Birmingham Real Estate: You've Got Options: Short Sales Are Complicated Enough Without Unnecessary Angst

Short Sales Are Complicated Enough Without Unnecessary Angst

Short Sales Are Complicated Enough Without Unnecessary Angst

Before entering into a short sale, a buyer has to think long and hard about the level of patience ans persistence that they possess. But when you are purchasing a home "contingent on the sellers being approved on another home" that is a short sale, you have either have to be trying to buy the only house on the market or are a direct descendant of Job himself.

A week or so ago, I was watching one of those HGTV first time home buyer shows.  In this particular case, the buyers had made an offer on a home, that even before the appraisal, appeared to be overpriced.  In addition to being apparently overpriced, the sale was contingent upon the sellers being approved for a short sale on a house that the sellers were trying to buy.

Now, we all know that many or or much of these shows are scripted and I kept waiting on the part where the buyer's real estate agent either advised against this double whammy or at least explained to them how complicated short sales can be (and this wasn't even the buyer's short sale transaction).  Well I never heard that.

In the end, here's what happened:

  1. First of all, the appraisal occurred before the seller's were notified about the status of the short sale that they were trying to buy.  And yes, you guessed it, the appraisal came back several thousand dollars below the offer price.
  2. The buyers went back to the table with a request to reduce the price. The sellers rejected the lower priced offer.
  3. That did not discourage the buyers.  They wanted the house so bad that their real estate agent was seemingly encouraging them to find another lender in hopes that a second appraisal would garner better results.  Luckily they decided to wait to see if the sellers were approved for the short sale that the sellers were trying to buy.  If I am not mistaken, the buyers were willing to bring the additional money to the table, if necessary.
  4. After waiting for 4 months, the buyers did not get the house because the sellers were not approved for the short sale that they were trying to buy.

Now as real estate agents reading this, I am sure that you are probably pulling your hair out in disbelief just as I was as I witnessed this.

But here is my hope

  1. I hope that we all do an exceptional job of advising our clients particularly when it comes to the complicated matter of dealing with short sales
  2. In the end, I always hope that buyers are not so desperate or disillusioned with a home that they are willing to pay more for it than it is worse and/or give in to unreasonable request and/or make irrational or irresponsible decisions that clearly are not in their best interest, given the sound advice and vast information that we have provided.

This episode of the program was tough to swollen because from the beginning, I couldn't see how the buyers could win and in the end, they lost time, money and a home that they really wanted.

 

 

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Charita H. Cadenhead, Realtor®
Keller Williams Realty Metro North
Gardendale, AL 35071
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Comment balloon 8 commentsCharita Cadenhead • December 12 2013 06:55AM

Comments

Good morning Charita. You're exactly right Short Sales are complicated and there is certainly nothing short about them.  Many buyers are often very confused about the process.  If I had closed all the Short Sales that we had waited on then my buyers gave up and walked I'd be stepping in high cotton.

Posted by John McCormack, AlbuquerqueHomes.com, Albuquerque Homes Realty (Albuquerque Homes Realty * www.AlbuquerqueHomes.com) over 4 years ago

I totally agree John. I think that what was really unusual about this case is that the buyers were not the ones buying a short sale (the sellers were).  That was the real twist.

Posted by Charita Cadenhead, Serving Jefferson and Shelby Counties (Alabama) (Keller Williams Realty) over 4 years ago

That would be a show that I would rip all my hair out as well.  They need to advise buyers appropriately, even in these 1/2 hour shows, they need to make sure that they are properly educating the consumer.  It is not realistic and it hurts our business as a whole to have these perceptions out there.

Posted by Karen Feltman, Relocation Specialist in Cedar Rapids, Iowa (Cedar Rapids/Iowa City, IA KW Legacy Group) over 4 years ago

Exactly Karen.  Some people watching these shows end up believing that we do far less than we do when it comes to meeting our fiduciary responsibility.

Posted by Charita Cadenhead, Serving Jefferson and Shelby Counties (Alabama) (Keller Williams Realty) over 4 years ago

Hi Charita - I can't watch those programs. I get too worked up and just end up yelling at the TV. It's hard to deal with the fact that way too many buyers get their understanding of "how real estate really works" from those shows.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) over 4 years ago

Dick I am not a really be tv watcher, but when I get a hankering to do so and absolutely nothing else is on, I'll usually resort to a cooking show or HGTV.

Posted by Charita Cadenhead, Serving Jefferson and Shelby Counties (Alabama) (Keller Williams Realty) over 4 years ago

Short sales are difficult, not for buyers and agents who are willing to hang out for the long haul.  Some more quickly than others, but others seem to take for ever.

I don't watch shows of TV, in the evening I may watch a thriller movie!

Posted by Barbara Hensley, Homes for Sale in Rockwall County, Texas (RE/MAX Properties) over 4 years ago

Barbara in this case if the buyer were buying the short sale, then it would be more fathomable to wait it out.  But the buyers were attempting to buy a house from sellers who in turn were trying to buy another house that was a short sale.  That's just too much.

Posted by Charita Cadenhead, Serving Jefferson and Shelby Counties (Alabama) (Keller Williams Realty) over 4 years ago

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