Hi folks. Over the past few years I have had some heated discussions with Investors about Short Sales. The biggest discussion is usually about price. Investors of course are out to purchase the Short Sale as cheaply as they can so they can turn around and flip it for a profit. Their argument of course is that the Seller can't receive any funds from the deal so the price shouldn't matter to them.
Of course, I totally disagree with this thought process. Sellers DO care how much their property sells for. And it does matter. It matters when they get stuck with a tax bill. It matters if they end up with a deficiency and a collector going after them.
Some Investors will argue this point until they are blue in the face. In fact they pretty much feel that real estate agents should stay out of the "property liquidation business".
And that my friends is where the problem lies. Investors approach Short Sales as a liquidation. Agents handle Short Sales as a salvage mission. We are trying to help our Sellers salvage what's left of their credit and dignity.
This is a fundamental difference that will always create a barior between Investors and Agents. At least that's my opinion. What's yours?
Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.
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Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.
Want to find out more? www.CentralFloridaShortSales.com
***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.
Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales, Orlando Florida Short Sales, Celebration Florida Short Sales, Winderemere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.
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I could not agree more. If investors are making those comments then they don't fully understand the possible tax ramifications for a seller doing a short sale. And helping to preserve their dignity? Yes
BB- I even feel this way about REO properties. Banks can still go after former owners for that loss too. As if it weren't bad enough that someone lost their home to foreclosure to then have collections hounding you and/or a tax implications on the bank's loss is like salt in the wound. I know buyers (not just investors) want the best deal they can get, but... for them to think sellers shouldn't care... pffft!
BB- I think Seller's care for the reasons you listed. Also, I think Sellers still have that emotional attachment to their property and want to sell with pride and dignity intact. Helping them get the most for their home goes a long way to that end. jay
Hi BB - I have had to have "the talk" with my short sale sellers too. They want to just get an offer - any offer - just to get out of the loans, and I have to remind them that the lower the purchase price, the greater the deficiency and/or taxable income. And I wouldn't trust any investor who tried to talk me into taking a lowball offer no matter what the consequences to the seller.
Investors are the first sharks to hit any depressed market. We have spent the last 18 months fighting through shark-infested waters to get homes for our clients. Time and again, we saw the home close, all-cash, for less than what we had offered. The Listing Agent often double-ended it, but more often it was another agent in their office.
Ethics need to prevail for this to stop happening Bryant.
Absolutely on the mark BB. Investor NOT EQUAL Realtor and vice versa. Two different goals - two different mindsets.
When it comes to investors, which I do work with, they only care about the bottom line period. There will always be a distrust between agents and investors.
I'm currently working 20 short sales.......all are being held up for some reason or another. The investors are still taking their time, the second wants more than the first will pay, the buyer gives up and we start all over, the sellers say "forget it" and lets the home go to foreclosure. When will the banks get off their butts and move faster?
You know what I find ironic is a little debate I had with a stock broker when the real estate industry was booming. He made the mistake of telling someone (within my hearing range) that real estate was not an investment! Needless to say, I interrupted their conversation in a split second. He quickly back-pedaled, but I wonder how he'd feel now when deciding where to invest his money, assuming he has a clue about short sales.
I think investors are necessary to moving this market along and getting inventory be it real or shadow moved along. We have alot of properties that need buyers. We have alot of folks stuck in their upside down homes and can not buy. We have very strict underwriting guidelines where loans are hard to come by! So along comes investors. Cash is King! That said, "the give me an offer, any offer" does come with problems when the 1099 comes along. Short sale sellers should be informed of the ramifications of that and know you do that. Some properties NEED the investors. Oh and that seller in the photo NEEDS to stage the home! lol
Amazing how our motivations shape our view. Investors need to understand that the sellers will have a life after the sale!
Right on the mark BB. Generally if I have a below market priced listing or a listing that might give that impression the investor calls will poor in.
When I offer any service associated with short sales and or foreclosures I am always met with reluctance. First and foremost it is the perception that there are no good buys offered by agents. The fact that someone would have to pay us is proof positive for most investors that agents listings are more expensive than what they could negotiate on there own.
All of the case studies in the world that prove that to be untrue will never change the investors perception.
My policy is to assess the strength and weaknesses of the buyer/investor. I do not work with bricks.
BB - Without sales associates as a catalyst in investor purchases it would lead to a slaughter of lambs by the wolves. In this market it's more resonating than ever. Of course it's good to be the referee in all transactions, sometimes we can't, although we could still call "foul".
BB - It's all about the money, and as little as possible when they buy. Of course the table turn when they go to flip. Ironic isn't it?
Jeff
Big B - Investors will always be trying to get the most of the least no matter the market conditions. An informed and educated short sale seller will do just fine with the right representation.
If I were interested in liquidation I'd watch ice melt.
Your state can have a collector going after a seller and I could see why you would want to get them the most. In Oregon we don't have deficiency. So, once the house has sold the bank is done with the seller except maybe a 1099 and most sellers don't have any tax liability by the time things are said and done because they didn't make enough that year or they would have been able to pay the mortgage. I do think it varies from state to state and you should always talk to a tax consultant and your lawyer first before proceeding with a short sale. But, from your point of view in your state, I can't argue one bit!
With the recent changes in Fannie Mae stating that if you do a short sale that they won't give you another loan for what 5 years now, a short sale almost doesn't make sense in that aspect. It will however do much less damage to a seller's credit than a foreclosure would. Not sure about the tax ramifications - personal residence owners get an IRS exemption and investors can simply tax a capital loss to in effect was out the debt forgiveness.
I agree thought that most of the short sale investors are scavengers and do not have the seller's best interest in mind.
The rules keep changing so much that I'm no longer certain if short sale is the best solution for sellers anymore.
This is just nature of the beast. Two opposing forces that will never meet in the middle ground. I think I recognize that house in the picture. LOL