We’ve complained that the board of realtors has no short-sale guidance or enforcement.
Well, now they do. The North San Diego County Association of Realtors (NSDCAR) created a task force of local realtors who wrote a guideline package entitled, “Short-Sale Practices and Suggestions”, though they skipped over the most hotly-contested problems.
Unfortunately, they didn’t address the short-sale fraud. There is no mention of a) how many days to keep the listing active in the MLS, b) how to ensure that the home is available to be shown to buyers, and c) how to create an open and fair bidding process.
From page 6 of the listing-agent guidelines:
NOTE- this area of short sale practices seems to be the most heated and debated, with very different opinions, even among legal professionals.
THE PRACTICES LISTED BELOW AND THROUGHOUT THIS DOCUMENT ARE USED BY THE REALTORS® ON THE PANEL AND SHOULD NOT BE CONSIDERED AS LEGAL ADVICE OR RECOMMENDATIONS.
1) INITIAL OFFER(S)
- Present and review all offers with the seller.
- Remind seller that they are still the legal owners and have the right to accept, reject or counter any offer.
- Be sure that Selling Agent included a Short Sale Addendum with offer, signed by the buyer.
- If not, seller will need to counter form into contract.
Most lenders require a Fully Executed contract to be included in the Short Sale Request Submission. So sellers do/should accept an offer that is suitable to them.
It is the belief of this REALTOR® panel that the parties, the process, and the industry is best served when seller accepts and submits one offer from a committed buyer that is at a fair market price for the particular property/market.
TIP: If this is the first offer received and it is the “early” stages of the short sale process it is the opinion of this Task Force that the “will wait” date on the SSA should be at least 45?60 days from offer date. At the time of this draft, many lenders and Federal programs are seeking to reduce the review period. So in the future, this “will wait” date could be reduced accordingly.
TIP: Since most lender approval letters will name the buyer by name, it is important that the seller try to select a buyer that appears to be committed to the process.
TIP: Since any change to the lender’s net settlement will have to be approved, pay close attention to values, comps and appraisal issues when selecting the “best” offer to submit to the lender. Selecting and submitting an offer that is too high and will not likely appraise will cause issues and delays down the road and may even cause the short sale lender to close the file if you can not deliver the “net” settlement listed in its approval letter.
On page 8 of the buyer guidelines they mentioned short-sale scams, and touched on the problems we see daily. To summarize, they basically said, “Don’t be surprised if you get screwed”.
Good luck with those short-sales in the wild, wild west!!