An excellent post nailing the reality between regular resale and short sale.
When I closed my first short sale in 1998 I had no idea that 10 years later I'd be doing them with any regularity. At that time, short sales were uncommon; they remained uncommon through 2006. Even in 2007, other agents needed to be educated about what a short sale was, how long it took to close, and what process the negotiation would entail.
Having closed dozens of short sales in the period since 2007 in Westchester and the surrounding counties, I now see a larger number of agents who are familiar with short sales. I also see a higher number of agents who bills themselves as "short sale specialists." In some cases, they have earned a designation. I applaud any agent who furthers their knowledge. However, designations can be misleading and may not help the client.
There is only one problem with an agent who calls them self a specialist these days, and that is this: they may not really be specialists. Designations mean nothing if you cannot successfully negotiate and close a workout. In Westchester, there are enormous numbers involved, and if a home seller cannot close on their short sale because their agent, well, stunk, they could be stuck with a lingering debt, or, worse, a deficiency judgment for tens of thousands of dollars. What's worse, if these sellers really knew how many short sales their "specialist" agent actually closed (often, between zero and one) they would be mortified.
The code of ethics strictly prohibits misleading clients as to the agent's scope of expertise. A special designation might circumvent an outright violation. But it doesn't protect a Westchester homeowner from huge problems if their agent can't get the job done. In many cases, the homeowner never asked the agent how many short sales they have actually closed. This is madness. I would never have eye surgery with a rookie doctor. Our obstetricians had decades of experience. The same goes for the guy that installed our pool table, water heater, and appliances. The reasons are obvious.
Yet people still do not ask their prospective agents how many short sales they have closed. You simply cannot be a specialist with no experience; I'm sorry. I don't care if you have a PhD or a photo shaking the Pope's hand. What they taught you in class simply isn't all it takes to handle the loss mitigation department of a lender. Sellers need to understand that if they hire an inexperienced agent to do their short sale, they do so at their own peril. I'd never want a surgeon cutting their teeth on my gall bladder, a lawyer apprenticing at the expense of my freedom, or an agent getting their feet wet at the expense of my finances.
Simply ask : "How many short sales have you successfully closed?" prior to listing your home. That will guide you far better than a patch on their arm. And if you are an agent who wants to get into short sales, work for someone who does them with regularity. I have often said that any agent can make money in short sales. However, 99% of them should be via a referral to a true specialist.
- J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service.
- Read my short sale blog here.
- J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
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- Agents: Subscribe to the 40 Somethings Group. Reach Phil at (914) 723-8900.All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission
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