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Commission on Short Sale

Posted by jane__ny (My Page) on
Fri, Jun 4, 10 at 22:56

We are looking at homes in the Sarasota, Florida area. There are numerous short-sales and foreclosures. Many of these homes are 'almost' brand new having been built in the last 5-10 yrs. Prices on the homes have dropped very low.

We have contacted various real estate agencies in the area and find most are not interested in short-sales. We are wondering how the agent is paid - by the bank? Is it a waste of their time showing clients short-sales because they make very little?

Thanks,
Jane


Follow-Up Postings:

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RE: Commission on Short Sale

If you have sold/bought property before then I would go directly to the listing agent for a short sale. Get your own lawyer to go over any documents.

Agents aren't intersted in short sales because they take too long to close and there aren't any guarantees that it will even close.

There also seems to be plenty of opportunities for fraud with short sales ... buyer beware.


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RE: Commission on Short Sale

Jane,
Early on, I made a business decision to not take any short sale listings. They require a lot of silly work, are time consuming, frustrating, no guarantee of it ever going to close, buyers have the right to back out of deal at any time for no reason, and the pay is reduced. I went against my policy and took a short sale listing for a friend of mine. This was in Sept, 2009. We had a buyer for the place since Nov. 2009. Closing was scheduled for this June 11, 2010. Buyer calls two nights ago and terminated the contract. The bank will more than likely foreclose now. I spent over 80 hours on this property, and will never get paid. As a businessman, I have to find ways to maximize my time... short sales are not one of them.
And beware of all the pitfalls of buying one too. If you are not in a position to wait around for months at a time with no response from the bank, only to find out days before your closing that it just aint gonna happen. Most buyers are not in a position to handle this type of market.


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RE: Commission on Short Sale

This scenario happened on the east coast of FL about this time last year.

We have a Canadian friend who wanted a short-sale home that was trashed but it had really good bones. His realtor specializes in such things and my husband (retired banker) helped the process along. The process took about 3 months. Our friend offered the bank $400,000 cash and the bank accepted ($750,000 was outstanding on the loan). The house appraised at $355,000 and the bank when thud and then accepted that amount because they would have only done a loan in that amount based on that appraisal. After investing $100,000 more into the property, this place is absolutely beautiful!

I don't know what the time frame would be now, but I do know that in FL there are a LOT of realtors who specialize in short sales. I think the banks realize it costs too much to foreclose and are reluctantly accepting the current situation.


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RE: Commission on Short Sale

beachlily-We have a Canadian friend who wanted a short-sale home that was trashed but it had really good bones. His realtor specializes in such things and my husband (retired banker) helped the process along.

I'll bet your husband was a big help. Especially considering his experience prior to the housing crash.

"During the S&L failure my husband worked with the RTC and routinely sold bank holdings: GNMA and FREDDIEMAC participation certificates, junk bonds (really junky ones), and CMO's (collateralized mortgage obligations). He also unwound interest rate swap positions and other hedging instruments. Our table talk could make your eyes glaze over. It's interesting to us, though." (Aug 07')

At least your Canadian friend can be grateful to have friends in-the-know! Perhaps you could offer some suggestions for the rest of us on how to purchase short sales without all the hassle?!


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RE: Commission on Short Sale

How did you find that old posting?? My hubs is a wonderful guy!

He will be at the Celebration of Life (for cancer survivors) tomorrow and won't have time to give any suggestions until that event is over. I'll try to strongarm him into giving some hints in the next day or two.

I do know that having a real estate agent who is very familiar with the process is critical. The agent our friends used knew who the key person was in the bank who had the authority to make decisions. She kept on him to keep the process moving. My husband kept on her (in a nice way) to keep the process moving, too.


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RE: Commission on Short Sale

Thanks for the info. The situation in this part of Florida (don't know what is happening in the rest of the state) the majority of houses in our price range are short-sales or foreclosers. It is apparent the agents do not want to show those houses, but have to anyway. Some houses become short-sales before the agent is informed.

What we are seeing are so many houses which were built during the 'boom' in gated communities which can't sell. Most are only a few years old and everything inside is perfect. The owners are still living in them. My impression is they are just walking away from the homes. They have expensive cars in the driveways, large flat screen tv's and multiple computers. These areas are deed-restricted (which we don't like) but the areas are kept so landscaped and manicured.

I feel for individuals who are trying to sell their houses normally for a decent price. Their competition are all the shorted houses. It is a sad state of affairs and the local paper states housing prices continue to fall.

There are large, waterfront homes which stand empty and would need work. Those are outside our price but you see them from the roads. There are just too many homes to sell, I don't see how prices can possibly stabilize. It is almost impossible to stay away from short-sale houses. They are the majority.

Jane


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RE: Commission on Short Sale

The realtor I used when I purchased my short sale house a couple of months ago got the standard 3%. He had no problems showing us the house, regardless of the fact that it was a short sale. The whole process for us was pretty quick, by short sale timing. We had an accepted offer from the bank within about 4 weeks, closed 3 weeks later.


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Owners Stop Paying Mortgages, and Stop Fretting

"What we are seeing are so many houses which were built during the 'boom' in gated communities which can't sell. Most are only a few years old and everything inside is perfect. The owners are still living in them. My impression is they are just walking away from the homes. They have expensive cars in the driveways, large flat screen tv's and multiple computers."

The following article might explain why owners aren't moving out in a big hurry.

A link that might be useful:

www.nytimes.com/2010/06/01/business/01nopay.html


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RE: Commission on Short Sale

It is amazing. Given enough time, some people can make up a reason to justify fraud. Personal responsibility has nothing to do with it.


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RE: Commission on Short Sale

Who committed the fraud?

The lender who threw money at unqualified borrowers or the borrowers that accepted the money?

I have always purchased less than the bank was willing to lend (on my residence and investments).

It avoids getting caught short if things go sour.

The real fraud is still the lenders who sold off the mortgages.

Outside of the ones caught short in the credit freeze or holding the now worthless bonds they will escape damage from most of the notes they passed on.

Freddie and Fannie will likely even be paying them to dispose of the foreclosures.


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RE: Commission on Short Sale

We purchased a home and our accepted offer kept it from going into foreclosure. The realtor didn't make it known to us that the bills weren't being paid on the property until we read it in the paper. It was a mess and took a substantial amount of time on all our parts to shore things up. The sellers didn't initially come up with the money they had promised. We ended up closing on the house and the realtor asked us as buyers to pay some money for his commission. We said no for a variety of reasons. What would you have done?


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RE: Commission on Short Sale

In the absence of any written agreement between you and the Realtor to pay him, you had no obligation to do so. However, I'm sure the seller had an agreement they could not meet. Just another pro bono Realtor case. I've been there as a Realtor, it happens.


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