From the “Ask the Broker” inbox:
Help. I am headed down the foreclosure road with a house in Mesa that is now vacant. How do I find an agent that is willing to take on the tedious job of a short sale? I find that once I mention my situation no one wants to help me even list my home. I am no longer living in the home so restructuring the loan only seems like pushing off the inevitable. Please help. I dont want to foreclose, but I dont know how to find someone that will help me. Thank you for the opportunity to ask my question.
We are so sorry to hear about your situation. You are not alone when it comes to trying to locate someone who will list your property as a short sale.
There are likely a few reasons you are having difficulty finding an agent to list your property.
Short sales are painful to list!
The main problem boils down to financials. Short sales can take an enormous amount of time, effort and money on the part of the Realtor, and 90% to 95% of short sale properties never wind up being sold – they end up in foreclosure. Real Estate agents must pay their expenses up front and they are going into the listing with less than a 10% chance of earning a commission. If a buyer can be found who is willing to go through the 8 to 16 weeks it often takes to complete a short sale purchase, the lender typically cuts the commission to the point that it only covers the agent’s costs with nothing for their time and effort.
In short, there is a very high probability that an agent that takes a short sale listing will wind up working for free. That prospect simply isn’t very appealing to many people, Realtor or otherwise.
Selling a home in a short sale also requires knowledge of the short sale process that many agents lack. Preparing and presenting an offer package to the lenders loss mitigation department is very different from presenting an offer in a normal transaction. If more than one lender is involved, it further complicates matters, often significantly.
Because of the low prospect of selling the home, the sometimes drastically reduced commissions, and the expertise required, some brokerages simply won’t list a short sale property under any circumstances.
Thompson’s Realty has to be very selective about the short sale properties we list. If the property is in superior condition, there is only one mortgage company involved, and we feel the home can be priced and sold at a point the lender may be interested in, then we will seriously consider listing the property. If the property has condition issues, there are multiple loans on the property with different lenders, and/or the current market value is significantly lower then the loan amount, then we must require a non-refundable retainer fee of $250 in order to list the short sale. This fee helps offset some of our up front costs. We understand completely that most people in a pre-forclosure environment can’t afford to pay a $250 retainer fee. But we have a business to run and we can’t afford to continue to list properties with a low chance of returning any profit to the business. Working for free (or more accurately, working for a loss) is not an effective way to run a business.
We also recommend that you consult an accountant or income tax professional before you list your property as a short sale. There can be some tax consequences when you sell your property short.
Looking for more information on short sales? Below is a link to all articles written on this site about short sales:
Phoenix Short Sales
Thinking about short selling your Phoenix home?
Just complete the form below for a no cost, no obligation consultation with one of our experienced short sale experts: