Philadelphia Short Sale Paranoia

It seems like more and more these days buyers agents and consumers are afraid of short sales, and perhaps even terrified.  I think one of the main problems in Philadelphia is the lack of short sale education among real estate offices and the fact that short sales make up a small percentage of the transactions.  As a result, agents and consumers just hear about the "horror stories" so they either stay away or enter with extreme caution.

Recently, with several of our short sale listings, I will receive multiple calls a day from different buyer agents with a whole slew of questions starting out with "What is the deal with this short sale" "Who is the bank" "How are they to deal with?". Five minutes into the conversation, I am explaining the whole short sale process.   And then I am thinking "Geez, what are they telling the buyer?"...

At the end of the day, it is not really complicated.  Our closing ratio on short sale listings is 100 percent.  The only times they have not settled is when the buyers have flaked and then we have to sell the property again.  With one property, we had to sell the property 5 times, another 3 times.  With a current listing, 2 buyers have already backed out.

I am not sure what is up with this trend.  To me, there is something going on with the buyers agents and the consumers.  Not too long after they flake, we get another buyer, short sale approval and go to settlement.  That is why it is extremely important to have the most committed buyer to be in the deal from the beginning.  It takes too long to get a short sale approval and way too much work to have a flaky buyer.

Here are some tips with our short sale listings:

• You can be confident that short sale approval will be reached by our past history.
• We do not use an attorney that passes any additional costs onto the buyer.
• Do not submit a contract where inspections and mortgage process starts after short sale approval.
• Settlement will take 90 to 120 days and perhaps longer (overpromise and underdeliver)

Yes, there is risk with a short sale listing for a buyer and a buyers agent.  But with the risk comes the substantial reward of being able to procure a property below market value.

And with what I have seen to date, I would strongly encourage all brokerage offices to increase their efforts on short sale training internally and encourage their agents to go to GPAR when short sale training is offered.   And be extremely careful with the fraud that can occur with agents, short sales and consumers.  For example, recently a Center City real estate office had the FBI investigating them.  As a result, their office closed temporarily due to a fraudulent short sale flop.

At REMAX, we are the leaders in CDPEs (Certified Distressed Property Experts).

The more offices and agents that are better versed in Philadelphia short sales, the better consumers will be served.

And of course, as always, if you are a seller in need of doing a short sale, contact us.