I just read to be leery of short sale realtors... true?

[moneytree]

Interesting, as I knew this lady was a snake. She now has 2 listings on one block, for a short sale home. Or I guess I should say, they were short sales, but never sold. I still need to find out her response to the couple raising the price to avoid a short sale, since their atty advised them a foreclosure is best (probably due to their 2nd mortgage?) I know this is vague here, but it's a continuation of my other posts about if the couple should file a ch 13 now or later or never and letting their 1st home go into foreclosure. Long story short, they were able to get another mortgage due to medical reasons, not provide documentation to the new lender as to what their intentions were with the 1st home (rent, etc) and then try to sell home #1 in a short sale. Homes aren't selling out here 'either' so their 2nd mortgage of 17K people are hounding them. And one spouse refuses to file and let go of the 17K 2nd mort. as well as 36K in unsecured cc debt.

I'll post what this realtor had to say about the price increase when I find out. I just feel that she was in a hurry to rush this couple into a bad situation. It's creating a lot of stress that could have been avoided!

Also, ironically, the new bank, with the new loan (who didn't care about the eventual upside down house) works hand in hand w/ this expert short sale realtor. How can I believe that she wasn't in this to screw this couple over and make $ for herself and her banker friend???

[HHM]

Yes, be leary of short sale realtors

1. They are not attorney's, so they really have no idea what the implications are of the short sale contracts that they are pitching to customers (in many cases, IMO, they are practicing law without a license when they discuss short sales with potentional customers)
2. They are merely trying to get a commission. (nothing wrong with that per se, but when combined with #3..)
3. There is NEVER a benefit to the seller for doing a short sale.

[PoorGrammyinBK7]

Yes, be leary of short sale realtors

1. They are not attorney's, so they really have no idea what the implications are of the short sale contracts that they are pitching to customers (in many cases, IMO, they are practicing law without a license when they discuss short sales with potentional customers)
2. They are merely trying to get a commission.
3. There is NEVER a benefit to the seller for doing a short sale.

As a realtor, I agree with you on all three, pretty much (not totally sure on # 3). There possibly may be some cases where the seller is better off with a short sale --- but because of #1 above, I wouldn't know!

I do have friends who attempt this, primarily because of #2 (its their livelihood: no sales = no commissions = no income and usually a loss financially as expenses still have to be paid). But I don't get into it.

However, OP, don't assume that lady is a "snake". She has bills to pay too and like HHM said in his #1 - she probably does NOT know the implications.

[MGBK]

Sorry PoorGrammy, I now put realtors(r) (hehe) in the same group as mortgage brokers, used car salesmen, politicians and Enron executives. Realtors helped to create this problem with the ridiculous "buy now or get priced out" mantra. It was always about the commission, that is all.

Now they are having their cake and eating it to buy capitalizing on the misfortune they helped create by selling short-sales for banks. It reminds me of that movie "Breastmen" which chronicled the true story of the Drs who invented the breast implant. When the fit hit the shan re: the silicone implants they then went into the business of REMOVING the same implants they had previously put in -- and made MORE money doing that than they did implanting them!

Further proof of the slime factor: I just learned from a local realtor(r) (don't want to get sued so I include the R), that often realtors(r) will list a short-sale for an amount significantly lower than what the bank as indicated its lowest acceptable offer is (the example I was given was a list price $75,000 LOWER thant the bank's stated floor). The scheme is to lure in buyers on the idea of a "fire sale" and then force them into a bidding war once they fall in love with the property. I am sure it is legal, but it is far from ethical.

So keep that in mind for anyone thinking of bidding on a short-sale property.

[PoorGrammyinBK7]

Sorry PoorGrammy, I now put realtors(r) (hehe) in the same group as mortgage brokers, used car salesmen, politicians and Enron executives. Realtors helped to create this problem with the ridiculous "buy now or get priced out" mantra. It was always about the commission, that is all.

Now they are having their cake and eating it to buy capitalizing on the misfortune they helped create by selling short-sales for banks. It reminds me of that movie "Breastmen" which chronicled the true story of the Drs who invented the breast implant. When the fit hit the shan re: the silicone implants they then went into the business of REMOVING the same implants they had previously put in -- and made MORE money doing that than they did implanting them!

Further proof of the slime factor: I just learned from a local realtor(r) (don't want to get sued so I include the R), that often realtors(r) will list a short-sale for an amount significantly lower than what the bank as indicated its lowest acceptable offer is (the example I was given was a list price $75,000 LOWER thant the bank's stated floor). The scheme is to lure in buyers on the idea of a "fire sale" and then force them into a bidding war once they fall in love with the property. I am sure it is legal, but it is far from ethical.

So keep that in mind for anyone thinking of bidding on a short-sale property.

I totally understand what you are saying, but I never said there were not some "snakes" out there in the grass! There definitely are - and it can be a very cutthroat business.

But all realtors are not equal. There are also some honest ones - and some who weren't even working real estate when the ridiculous jumps in prices were going on in the last 5 years (like me). I am just saying there are some really good people who are realtors as well. And yes, they work on commission, with many expenses and much time spent, often with no results at all. They are among the hardest hit by this economy. Many are having no choice now but to BK - AND to be out there competing with the rest for a job!

And by the way, realtors do not set the prices - they only suggest. Homeowners who wanted too much profit, and "flippers" who thought they were gonna turn around a quick, easy profit, etc were also part of the problem.

[MGBK]

I totally understand what you are saying, but I never said there were not some "snakes" out there in the grass! There definitely are - and it can be a very cutthroat business.

But all realtors are not equal. There are also some honest ones - and some who weren't even working real estate when the ridiculous jumps in prices were going on in the last 5 years (like me). I am just saying there are some really good people who are realtors as well. And yes, they work on commission, with many expenses and much time spent, often with no results at all. They are among the hardest hit by this economy. Many are having no choice now but to BK - AND to be out there competing with the rest for a job!

And by the way, realtors do not set the prices - they only suggest. Homeowners who wanted too much profit, and "flippers" who thought they were gonna turn around a quick, easy profit, etc were also part of the problem.

Hi Grammy. I realize realtors(r) aren't the only players in this problem, but I feel many (not all) encouraged the bad behavior at the time because it benefitted them. Now those same snakes are "double dipping" and profiting off of misery. But yes, sill homeowners also drove up prices too so there is plenty of blame to go around.

[hereforinfo]

I realize realtors(r) aren't the only players in this problem, but I feel many (not all) encouraged the bad behavior at the time because it benefitted them.

How about all the people who took out mortgages they couldn't afford? Or opened up a HELOC a year later to use the equity to buy new cars and live beyond their means? And all the buyers who overstated their income and assets to qualify for a loan? And the banks who mispresented all the subprime loans and crashed our stock market? Where's the personal responsibility?

Sure realtors wanted to sell homes and make commissions but they also believed, just like the rest of us, that prices would continue to rise. Blaming the realtors is like blaming the gun instead of the person pulling the trigger.

[HHM]

How about all the people who took out mortgages they couldn't afford? Or opened up a HELOC a year later to use the equity to buy new cars and live beyond their means? And all the buyers who overstated their income and assets to qualify for a loan? And the banks who mispresented all the subprime loans and crashed our stock market? Where's the personal responsibility?

Sure realtors wanted to sell homes and make commissions but they also believed, just like the rest of us, that prices would continue to rise. Blaming the realtors is like blaming the gun instead of the person pulling the trigger.

I have to disagree on this one; anyone that has followed my posts, I am all about personsl responsibility, but at the time, the decision to borrow against existing equity was not a bad decision (or at least it was not an unreasonable position). Honestly, if someon approached you and said, "hey, I can get yo $50K and you only need to pay me $500 per month (and assuming the person could afford the $500 per month), is that unreasonable.

[hereforinfo]

If the person used the equity/heloc to fund vacations, buy expensive cars, and generally live beyond their means, then yes I do think it's unreasonable. I'm not saying it was always that way, I'm sure many people thought they could pay them back or refinance and then the bubble burst and they got stuck holding the bag. Understandable.

I just think a lot of people were irresponsible with those equity lines and the rest of us are paying for it. Like all the speculators/investors in my area who bought preconstruction. It would take a year to build, and by the time a house was finished it had gained $200k in equity. This worked well for people the first few years of the boom, but toward the end the market slowed down and people couldn't sell those investment properties, so they'd take out HELOCS on the equity while the house was on the market; eventually they foreclosed, but the borrower had already walked away with the cash from the heloc. And there is someone I know who didn't work for a few years (by choice) and lived off their HELOC, then foreclosed and filed bankruptcy. Those are the scenarios I'm talking about.

[moneytree]

Their 'short sale' realtor is back from her vacation & MIA...

Yep. No response back from their realtor. What realtor doesn't want to get back to their client??? She profitted off the sale of house #2 and obviously is trying to wash her hands clean from the situation since the couple has no choice, but to foreclose & not continue w/ the short sale. I suspect she's nervous too, because an attorney is also in the picture. I knew she was up to no good from the moment I saw her rushing to get this couple to sign on the dotted line & rush into getting a house! As I mentioned before, I was the only one to tell her to her face that I thought what she was doing was fraudulent. Her silence only proves my case. -More to come!

[moneytree]

The realtor finally responded! See what you think...

How ironic that she claims she doesn't have a voice. Yeahhh righht. Secondly, she's rather convincing with the short sale advice. I also find it amusing that she would try to override what an ATTORNEY has to say. I was also told today that the contract with this flighty realtor is due to expire on 1/31/08. Seems like she can't even get her dates right. An appt. has been scheduled w/ the atty again to go over the realtor's contract, and get away from this realtor asap. It's a struggle to try to direct this couple in the best direction possible (having BTDT). I do believe though that they will continue with the foreclosure. But oh...breaking news...the DEED IN LIEU conversation has come up today and thanks to this board, I was able to advise in "fat chance that will happen"...as someone wrote this is impossible to get a bank to agree to. Foreclose or deed in lieu? What do you think. But first, here's the 2 emails. All names have been removed. Thanks.

[B]They sent this to their realtor last week:

I took your colleague's advice & met with an attorney today. He advised against us doing a 'short sale' saying it would be better to let the house go into foreclosure..which the process already began on 12/9. He said by doing a 'short sale' that the 2nd. mortgage co.will get a 'small cut' but they will come after us for the remainder & they will garnish wages,etc. So that settles it.. NO 'short sale'..we are done with this! (No-one is interested in the house anyway due to the rotten economy!)

The attorney said to keep it on the market if we want, but your colleague said the price has to be raised in order to do this. I don't see how this will be possible but if you want to try the price increase, we will do that. I do think it is time to 'shut off' utilities? If there was 'activity' we would keep them on but it does not seem to be worth it anymore.

Here is what your colleague had me do to come up with a figure:

$264,751.37 amt. we owe
7,128.12 4 mos. of mortgage payments (@ $1,782.03/mo)
285.12 4 mos. of late fees (@ $71.28/mo)
$272,164.61
+ 24,494.81 9%
$296,659.42 TOTAL (if I figured correctly, this is what we'd have to raise the price to.)

We are not delinquent on anything except the first & second mortgages, which is bad enough, so we will just leave well enough alone & not even consider filing bankruptcy. We will make it through this somehow.


After a week long silence, here is the 'short sale' realtor's reply: (also, she is ALWAYS complaining that she is SICK with something!)

I have a very sore throat and no voice. )Squeak! sQUEAK!) It is too cold outside for me after being in {warm island}. You emailed me last Wednesday but I was not back until Saturday. I am working from home today because I am not feeling well still--a bit of a fever!
I am not understanding why you do not want to try to shortsale your home now that you have your price worked down to market. I do not think that you will be asked to pay a deficiency judgement, but worse case secenerio is you refuse to do the deal if the second asks for a deficiency judgement. If it does not shortsale, then the second gets ZERO. If it short sales, then they get whatever the first says they will get. If they want a deficiency judgement and you refuse--they know that they get ZERO. I know you say that an attorney says they will give you a deficiency but I have not seen one lender on a second to ask for a deficiency judgement in a year. First of all, they have to pay a fee to apply for the deficiency judgement
and second of all I think that they want to just get what they can and move on. Otherwise, I do not know why I have not seen any lender ask for one. We also can write in your paperwork that you will not close the transaction if there is a deficiency judgement.
It makes no sense to raise your price to $300,000. Your two choices are to leave it on the market a a shortsale or to take it off the market and let it foreclose. I do not know why you would not wnt to try when you have the price worked down to the appropriate market "zone" now and the interest rates are now starting to drop dramatically so that there will probably be many more buyers after the "deep freeze" and Christmas is over.

[PoorGrammyinBK7]

moneytree,

I don't know about your state, but most real estate listing contracts that I have seen can be withdrawn at any time by the seller, so they shouldn't have to wait until expiration if they don't want to sell the house or don't want to use that realtor.

[HHM]

The realtor may be right that the lenders are not actively seeking the deficiency balances, but what she is leaving out is the deficiency must be dealt with in some manner.

We are starting to see the deficiencies get sold to Junk Debt Buyers. Just because the lender may not want to actively collect it, doesn't mean the debt is not collectible. If the debt is foregiven, then, of course, there is the tax consequence.

In any case, there is not benefit to the seller, so why do it.

[hereforinfo]

From her reply it's obvious the realtor has no clue what she's talking about.

[moneytree]

Atty advised them to do a ch7 & give the realtor the boot

The atty said what I said and that what she did was kind of fraudulent! lol Anyway, good news is that this couple has decided to file a ch7, but only in the wife's name (husband is stubborn...lol). I'll post an update about that in the ch 7 section.

Atty said to just tell the short sale expert realtor that they've decided to take the house off the market. End of subject. I am so glad they'll be done with her. She didn't bring 1 person into that house and she did not work for them. She was a constant no-show and broken promises.

Ok...so cheers to another start of a ch7 petition... lol