What’s the truth about short sales and how can we make things better?

Every day I see and hear all kinds of stories about how some banks seem to rather go to foreclosure and others are really great at helping with the short sale process. The popular assumption seems to be that a short sale is a better option for the bank than a foreclosure.   It seems to me the process should not be that complex.

All banks should have a department that will answer the phone and proactively work towards realizing an arm’s length sale at the current market value. I will make a step by step list of what I think might work and maybe we can discuss how banks are actually doing it. Call out the banks by name; it would be great if they could learn from our blog.

• So, step one would be to determine what the property value might be. That way, the agent is not wasting time by marketing and showing a property with an unapproved asking price. The most cost effective way is through a BPO or two.

 

My understanding is that most banks will not even consider this until after you can produce an offer. It’s no wonder why so many buyers and agents wish they could avoid short sales altogether.

 

• Step two would be to market the property in the mls and as an auction. Today, a BidaBing online auction is inexpensive, effective, attracts more qualified buyers and offers the bank transparency that should make it easier to establish that they are receiving a bona fide offer.  Online auctions also allow you to set the end date, which is a great way to manage the time that a property sits on the market. Instead of forwarding one or two contracts per week to the bank while they wait for them to reach a number they like (and may not appraise for), one contract with a certificate that is the result of a competitive process should satisfy the bank. If time is money, this is a wining proposition for everyone involved, especially the banks.

The banks way of establishing whether they have a genuine offer is to request tons of paper work from the seller and several contracts from the agents. This seems pointless and inconsiderate to the all involved, and I mean the general public included – time is money them as well as for everyone from the buyers with whom they are playing with, to the tax payers who will be bailing them out for years to come. Although many agents are using some form of auctioning, and the banks are essentially conducting the most inefficient form of auctioning of all, the truth is that bringing buyers and product to one place, at one time is the best way to establish the current market price of anything. My point is that it doesn’t have to take months. It can be accomplished in days with a simple preapproval of the BPO.

• Step three would be to submit the winning contract and the certificate that shows the auction details from the approved buyer to the bank for final approval (of the preapproved price) and proceed to closing with no delays.

There you have it. This is my current life’s thesis. As a soon to be 20 year veteran agent and as the founder of BidaBing.com I share the frustrations of the current market condition. I hope that the work we are doing at BidaBing is embraced by the real estate industry as a whole and plays an important role in bringing a positive change to the only job I’ve ever known, helping people attain their very own home.

Advertisement