You’ve decided you need to short sale a home, now what? You need to know how to pick the best real estate agent for the short sale. (For argument’s sake, the terms broker, agent, and Realtor are interchangeable for this article). Here are the only things you need to ask the agent, and the 5 things you don’t need to ask.
- Is real estate their full-time profession? If they say no, or answer “mostly” or “for the most part”, etc., run for your life. You want a successful agent and only full-time real estate agents are successful. You do not want an agent running off to wait tables instead of submitting paperwork to the bank.
- Have you ever successfully negotiated and closed a short sale with either Bank of America, One West Bank, or CITI Mortgage? If real estate agent completed and closed a short sale with any of these banks, they will definitely have the persistence you need. These banks are notorious for not communicating, extremely long approval times, and the worst systems for handling short sales. Bank of America is hands down the worst of the three. Their new marketing phrase should be “If you are not in foreclosure yet, we can help.” In all seriousness, any Realtor who can deal with these institutions is very capable.
- Should I stop making my payments? This gets a little sticky for real estate people. Ultimately, this is for you to decide. If they don’t tell you directly, don’t be surprised. I have not met a short sale yet where people continue to make their payments. There are some circumstances where this is not the case, but 99 times out of 100, people stop making their payments. Many banks need you to miss payments on the loan for a particular property before they even consider a short sale.
- How long does it take to get an approval from the bank? If the real estate agent answers anything other than “It depends” or something to this effect, they are not giving you right information. There is no hard and fast time line for approval. It could be 60 days, it could be 6 months. It all depends on which bank you deal with and who the bank assigns to the file. If they answer this correctly, believe them.
- If I sell for less than I owe (which you are doing), will I be responsible for the difference between sale price and what I owe? They cannot answer this question. If they don’t tell you to check with a CPA or real estate tax attorney, they are overstepping their bounds and are likely to give you advice outside of their ability throughout the process. However, they may tell you they have seen certain situations play out in certain ways. This is acceptable, as long as they recommend you speak to a CPA or tax attorney.
Here are 5 irrelevant questions:
- How long have you been in the business? Doesn’t matter, they still are. The economy and housing decline pushed most people out of the business. If they are in business now, how long they have been in it, is irrelevant.
- How much commission do you charge? Doesn’t matter. In a short sale, the bank will pay the commission and dictate the amount of commission paid.
- How many agents are in the real estate office you work in? Doesn’t matter. This is the internet age. Most of the time a real estate agent outside of his/her office will bring the buyer. You are hiring strictly on what this person knows about short sales.
- Will you do open houses? Open houses generate buyers for other properties. You want a real estate agent working on the bank before they foreclose.
- How many of listings do you have now? Again, doesn’t matter. Listings generate activity and buyers. If you are the only listing, you know you will have undivided attention. If you are one of many, you know the Realtor will be in business long enough to sell your home.