Why Short Sales Don’t Sell… No Surprises!

 

Those dollars down the drain represent the hours wasted. Who wasted them?  Hmmm, how do you waste them? Let me count the ways….

  • Begin with the hours a new home buyer spends in front of the computer screen perusing all the homes for sale in their price range (we won’t count the productivity lost when searching at work).
  • Then there are the hours the new home buyer spends on weekends, driving around stopping at open houses.
  • Next, you have to toss in the hours the new home buyer spends doing research on which agent to use in their search.
  • Now, the cost of the hours begins to increase. After all, the agent is doing this for a living and even if they don’t realize it, their time spent is money spent.
  • The next batch of hours lost are spent visiting properties that may or may not be available. Under our current rules…..it has become a “crap shoot”.
  • These are followed by the painful hours. You know, those hours it takes to prepare an offer, followed by the hours it takes to receive a response. You can even add a bunch of minutes for the time you wait for the agent to even return a phone call.
  • The come the hours of death. All the time spent has been for naught.

The home was not really for sale. It was in the MLS. It did have a list price. It did say pending 3rd party approval. It did have a sign in the yard. I did have a lockbox on the door. I did have a fancy sell sheet on the table. The home was not really for sale.

The following is an example. This is not t.v. and this is not a fictional account. Names remain the same. I make no judgement on the innocence of anyone. It just is a sample of why short sales don’t sell.

A very good friend of mine called and asked if I would consider taking a young couple out to find a home. She prefaced the information with “they don’t have a lot to spend, but they are a very nice couple.” I told her absolutely, send me the information and I will do what I can to help them.

I chatted with the wife and she said they could meet me at the property that evening. I drove to Brunswick and showed them a home. Now, now….before we walked through the door, I explained agency relationships and the other information required by the State of Maryland. They liked the home, but said that the location was just a bit farther than they would like. They explained that they would like to find a home soon, but they are not under any time constraints. I told them I would do some searches for them.

I went back to the office and did the usual MLS, Craigs List, FSBO.com searches. I checked the on line classifieds and came up with a group of homes that were in Frederick. I sent them the information. They wrote back with a list culled from list that they wanted to see.

I made the proper arrangements and we met a second time and went on tour. The first house we visited was missing a refrigerator, toilet and upstairs window. I rechecked the listing and the agent had shared “great shape, bank owned.” Apparently, the bank did not own a refrigerator, toilet or upstairs window. We moved on to the next home. Our third stop was very brief. The owner (yet another in a short sale status) shared that “they did not give a rat’s xxx what the agent told us, they were not allowing people to see the home except on weekends”. They slammed the door in our face. (I made a mental note to make sure and call the agent and let them know how much my clients appreciated that treatment. My buyers did not want to reschedule for the weekend or any other day.)

At the end of the evening, they had found the home they wanted to buy! It was a nice little townhouse at 121 Lauren Court, Frederick, MD 21703. It was listed by Homestar Realty located at 8120 Woodmont Ave, Bethesda, MD 20814. The listing agent was Marjorie Perez-Martinez.

The list price in the multiple listing service was $141,000. The AGENT REMARKS : Gorgeous townhouse in perfect location. Hardwood floors in main level, ceramic tile in all baths, huge closets, stone patio with fenced rear, storage shed and much more…PRICE TO SELL..A MUST SEE… This is a Short Sale subject to bank approval. As is condition.

The compensation was listed as 3%.

Now, other than the fact that it was apparent that the agent did not know the difference between hardwood floors and cheap pergo knock offs, I believed that the information provided was correct.

My clients had financing in place and came in to sign an offer. I won’t bore you with too many facts. Using my expertise and knowledge, I suggested that they offer $148,000 with $6,500 in closing help. I was aware that there was another offer and we would be in a competitive bid situation.

My clients signed the offer. I submitted the offer and we began our wait. After about 36 hours of calling and leaving a message with the other agent (trying to ascertain if 1. the offer had been received and 2. had the offer been submitted to the bank.), we were told that the offer had been sent to… drum roll, eye roll, belly roll, roll the dice, roll over and play dead… Countrywide.

Bright and early on day 4 we received a note from the listing agent. Countrywide had sent my clients a counter offer. THIS IS NOT A MISPRINT. Countrywide’s counter offer was $158,000 with 2% seller help and a reduction in the commission to 2%.

I called the other agent. I asked…“Let me understand this. My clients offered your client a contract that would net them $1,500 more on the price and they have responded that they want $17,000 more in price and are willing to offer $3,160 in seller concessions?”

The other agent asked if my clients wanted to counter.

“NO, the offer submitted is their best and final offer. Tell Countrywide take it or leave it.”

We are still waiting.

Oh, why short sales don’t sell? Maybe it’s just my opinion, well, it is my opinion, bait and switch stopped working when vacuum cleaner salesmen stopped going door to door. There is no policy preventing broker’s from listing a property well below what they know or should know would be acceptable to the bank. There is no ethical requirement for those zealously seeking to reap the rewards of people struggling.

I realize that I share the same profession with the other broker and the listing agent. Fortunately, I do not have to ever share the same room with them.

My clients, well, it is a setback, but I will find them a new home.

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