Whose fault is it that your buyer’s short sale didn’t close in time for their needed move date and they walked from the deal….and you….forever? Well, it’s the lender’s fault of course. NOT!!! Sorry but the blame starts and ends with you. You should have never even gotten your client into that situation in the first place. We all know the nightmares of getting short sales to close in a timely manner. If you have a buyer who absolutely MUST be in a new home by or around a certain date, then you should have never written a contract on a short sale. I don’t care if the client was adamant about purchasing a short sale, I would have strongly advised them not to and told them that you are not comfortable representing them in that option should they want to continue down that slippery path.

If they do, your options are:

Turn them over to a competing agent you don’t particularly care for.

Suggest they be prepared to rent when their move time comes and goes.

Represent them in the short sale and lose a client for life.

Be real, unless your buyers are investors with a permanent roof over their heads and no cares regarding closing dates, then you run the risk of losing the deal and making a very nice enemy of your buyers who will not have nice things to say about you. Even those agents who proclaim to be experts in short sales and agencies who promise to get the job done in time are having difficulty with this process. If you have no training or true, top level relationships with the lenders you really shouldn’t give it a try. Reality is, we have no control over these closings at this time. You run a very high risk of not being someone’s hero.

We keep pointing fingers at the lending institutions and their inept way of getting these deals closed. Truth is those lenders are scrambling with overworked, underpaid and sometimes inexperienced help. VERY IMPORTANT! Keep in mind that the remaining lenders have absorbed huge quantities of unfinished files from desks of administrators whose offices closed and who are now out of work. Those files land on another person’s desk that has never even seen the file. Even though the offer was presented to the defunct lender months prior, it must go through the entire process yet again with a new representative and even then, the employees at these shifting institutions, are being moved from department to department to sustain the changes needed to keep the organization running.

The lending industry has been swept up in a whirlwind and has yet to be able to catch it’s breath from the changes manifested over 24 months ago and it isn’t getting any better…yet. They can’t even keep up with the foreclosures they need to process that should have been processed a year ago. The issues with the FSBE 157 market to market valuation is also another huge stumbling block where appraisals and bank portfolios are concerned. Yes, the bail out was necessary.

It doesn’t matter how we got here….we are here. Trying to point backwards and blame non-conforming loan originators etc. is a waste of time. I have a very strong opinion regarding lending institutions receiving government financial support to get through these challenging times. No matter how you look at it, when they get funding, they have the ability to hire more people to get the job done and have the means to offer consumers more help and flexibility allowing them affordable options that help them stay in their homes.

Contrary to popular belief, the banks don’t want to take homes back, however, and this is my opinion, I do believe we will start to see banks holding onto properties and drastically reducing the amount of short sales they are willing to negotiate and close. The market has created a false sense of security that most lenders would be happy to take a short sale. Don’t rely on that when educating your buyers. Have back-up offers prepared or a rental ready for move in if you do. By short selling, the lender loses its ability to maintain strong viable portfolios for international investors. REO property has more value than a reduced loan buy out. If you haven’t taken NAR’s Short Sale and Foreclosure Resource course, you should think strongly about it or find third party courses that will get you the certification and knowledge you need to capture this ever expanding niche. NAR’s webinar classes are FREE http://www.realtorsfr.org/webinars.html

Here are a couple other options:

http://www.theagentcenter.com/

http://www.realtyuonline.com/cspcourse/splash_page.htm

Next article will take a look at the Seller pitfalls of short sales and what other options they have before they get too deep into the spiral downward.