Several months ago, a past client called us up to talk about having us list his Vancouver Washington home for sale. They aren't happy about parting with the home in the current real estate market, but they have no choice. He and his wife are going through a brutal divorce and are forced to sell their beautiful $1.6 million home. Unfortunately he and his wife chose to go with a different agent in the area who is known for selling multi million dollar homes in the Vancouver WA real estate market.
Fast forward to yesterday, October 7, 2008- The phone rings and it is the above mentioned past client. He has an offer on his beautiful Vancouver Washington house! As I congratulate him on the sale, he drops a bomb on me:
"Mark, the offer is for less than I owe on the mortgage. My real estate agent says that this is called a Short Sale. She says that I need to call the bank to get approval from them to sell the house. I don't know what to do."
He told me that he knows that I have negotiated dozens of short sales for my clients and that I was the only one who he could think to call for advice.
I could hear the fear in his voice. I won't go into the advice that I gave him as we talked on the phone for almost 2 hours.
I would like to know your thoughts about the other agent who got them into this situation!
Is it ethical to get them into a sales contract then leave them to negotiate their own deal with the banks? (1st and 2nd mortgage on the house.)
I looked up the listing in our MLS and there is no mention of a short sale or the requirement of 3rd party authorization. My past client says that they still aren't aware of the short sale situation. Is the agent some how liable for not making the potential buyers aware that this is a short sale?
There are hundreds of questions buzzing around in my head right now, but I would really like to get your thoughts.
Photo courtesy of graphiteBP. No that is not a real picture of the agent in question! I found the picture at a stock photography site. I am sure that the woman in the picture is very competent at everything she does!
When you choose us to handle your Vancouver Washington real estate needs, you choose a team of realtors® who care about you and your family. Buying or selling a home is always more enjoyable when you work with professionals who will listen to your needs and who will work together with you to achieve your objective. We are very familiar with all types a real estate in Clark County and we specialize in Vancouver, Ridgefield and Battle Ground. We are also very experienced with new home and custom home construction having assisted several local builders in selling new neighborhoods in the Vancouver Washington area. Additionally, we have helped numerous families build their own Vancouver Washington dream homes. We are dedicated to helping you make intelligent, informed decisions and to providing you with exceptional service. Go to www.ernw.org for more information. See our video here.
When you choose us to handle your Vancouver Washington real estate needs, you choose a team of realtors® who care about you and your family. Buying or selling a home is always more enjoyable when you work with professionals who will listen to your needs and who will work together with you to achieve your objective. We are very familiar with all types a real estate in Clark Countyand we specialize in Vancouver, Ridgefield and Battle Ground. We are also very experienced with new home and custom home construction having assisted several local builders in selling new neighborhoods in the Vancouver Washington area. Additionally, we have helped numerous families build their own dream homes. We are dedicated to helping you make intelligent, informed decisions and to providing you with exceptional service.
Two questions come to mind. The first is if it had been a full price offer, would it still have been a short sale? The second is that if this agent is having the seller do this because they don't understand short sales? If this is the case, then they are over stepping their boundaries even listing the home in my opinion.
I hate being the 2nd agent in a short sale, because you are working from a shortened timeline and angry seller and possible buyers that had put an offer in before.
Did you start by asking him why he didn't call you in the first place? OK you probably couldn't do that. I'm curious what happened. Was he able to help his realtor realize she needed to do her job. I can hardly believe she told him to negotiate with the bank. No it is not ethical.
If the sellers are in default whether the sales price is enough to clear the loan or not, it may be a "third party approval" situation which is nearly the same transaction as a short sale. Whenever a seller has missed a couple of payments the negotiation will need to include the loss mitigation department of the lender. Case in point, I listed a home for sale once that should have had enough equity to sell for list price, pay off the mortgage and pay commissions without doing a short sale. Since the seller had missed one or more payments, his file was sent to loss mitigation who would not return phone calls or fax requests for a payoff. I had a good offer on the property and the deal failed because the lender would not give us a payoff. The mortgage company, American Home Mortgage, was one of the first to go belly up last year and the house is still sitting vacant more than a year later.