Short Sale Dilemma for Agents

My brother is currently serving in the military (proud of you kid!), and sent me an email recently for a friend of him that looked like this:

"Real estate question for a friend of mine. Is there any reason short sales are undesirable for buyers? He's trying to work with an agent but she is unwilling to consider helping them with any short sales."

For all of you Real Estate Agents out there thinking 'where do I begin with this question?' the answer is, Yes.  I was thinking the same thing. There's been a turn in the market, at least here in Southern California, where things are looking up for sellers at least. It's been a buyer's market for so long that new buyers coming onto the scene still have the mentality that they won't have to compromise on their purchase, but that's not what I wanted to write about. I wanted to give a quick list as to why an agent would refuse to show their clients Short Sales above Standard or even REO listings.

• The Listing Agent - So much of the success of the short sale depends on the listing agent. They need to be someone who understands what it's going to take to negotiate a successful short sale, along with the industry knowledge and experience to deal with Asset Managers and Sellers alike. A good agent can know within a 2 minute conversation with the listing agent if they are a "Hero or a Zero" to coin a phrase by Lori Greiner. 
• Repairs - The bank will not do any repairs on a short sale. I hesitate making blanket statements like this, because I'm sure there's some guy who will pull out some experience from back in the 80's saying that the bank approved and completed some repairs to close a short sale. Those guys drive me nuts btw, always right, one-upper type personalities, me monster; but I digress. An agent that discloses the types of repairs in the remarks lets the buyers know that unless you're coming in with cash, work is going to need to get done. All roads leading back to the Listing Agent. 
• Banks and Liens - We're on the banks timeline. I've closed a short sale in as little as 2 months, start to finish, and as long as 13 months... IKR? 13 long months... I've had to pause and reflect on that transaction while typing this post. Anyway, banks, yes we are on their timeline and if it's one of the big boys, just anticipate 5 months start to finish. They're seemingly always playing catch-up with the market; introducing new policies when they should be leading the market in innovation as it pertains to the short sale policies. Smaller banks are the best to deal with. The fewer the amount of liens the better. I always ask 1 loan or 2 when talking with the Listing Agent and again, if they have already disclosed it in their remarks it makes for a much more pleasant transaction. 
• Commission - The majority of people look at commission as an evil thing. I've been self-employed for almost 10 years now and my perspective on commission is a little more skewed than the average individual, but from a purely business sense, I want to work as little as possible to make the most amount of money. I may be the only one who admits that openly, but you all think the same thing. It's the same reason Andruw Jones never shows up to Spring Training in shape. I'm just saying... and if you were given the option to work less hours for more pay you would make that commitment too. I'll give you a scenario; let's say your boss came to you and said, look I have a project that is going to take 80 hours/week to do, but I'm only going to pay you for 40, you would be thinking the same thing Real Estate Agents think only we're self employed so we have to take whatever the market gives us. Just imagine what the unions would do with a scenario like that! 

So to answer my brother's question, Yes, Agents shouldn't avoid showing short sales, but I wouldn't fault them for not wanting to deal with them. There will be some younger agent with a mortgage and 4 kids willing to work for you however long the deal is going to take.