Find out What Questions to Ask Short Sale Buyer's Agent
Most short sale agents are used to being asked questions, but few agents think to question the buyer's agent. Qualifying the buyer's agent in a short sale transaction is imperative because it's the missing part of the short sale equation.
It takes two agents, generally, to sell a short sale. A listing agent and a buyer's agent. The listing agent represents the seller. The buyer's agent represents the buyer. Some buyer's agents get carried away when a buyer says she wants to buy a short sale. They might put a purchase offer in front of the buyer and say, "Press hard, third copy is yours," without ever setting the buyer's expectations for the short sale.
It is difficult to manage a buyer's expectations but imperative that a buyer understand what is involved with buying a short sale. It's a lot different than buying a regular home for sale. Buying a short sale requires patience.
The Number One Question to Ask a Short Sale Buyer's Agent
It's not unusual for a short sale buyer to feel a bit insecure after writing an offer for a short sale. That's because the buyer doesn't know what happens next. The buyer wonders if she should start her loan or a do a home inspection, and the answer is neither of those things. The buyer needs to wait.
The number one question to ask a buyer's agent is how long will the buyer wait for short sale approval?
It might take anywhere from 4 weeks to 4 months to get short sale approval. Some short sales take longer than that to get approved. There is little reason to start the short sale process if the buyer is not committed to the transaction or unmotivated to wait. Buyers who will not wait past 30 days for approval should either buy a Wachovia short sale or buy a home that is not a short sale. Very few can get approved within 30 days.
Other Questions to Ask a Short Sale Buyer's Agent
As a listing agent, I often analyze and scrutinize offers I receive from buyer's agents. That's because I want my seller to go to closing. I know the signs that cause short sales to fail, and they can often be blamed on the buyer's side of the short sale. Here are sample questions I ask a buyer's agent before advising my seller to lock into a contract with the buyer.
- How many short sales has the buyer's agent closed? If the agent has closed more short sales than can be counted on two hands, that agent has experience managing a buyer's expectations. Buyers who freak out are in pain and want the pain to stop. To stop the pain, they want to cancel. An experienced agent will gently guide them to closing.
- Will you agree to not write any more offers for the buyer? My sellers insist that buyer's agents promise to not only refuse to write other offers but they expect buyer's agents to withdraw any outstanding offers the buyers have already submitted, which might be accepted. We don't let buyers write multiple offers to see which is approved first. They must wait for the home they want.
- Have you prepped the buyer to anticipate a counter offer from the short sale bank? It is standard procedure for a bank to approve the fees in a short sale. Not every fee the buyer expects a seller to pay is always approved. Sometimes, a buyer might need to agree to pay a fee that the bank will not approve or, more importantly, the bank might change the sales price.
- Will the buyer release the earnest money deposit? Sometimes, buyers do not want to release an earnest money deposit. They tend to take their clues regarding deposit disposition from their agent, and their agent might suggest that they hold on to it. We don't call these types of buyers a buyer. Because buyers release their earnest money deposit.
- Do you have a preapproval letter with a current date? I have seen agents submit preapproval letters and checks dated weeks if not months earlier than the purchase contract. That's a sure sign of trouble. Not only could the buyer be writing multiple offers, but the short sale bank sees an expired preapproval letter as a red flag that the buyer is not really qualified.
At the time of writing, Elizabeth Weintraub, CalBRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.