- Is the agent experienced?
- Is the agent a neighborhood specialist?
- Does the agent possess specialized knowledge or has the agent received training for specific types of transactions?
I realize that all agents have to start in the business somewhere. Newer agents sometimes take offense when I suggest that buyers should hire an experienced real estate agent, but with the complexities of many transactions, mistakes are easy to make. That's why agents carry errors and omissions insurance. Call me old fashioned if you like, but I'm the kind of person who prefers to hire experience. Given a choice between brand new and eager or experienced and grumpy, I'll take the experienced and grumpy agent every day.
However, when it comes to hiring an agent to help a buyer buy a short sale, the bar goes up. That's because there are too many things that can go wrong in a short sale. The person best equipped to handle a short sale buyer is an agent who understands the listing side of the short sale transaction, and that person may very well be a short sale listing agent.
On a practical level, the buyer's agent in a short sale has virtually no involvement whatsoever in the transaction. The success of a short sale and its negotiation falls on the shoulders of the listing agent. The buyer's agent cannot contact the bank nor speak with the seller.
The buyer's agent comes in handy at the inception of the offer, by crafting that offer to protect the buyer's interests. That's because there are elements inherent in a short sale offer that are not present in a regular transaction. Agents who list and sell a lot of short sales can identify these elements for a buyer.
Typical Short Sale Buyer's Agent Duties
Generally, when a buyer writes an offer on a short sale, that buyer wants some kind of assurance that the transaction will close. Moreover, the buyer doesn't want to lose the home to another buyer or have the bank reject the buyer's offer. Because a short sale listing agent has first-hand knowledge of the process, a buyer may want to hire an agent with short sale experience -- and I don't mean hiring the listing agent of that particular property. Here are some of the things an experienced short sale agent will do:
- Verify the number of that listing agent's sold short sales to determine the agent's experience level. If the listing agent hasn't successfully closed very many short sales, that could be a red flag.
- Find out whether there are two loans on the short sale and the identity of the lenders. This information will serve to approximate the wait for short sale approval.
- Talk to the listing agent and ask whether the agent is negotiating the short sale or if it will be farmed out to a third-party vendor, which could cause delays.
- Ask whether the seller has a hardship. Without a hardship, it's possible the short sale could be denied.
- Run the comparable sales for the home because the list price could mean nothing.
- Eliminate the competition and the chances that the seller will send multiple offers to the bank.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.