Short sales represent about 60 to 70 percent of the Lee County real estate market. Compared to a year ago, the prices of short sales are moving ever more closely toward today's fair market value, in that the lenders that hold the mortgages on these properties have tightened up their value estimates by ordering appraisals. Many buyers perceive that they can purchase short sale properties for pennies on the dollar, and far less than if the sellers hold an equity position and are current on their loans.
Many buyers make offers on these properties with the expectation that the lenders will approve the first offer submitted without the lender negotiating a counter-offer. This may be true in some cases, but lenders are getting smarter.
Prior to presenting an offer to a lender, the real estate agents should determine from the buyer the maximum amount they are willing to pay for the property and how long they are willing to stay with the process. These questions will quickly gauge whether the buyer is wasting the agent's time. The length of time to complete a short sale is getting shorter, depending on which lender is involved. However, there is always the buyer that becomes impatient and eventually walks away from the transaction.
I had written an article a few months ago about buyer agency agreements. Working with buyers that are adamant about purchasing short sales is a great opportunity to get their commitment by executing such an agreement. More-over, getting money up front that may be applied as a credit if the buyer closes on a transaction later, keeps them honest, and less likely to walk. Short sales are very time consuming to the real estate agent. When you factor in the hours and hours of phone calls, negotiating and submission and re-submission of documents, why not get paid for your effort in the event the buyer bails out?
Short sales still represent great op-portunities for the buyer. In most cases, the approved price will still be below fair market value, the length of time to complete the transaction notwithstanding.
Real estate professionals should be educating buyers about the short sale process to create awareness and reasonable expectations. Once buyers un-derstand the time constraints and process, they can make better educated buying decisions.
Mario D'Artagnan is a broker associate with Miloff Aubuchon Realty Group, Inc. Mario is a former investigator for the Florida Real Estate Commission. He is also a former real estate instructor. Mr. D'Artagnan is a published author and has been a keynote speaker on the subject of agency law. Mario is also a veteran of the U.S. Air Force. For questions or comments contact Mr. D'Artagnan at: firstname.lastname@example.org or call 239-565-4445.