Not that I need it, but validation in always nice. This week I wrote about short sales in the Denver metro market. Today John Rebchook of the Rocky Mountain News follows with a good article discussing short sales along with quote from fellow real estate associates.
There are agents who make a living chasing the short sale and foreclosure markets. They of course are advocates of the process. Many others feel the opposite, short sales to them are a waste of time.
Jim Smith, owner of Golden Real Estate, had this to say about them this week in his online real estate column: “Having listed a short sale myself, I have experienced this colossal waste of time, and I’m no longer willing to list such homes.”
Smith said banks won’t tell you the amount they will accept until you bring them a “live” contract, and the deals usually fall apart because it takes such a long time to get an answer from the lender.
Lou Barnes, principal of Boulder West Financial, agrees. There are so few short sales being completed that they aren’t worth the effort, Barnes said.
“I was teaching a real estate class and I told my students that they would be better off doing their laundry than wasting their times on short sales,” Barnes said.
I believe the entire short sale process is congested with unrealistic bids on properties. True to the business, the bottom feeders come out, placing bids on properties that have no chance of ever getting accepted. Yet these bids are presented to the banks and gain a position on the desk of the short sale administrator.
What happens next takes forever. The time involved to get to the file often fends off real buyers. This sort of frustration causes a ripple effect that resonates through all parties in the transaction.
No body want to waste time, money and effort on a useless cause. It gives the industry a black eye.
What needs to happen with the banks is more efficient organization. A front-end traffic cop that looks at the file, knows the banks break-even, bottom line number and immediately sends the offers without a breath of hope packing.
Get the useless crappy offers off the desk!
By making sure only the bids that have hope and potential of getting accepted you loosen up the time restraints on the over-worked administrators. Giving them an opportunity to do focus on getting their job done will help the industry. It will save countless wasted hours, many disappointed buyers and send near-bankrupt and distressed homeowners away so they can rebuild their lives.
We need one thing right now.
That is consumer confidence.
May we have some Please?
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About the Author
Kristal Kraft
Kristal has been helping buyers and sellers in Colorado since 1984. She enjoys sharing her knowledge of the Metro Denver Real Estate market via blogging and in person while driving around the beautiful Rocky Mountain town of Denver! For fun, Kristal enjoys shooting things with a Canon. Visit Denver Photo Blog
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4 Comments
Kristal – Yes!The idea of wasting my time to send in a bottom feeder offer just to see what the bank’s bottom line actually is, is a great example of inefficiency in an already inefficient market – I just took a short sale class (reputable online one) where they teach listing agents we should be grateful for any offer because it will create a flushing out of the bank’s bottom.(can’t resist) What an insult to hardworking, skilled agents – and on top of it they’ll cut our fee.
Diane Kawells last blog post..February is Open Enrollment at TAF Academy in Federal Way
Diane ~ Your comment is representative of the general attitude of the bank people toward brokers. Sad but true. I would love to see their paycheck tied to their efficiency. Maybe their attitude and efficiency would improve for the benefit of all involved.
Banks handling of this mess is a good indicator as to why banks don’t need to get into the real estate business.
There is a new way to waste your time in my area – some agents are listing short sales, then turning the negotiation over to a “professional short sale negotiator.”
These short sale pros charge an average of $2500 (to dial the phone, sit on hold, re-fax the documents for the gazillionth time, etc.) Then the listing agent, who hasn’t had to do all that work puts right in the MLS agent comments “listing and selling agent to split outside short sale fee!”
And I am supposed to bring my qualified buyer to this house, take a decreased %, AND pay some outsider to do the listing agent’s job????? Give me a break!
Hi Vicki ~ We have had the same cottage industry cropping up here in Colorado. I’m hearing some of them are actually having success in shortening the time line to closing. Of course as agents we need to do our due diligence and confirm their successes. Here I would check with the title company to see if what the “professional short sale negotiators” is true.