There was a time when you could easily avoid short sales and in some areas you still can. But what do you do when the home your buyer really wants is a short sale? Or they’ve written on and lost multiple offers on REO properties? Short sales are a great opportunity for your buyer if they have some time. Typically there is not a lot of competition and very often the home shows better than the competing REO. So what questions should a buyer agent ask the listing agent?Before writing an offer you really need to get a feel for the competence of the listing agent to get this sale to close.Property specific questions:
- How many loans are there?
- If two, are they with the same or different lenders?
- If two is the second one a HELOC? HELOCs fight much harder to get a bigger chunk back, often 20%. That 20% can be a deal breaker at times if your listing agent is a poor negotiator and the 1st lender doesn’t want to provide it to the 2nd.
- Has this agent closed any previous short sales with the bank(s) in question?
- Have any other offers been received that may have started the process already? Remember many banks will not start the short sale negotiation until an offer to purchase is in hand.
- How far behind are they with their payments? You will need to be familiar with your states foreclosure process and laws to better understand how their timeline may affect the home owner and your ability to close in time.
- Has the NOD (Notice of Default) been filed yet?
- If they are 3 or more months behind with an NOD has the bank agreed or implied they will hold off the foreclosure if an offer is received? Many agents won’t have this answer initially but if they call to the bank they can get a feel for it.
Agent Specific Questions:
- Have they closed previous short sales?
- If yes, what is their closing rate/percentage? How many have they put under contract and how many of those have gone to closing?
- Do they negotiate their own deals or use a third-party negotiator? I have mixed feeling on using a third-party but either way you want to know who is negotiating it.
- If you have experience and wish to ask if they would allow you to negotiate the deal.
- How successful are they are at keeping your full commission as listed in the MLS?
- How often will they update you?
- What is their follow-up frequency with the bank? If they tell you they submit and wait to hear back when the bank is done pass on this one.
- Do they place the home ‘Under Contract’ in the MLS or leave it active to generate additional offers? This may vary between markets but in ours the buyer and seller are ratified when they sign off on the deal. And based on that the home comes off of the market. The banks approving the deal is only a contingency. I know if I were the buyer agent I would not want my buyer writing on a home that the seller will still be shopping for offers on.
- Heck, why not ask them for the most recent buyer agents they have closed short sales with and call them for some feedback.
- If they receive multiple offers do they send them all to the bank or just one? Again consult YOUR broker but I know when I speak with negotiators from the banks about this they laugh. They say when multiple offers come over they often know the Realtor has no idea what they are doing. The statement I heard was ‘It’s not also my job to pick the offer. That’s what the Seller and Realtor are supposed to be doing.’ One negotiator stated when she gets multiple offers she pushes that file to the side and to the bottom. She said she also knows from experience that agent will most likely give up all of the commission to get the deal to close. So I say again, check with your broker about how there should be handled in your area.
I know this is a huge list of questions. You may not need to ask them all but make certain you have the comfort that this listing agent has a handle on the process and can help get this to close.