As an Agent who frequently handles Short Sales in Southern New Hampshire and Northern Massachusetts, I have received more than my share of phone calls from panicked homeowners looking to stop an imminent foreclosure. In one such instance not that long ago I had to tell prospective clients that pretty much everything they had been told about real estate in general and short sales, in particular, by the previous real estate agent they had been talking to was incorrect.
This veritable fountain of misinformation had told them, among other things, that:
1. It shouldn’t take long to sell their condo. (The condo market in their area is, as they say, “deader than a doornail”.)
2. They should be able to sell it for what they paid for it. (they bought in 2006 for heaven’s sake – can you say “underwater”.)
3. It should take no more than a couple of weeks to get a short sale approved, if indeed, a short sale was necessary. After all, in his estimation, they were going to be able to sell their property for what they paid for it. Apparently in his world, if they could sell their property for what they paid for it, all other fees and costs associated with the sale (including the six months of unpaid mortgage payments) just go away without having to have any kind of short sale approval. I wish I lived in that world…don’t you?
4. Another gem involved a complete misinterpretation of the Service Members Civil Relief Act. The SCRA, if you’re not familiar with it, basically says, “Hey, let’s not thank the people out there defending our country by foreclosing on them while they’re on active duty”. A great idea I grant you but it has absolutely nothing to do with these homeowners, neither of whom has ever been in the Service. Among the paperwork sent when one is being foreclosed upon is a notice to appear in court by a certain date if you are eligible for, and wish to invoke, the protection of this Act. Somehow he read this form and came up with the idea that all they had to do was show up in court with a listing agreement by a certain date and the foreclosure would be stopped.
I swear, I am not making this up!!!
Fortunately for these homeowners, I was able to stop the foreclosure (yes, even without an offer). We were then able to list the property and I was able to successfully facilitate the short sale!
So, what are some of the things you should watch out for when hiring a real estate agent to market your property and facilitate a short sale?
Here are three important things to look for.
1. A good agent should be proficient in accurately pricing properties. If an agent shows up with a “CMA” (Comparative Market Analysis) that consists of 27 pages of marketing fluff, an MLS generated list of every property in town that even vaguely resembles yours (i.e., it has a roof, at least four exterior walls and a front door), capped off by a $20,000 range in which your property might sell…show them quickly to the door. This person clearly has no idea how to establish market value. Properly establishing value is an absolute must to get any property sold today and it is critical in a short sale situation. Even if you are not in financial distress, incorrectly pricing your property to start with in today’s market will cause you to lose money in the end.
2. A good agent should be able to guide you through filling out the myriad forms that will be required by your lender. If the agent does not have a clear idea of the information you’ll have to provide and the paperwork you’ll have to fill out, indeed, if the agent does not bring a set with them…move on.
3. A good agent should be knowledgeable enough about the various lender short sale requirements to help you negotiate a solid, enforceable contract that has a good chance of being approved. If the agent thinks it’s a good idea to just push every contract that comes down the road over to your lender…walk away. If the agent thinks they have to submit every offer…run away. This agent doesn’t understand the difference between an REO (bank owned property) and a short sale.
If you need help with a Short Sale in Southern New Hampshire or Northern Massachusetts, call me at 603-490-5344 for a confidential consultation.