Sarasota homes sink “under water” as homeowners lose their jobs and search to avoid pain worse than foreclosure.
Facing foreclosure brings out the vulnerability and confusion in all of us!
Calling yourself a “Certified Distressed Property Expert” or short sale “expert” involves more than taking a course and receiving a certificate.
Over 100 short sales to date, I am not an expert, but I’m pretty darn experienced in short sales.
To date, one short sale has gone into foreclosure when I came on board earlier enough to help. What happened with that property is enough for a separate discussion (hint: tenant squats & court delays).
In this case, banks (mortgage debt owners) change the rules daily.
In my experience, successful short sales require as much LUCK as SKILL.
On my favorite Orlando Bankruptcy Attorney’s website, I responded to one of Jon’s posts titled, “Short Sale With BofA Is Bad Deal For Borrower!” (source: http://floridaassetprotection.blogs.com/alperlaw/2009/06/short-sale-with-boa-is-bad-deal-for-borrower.html#comments)
A Realtor named Gwen posted the following comment….she makes a great point about seeking professional advice.
Sounds Like Wise Advice…
However, her comment gives the mistaken impression all CPAs and attorneys are alike in providing useful advice:
Gwen says, “I am a realtor and I always want any seller to contact their cpa or attorney regarding a short sale. Their are tax liabilities they need to know about before they agree to a short sale. A Realtor can not and SHOULD not give advise on short sales.” Posted by: Gwen | Jul 26, 2009 9:29:14 PM
To Gwen’s comment, I post the following response, absolutely not blasting Gwen…. Hopefully, I’m clarifying for Gwen what she meant to say:
Sarasota Realtor Clarifies
Fellow Realtor’s Advice!
Gwen, you should preference your comments about giving advice to REFER to advice outside the REALTOR’s licensing guidelines.
I sure as hell hope you are able to give advice about the short sale process. If not, don’t take a listing that is or will become a short sale listing. In fact, I’m tired of realtors desperate for a commission agreeing (with NO knowledge in or experience of) short sales.
Learn about short sales BEFORE you take listings.
Real people are RELYING on YOU for guidance…for help avoiding foreclosure.
None of this is intended to blast Gwen, whose point is to consult with one’s CPA and real estate attorney.
CPA about potential tax implications, especially if you’re not a “homestead” owner.
Here’s where I have difficulty with real estate attorneys. Real estate attorneys with whom I’ve consulted ONLY know the standard sale & purchase agreement.
They do NOT know anything about OPTION contracts.
If a listing agent does not know about option contracts in today’s tumultuous distressed property market, the list agent is jeopardizing a homeowner’s selling short.
What do I mean?
How long with buyers stick around waiting for the bank to respond?
30 days? 60 days? 90 or more days?
Rarely, will a normal buyer wait around past 60 days, even a buyer whose buyer’s agent clearly has explained the process and insists the buyer wait.
After 45 days, the buyer wants to look at other properties.
The buyer finds one (short sale) and list agent accurately or inaccurately tells buyer’s agent he/she either has or is about to have lender approval.
Guess what?
Buyer submits offer w/o canceling the initial offer. Can a buyer submit offers on more than one property?
Not legally, unless buyer wants to purchase more than one property.
However, it happens all the time. Suddenly, the list agent of the initial property gets approval and excitedly calls the buyer’s agent, who regrets to inform the list agent the buyer has purchased a different property WITHOUT CANCELING.
Big lawsuit coming, right?
WRONG!
Seller/Owner MUST have money to pursue buyer for specific performance. No lawyer in Orlando would touch a similar case without $15,000 retainer. Not ONE attorney.
In their minds, the seller is in distress…needs to sell. Obviously, this seller has no money, right?
Now, my broker utilizes the OPTION contract.
Unfortunately, most real estate attorneys have no clue what it is or why it BENEFITS sellers needing to short sell.
Simply recommending a seller/homeowner consult his/her attorney and CPA should come with disclaimers. What happens when a seller needing a short sale has a buyer who cuts out and the property goes in to foreclosure?
Did that real estate attorney give enough or the “right” advice by not recommending an OPTION contract with an investor who will stick around?
Simple advice might absolve a real estate licensee from any alleged impropriety. However, simply suggesting a homeowner consult a CPA and real estate attorney might not help a homeowner in distress.
Mike Payne
Sarasota-Orlando Realtor
The stakes are too high for homeowners facing foreclosure. Choosing to work short sales implies specialization. Taking a listing and passing it off to a short sale negotiation company assigning just as many files to its negotiators as a bank does to its negotiators is poor representation.
A realtor choosing short sales MUST specialize or refer short listings to a realtor who does specialize.
Short sales have nothing to do with “top producing” realtors whose local contacts, referrals & marketing skills result in selling bazillions in real estate.
Bank of America, Wells Fargo or NCO Financial could care less that you’re a “top producer” when calling (if you do) on a short sale file you’re listing. Do you have something to say about this article? Scroll down and leave a comment. I look forward to hearing what you have to say.
Sarasota homes selling short involve real people’s emotions. If they’re facing foreclosure, the pain is worse than an investor losing an investment property. Chances are, one or both homeowners have lost work or health or both…resulting in inability to make the payment (even a modified payment).
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