions. Consumer satisfaction with primary mortgage servicers was ranked at 718 on a 1,000 point scale. This is crazy!

Lenders: I feel like I have been shouting at you for so long…many people have. Why are you not listening? What will it take to make you hear us? You hold the cards to housing market recovery, yet you choose not to care. You have created a country of bank-haters, people no longer trust you. Financial markets teeter on the brink of disaster, and yet you still follow the same practices. Why? Can anyone help me to understand this? Let’s hope these lenders listen before it’s too late.

Share

Leave a Comment