For the last couple of years or so, the new terms “short-sale”, “pre-foreclosure”, “bank-owned” have become very familiar to any active realtor.
Yes, there are courses and classes and conferences to make us aware of the opportunities of this new sector in real estate. And I am continuously receiving emails offering leads on foreclosures and short sales and “BPO’s”.
I have been involved in a few short sales and I even lend occasionally advice to people who ask me what I know about the subject. The fact is that there is not so much to explain about it. It’s just a logical way that a lender can use to handle bad or problem-loans and cut its losses.
So far so good. However, every time I get involved in a short sale or “pre-foreclosure” deal, the bizarre takes over the rational, and weirdness supersedes common sense. Let me explain why I think so:
1) There are some conventions in how we usually handle a real estate sale in the US. Usually we list a property when a seller designates us as his “listing agent” and we place it on the MLS. There are some requisites to do that. He must give us an exclusive right of sale; otherwise we wouldn’t put it on the system.
2) If we have a buyer looking for a property, we will search on the MLS system and establish a relationship with its “listing agent” by asking to show it to our buyer, or requesting additional information.
3) Once an offer is made, an answer is received within a short term, please visit:- https://whiteoutpedia.com/ https://titanmedicalstock.com/ CoGlassware.com justpersonalcare.com usually 2 or 3 days. It can be an acceptance, a counteroffer, or a rejection. A non-reply within the given term is considered a negative answer. Now let’s compare this to what a bank involved in a short sale, or foreclosure sale usually does:
A) After talking to his bank, the seller of the troubled property agrees with a real estate agent to list his condo for sale in the MLS. The agent will place a special clause in the listing, stating its special status as a short sale and its contingency to a bank’s approval.
B) When an offer is received, the bank sometimes requires that it must be accompanied by a loan approval or a proof of funding if it’s a cash offer.
C) The buyer’s agent will often find a clause in the listing, stating that no commission is guaranteed. It is known that banks do not like to pay co-operating brokers more than a 2.5% compared to the usual 3%, but even this is not guaranteed. You must accept whatever the bank will definitely wants to pay you. No discussion.
Do you think that this is the perfect way for the banks to attract the best and most motivated realtors? Work double for less money? Usually, in a buyers’ market, a smart seller often increases the commission, so buyers’ agents are motivated to give him some priority. But apparently, banks have discovered that they can dictate their conditions, nickel-and-dime us so that they can save a few pennies after sinking billions of dollars in dubious transactions. Naming a listing agent who lives 200 miles away from the property isn’t the smartest move either. But let’s not discuss their marketing skills. They must know what they are doing.