Okay, by now everyone in Las Vegas should know pretty much what a short sale is and their purpose. If not, then you either live in an abandon mine or spend way too much time investigating alien activity at area 51. Here is my question. Why can't we, the real estate community establish some consistency with short sales? It seems as though there is some confusion as to how short sales are handeled by the real estate agents, by the banks, by the homeowner and by the buyer. I for one am hereby making a plea to the education committee at the Greater Las Vegas Association of Realtors to develope a program that educates agents on the proper way to sell, process and close short sales. This program should be added to the REQUIRED courses for new licensee's or to renew a real estate license. Yes, I am asking for more hours of education to be a requirement to better inform homeowners and buyers and for the betterment of our industry.
These are the various frustrations that my team and I am burdened with on a daily basis with short sales:
1. Why do some agents approach short sales the same way as bank repos? They let their seller think that it is handeled the same way. They allow the home to fall into disrepair, the utilities turned off, maintenance halted and the home abandoned. We have even had listing agents subject us to asking our buyers to sign a NRS 113 "as-is" waiver, once again, as if it's a bank repo.
2. Why do some agents not inform their sellers that they may have to sign a promissory note or make a cash contribution at the closing? It's beyond me why an agent would go to the extent of listing a property marketing it and spending countless hours submitting the short sale paperwork and negotiating on behalf of the seller, when the seller isn't willing to cooperate with doing what it takes to close the sale.
3. Why don't some agents inform their seller of the disadvantages of not making the HOA payments? The liens, the outrageous late fees, attorney fees, ect, which could hinder the sale closing.
4. Why do some agents tell their sellers that they don't need to make any repairs to the home while it's on the market or in escrow? It's still their home, yet they expect the buyer to be repsosible for anything that happens while it's on the market and in escrow.
5. Why do some agents expect their buyers to get an offer accepted and NOT open escrow until the bank approves the short sale, oh and NOT supply any earnest money or something just as offensive like $250. earnest money, until the bank approves the short sale. Oh and they will only commit to this property, via the short sale addendum, for 30 days. Ya, because that's all it usually takes to get a short sale approved.
Those are just some of the frustrations. It used to be that the main frustration of short sales was dealing with the banks and their inconsistent processing procedures and the incompetent or poorly trained processors and negotiators.
Now, it seems most of our issues are because of misinformed, undertrained agents or agents that have their own agenda, like trying to over protect their seller. They inform them that they don't have to do any repairs, they can turn off the utilities and then expect the buyer to get the utilities turned on BEFORE they even own the property, just to do their inspection to see if they still want the home!
It's my opinion that short sales should be handeled just like NORMAL sales with the exception of third party approval.
Look, 99% of the time the bank is going to accept the short sale if it's submitted properly and you've done your homework on the value and your buyer dosn't expect to get the home for 25% below comps or something. So, they are willing to let the homeowner out of their obligation to the debt that they signed their name to for substantially less than they promised to pay. Granted, the lender can pursue them for the deficiency and in some cases they will, but myself and most of the agents I talk to on a daily basis have seen very little deficiency judgements being awarded. I myself and a good number of agents are also getting the banks to waive their right to a deficiency judgement on several of our sales.
But, since the bank is willing to do that, and they most certainly don't HAVE to, you would think that the homeowner would be willing to take care of the home, pay all of the other bills and make any necessary repairs to the home during the process-like a NORMAL sale.
Please inform your sellers that this should and hopefully will be the standard. Think about it...the banks will appreciate it because they will be able to get more for the home if it is maintained and in good condition-not abandoned, they might as well foreclose on it then. The homeowners should feel better morally about leaving the home in good condition for the new owner. The agents don't have to worry about the home being neglected and falling apart while it's in escrow and subsequently falling out of escrow because of that.
It's a win win situation.
I for one am hereby committing my self and my team to these standards for all of my short sales, or I will turn the listing down, Period!
My sellers will be informed that they may have to sign a promissory note and they are prepared to do so if reasonable.
My sellers will maintain the home and make the necessary repairs to the home once the inspection is complete up to the close of escrow.
My sellers will pay their HOA dues and keep their utilities on in THEIR name.
My sellers will comply with all necessary documents that the bank requires to procure a successful short sale.
My sellers will fill out all disclosures for the buyer and will never require a NRS113.
I will keep the selling agent informed every step of the way on all progress and or delays.
I may only end up with two listings, but you can count on me to maintain those standards on my two listings.
I hope my fellow agents will adopt these standards as well.