I just started working on my 1st short sale deal. I just got the lead from an investor friendly realtor. Right now the house is still listed with the realtor.
My questions are: Doesn’t the realtor need to list the property as pending just in case a buyer comes along? And if the short sale goes through, how will the realtor be paid? Does the realtor need to be at the closing? And what other role, if any, do realtors have in short sales apart from listing it as pending and providing comps? Am I missing anything? Thanks.
If the listing agent has the property under contract he/she can only put it into a pending status if there is an accepted offer on the property. To list it as pending without an accepted contract would be a violation of the listing agreement as well as a violation of his/her agency relationship with the seller.
The normal way an agent gets compensated is the seller pays the agreed upon percentage or flat rate. In most short sales the agent will present an offer to the lender and ask them to pay the commission. The listing agent is the person between the seller, the lender and the buyer. Whether or not the agent is at the closing depends on the state you are in. For example, in California the closing is conducted by an escrow company in conjunction with a title company. Agents do not attend the closing nor do lawyers or principals.
Note that the term Realtor can only be used by members of the National Association or Realtors - a trade group. One can be an agent and not be a Realtor.
Thanks.
Caroline
Always put the Realtor commission to be paid at closing. I’ve never had a bank refuse to pay the commission, but if you have one Realtor don’t expect to get a full 6%. Even with two realtor’s you’ll often only get 4% to 5% approved for their commissions.
As for the role of a Realtor, it’s up to you the level of involvement they have. I generally will use a Realtor to assist in finding a buyer and that’s about it. I do everything else myself. The more control you maintain during the short sale process the better chances of success you have.
But you could list it at a certain discounted price, “PENDING BANK APPROVAL”, right?