Tips for buying a short-sale

kitchen in need of repair
Some kitchens need a little TLC.
Knowing the problems of short-sales, I have developed a strategy to avoid some of the worst of the pitfalls. If you're in a hurry don't even consider a short-sale. Short-sales work best for investors who have no emotional attachment to a property. Short-sales work well for investors who won't need to live in the home. Short-sales don't work well for home-buyers who are on a schedule. If there are multiple offers on a property, walk away. If you make an offer on a property with multiple offers there are only two possible outcomes:
  1. You waste your time pumping up the price for someone else;
  2. You paid more than anyone else. If you paid more than anyone else, you didn't get a bargain.  If you paid retail for a short-sale, you paid too much.
Find out if there are multiple offers or worse yet contracts before you even look at the property. It's maddening and I wish the associations would do something, but too many properties that are listed as "active" aren't really active.  There is no sense looking at something that isn't for sale. Walk away from unethical, unprofessional agents, as these are the agents who are most likely to sanction last minute contract adjustments that cost you money.  Here are some clues you'll find in the listing that might indicate that the agent is unethical or ignorant:
  • The remarks contain very basic English spelling and grammatical errors.
  • The remarks solicit a specific title company. Agents and brokers don't make money off title companies. It's against the law for us to make money from title companies. It is inappropriate for us to solicit
  • a particular title company.
  • The remarks talk about agent commission. It is inappropriate for an agent to talk to the general public about what we make.  I couldn't care less if you know what I make, but if an agent puts commission notes in the remarks the agent clearly is ignorant or unethical.
  • As a member of the buying public you cannot see the commission, but your agent can see what the stated commission is. If the commission is listed as 50% or 50/50, then you're probably headed for trouble.  MLS rules require that the seller state his commission when offering the property for sale.  An agent who sanctions flexible terms is an agent who believes in the idea of flexible contracts.  The very reason for a contract is to establish the terms: not to leave the terms open so that one party can change them at the last minute.
What can we do as agents?  I now report every bogus listing to Compliance. Every single property listed as active that is not active, I send to MRIS.  Every single title solicitation: I report to compliance. Every flexible commission I report to Compliance. It's a royal pain to complain and report, but I take the time to do this because I take serious my duty to the public.  I really wish an authority figure would take the time to clean-up the mess, but until then I will do the best I can with what I am given.

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Condo Sales Tips,

Will Nesbitt

View posts by Will Nesbitt
Will is the principal broker of Nesbitt Realty and Condo Alexandria. He is licensed in anywhere in the Commonwealth of Virginia, but focuses on those communities found in and around Alexandria, Arlington, Mount Vernon and Springfield/Franconia. Will has been involved in real estate management, sales and investment for more than twenty years. He is a veteran of the U.S. Army. While in the army, he studied Russian at Monterey's Defense Language Institute. He is also a "veteran of the dotcom wars" and built most of the sites associated with NesbittRealty.com Will currently resides in Belle Haven Estates just outside Old Town, overlooking New Alexandria. He is a former president of the Mount Vernon Youth Athletic Association and founded the Alexandria Fun with Friends Group. Will is the author of BattlestorM, a tabletop fantasy game, which was published by Ral Partha Publishing in the late '90's, and Arthur's Realm, a boardgame available at the Gamecrafter.