What Are the Top 3 Factors for Hiring the Best Short Sale Agent?

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Question: What Are the Top 3 Factors for Hiring the Best Short Sale Agent?

A reader asks: "My wife and I are having a disagreement over which agent we should hire to do a short sale. She likes the agent who sold us the house and wants to hire that agent. I would rather we hire an agent from the city who specializes in short sales. My wife's agent doesn't seem to have a lot of experience with short sales, but she does sell a lot of homes in our suburban enclave. What should we look for to hire the best short sale agent? Which is more important, experience in short sales or experience in our neighborhood? We already made a mistake buying this home, and we don't want to make another mistake now."

Answer: Only a greedy or naive agent would disagree with the premise that a short sale specialist trumps a neighborhood specialist. I'll bet if you cornered your wife's agent and questioned that agent about what is really best for you, the answer would be more evident.

Although not every real estate agent is a REALTOR®, the REALTOR® Code of Ethics prohibits an agent from working outside of the agent's specialty. Some agents might argue that neighborhood experience lays the groundwork for a specialty. However, the difference between a short sale and a regular equity transaction is too great. If you have to choose between a neighborhood agent or a short sale agent, take the short sale agent, but try not to go out of area.

By out of area, I mean outside of your metropolitan area. For example, if you live in southern California, you should not hire a short sale agent from northern California. You should not cross state lines.

Try to hire a local agent within your MLS area.

#1 Factor for Hiring the Best Short Sale Agent:

Experience in Short Sales

Don't be bamboozled by a slick, fast-talking real estate agent who might claim to be a short sale specialist. It's very popular in some areas for agents to call themselves a short sale specialist after taking a short sale class.

A short sale class, even one which results in certification, does not make an agent a short sale agent.

For example, you will find agents who were selling short sales before certification classes existed. Some certification companies are in business solely to solicit money from agents in exchange for handing over a certification. There is often no guarantee the agent has learned anything nor that there is any significant knowledge to be gained from the certification instructor. Real estate designations can be meaningless.

Experience in short sales means one thing: experience closing short sales. The number varies with the opportunities available in any given area. I cannot tell you an agent who closes one short sale a month is worse than an agent who closes 20 short sales a month, except that the agent who closes a greater number mostly likely has more experience -- experience that could benefit the seller.

#2 Factor for Hiring the Best Short Sale Agent:

Experience with Short Sale Bank

Watch out for agents who may overstate their behind-the-scenes' contacts at any given bank. Bank employees come and go like a revolving door. Especially be skeptical of agents who claim they have a hotline to a government agency to fight taxation or deficiency judgments because there is no such hotline.

Not to mention, agents, for the most part, are not lawyers.

If your bank is a small-time oddball institution, you might have a hard time finding an agent who has experience with that bank. But most competent short sale agents have worked with the top 4 major banks such as:

  • Bank of America
  • One Main Financial (formerly Citimortgage)
  • JP Morgan Chase
  • Wells Fargo Bank

The advantage to hiring a short sale agent who has closed short sales with your bank is that agent might have gained valuable insight into your bank's ​short sale process. However, bear in mind that although banks routinely change their short sale forms and policy procedures on a regular basis, your agent should have on hand the forms you need to complete, such as the bank's third-party authorization.

#3 Factor for Hiring the Best Short Sale Agent:

Experienced at Selling Homes in Your Town

If you can hire a short sale agent who has experience with your bank, you are 10 steps further ahead than the guy down the street with a for sale sign stuck in his yard for a year.

If you can find an agent with the top 2 characteristics, plus the agent has sold other homes in your area, you have struck gold. There is no better combination than an agent with these top 3 characteristics.

Not only does an agent need to know how to process a short sale, head off potential problems before they pop up and negotiate with your bank, but a short sale agent must know how to keep a buyer interested in waiting for short sale approval and how to best market your home to the available pool of buyers.

On top of this, the agent must be able to appeal to buyers who will want to buy in your area and be familiar with local custom. Moreover, it helps if your agent is well known in your neighborhood. A well-respected agent will get along well with other buyer's agents and will make buyers feel comfortable enough to write an offer to buy a short sale. But the number one reason a short sale with experience in your neighborhood will be beneficial is because that agent is likely to guide you to price the short sale correctly.

At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.