As the ongoing financial crisis continues across the country, signs of foreclosure become more prominent. Agents from every section of the country are in large part chasing the curve. Rather than work for a solution, we are part of the problem. Signs like this do not mean short sale. Signs like this do not mean bank owned. Signs like this only mean that someone paid a printer for the sign and slapped it in front of a home that is for sale.
There are loosely written rules regarding what is a short sale. Ask any group of real estate agents and you will get various answers that all will have a semblance of the truth. Actually, no one has truly defined a short sale from a legal perspective. None of us are following consistent rulesbecause none exist. The NAR is busy telling everyone that the purchase of a home is a great investment and they are overlooking signs like the one above and the impact that all these foreclosures have on the public.
The public is depending on us to guide them through the morass of bad newsand the NAR has their focus on some Pollyanna’s version of life in the big city.
We need rules people. We need some sort of standards so that we are all operating on the same page. The liberal thought of a short sale is “the sale of a home for less than is owed on the property. The sale must be approved by those holding liens on the property.” Sounds clear, but it is not clear enough.
Yes, the home is being offered for less than is owed. Yes, the lien holder must approve the sale. The devil is in the details. Lien holder approval for the attempt should be required before it is put on the market. No if’s, no and’s and no but’s.
The haphazard method in which listings are allowed to appear in various MLS systems across the country is shameful. Homes are listed as needing third party approval when no paperwork has been filed. There are cases when people list their home as a short sale and they have not missed one payment. There are cases when the lender has said they will not accept a short sale and the home is listed anyway.
The MLS should only have homes for sale that are actually possible to purchase at a price that is the same as or lower than the price listed. (multiple offers may increase the amount received). There is little value in having an inaccurate MLS. Listing agents create the problem, but buyers agents face the wrath of frustrated buyers.
We need standards. We need valid disclosures. We need to add “the home is listed for less than is owed on the property and we have obtained permission from all lien holders to proceed in attempting to sell the house.”
It is not rocket science. It is presenting the truth to the buying public. Agents that take listings with a wink and a nod hoping to get approval in the future are doing a dis-service to others. Their behavior and willingness to roll the dice with an unsuspecting client is dancing in the grey area, very close to the fire of unethical behavior.
States will have to address this soon. More properties are becoming at risk. More buyers are in the hunt. They deserve to hear the truth. A short sale is only a short sale if the lenders have agreed to the attempt. Period.