Will The Short Sales Be Started By Traditional Real Estate Agents ?

Although both are involved in the same market, the estate agent and short sale realtor are 2 very different beasts.

The thing about real estate agents is that they work on commission basis. They try to sell the home at a really high price so that they get more commissions. The real price that the home is ultimately sold at is something which is agreed between the buyer and the seller and considering it is in the best interests of the seller to sell for as much as possible, this coincides with the wishes of the estate agent. Due to this, both the agent and the seller are probably to hold out for the higher price possible to maximize their profits.

Short sales are somewhat different though as the property has to be sold as a matter of urgency because the seller either can’t meet the payments, or they no longer want to pay a loan that's worth more than their property. Anytime a house is sold for less than the loan value, the lender must agree to this because they’re the ones taking the hit. The final choice on the cost that the house is sold for is now determined by the lender and not the seller. As a matter of fact, the seller has no decision in the matter and usually has no choice but sell to avoid foreclosure.

One thing that will turn lots of traditional real estate agents away from the short sale is that it may take a great deal of negotiating to come to a deal with the lender. They have to be able to strike a compromise between selling as high as they could, whilst encouraging the quick sale, to avoid the property from going into foreclosure and losing the deal altogether.

One of the chief problems that a conventional real estate agent will have with a short sale is the commission received. With standard sales, the commission is agreed beforehand at a set percentage regardless of the cost. Because however the lender is already agreeing to take a hit, they will be willing to pay significantly less in commission as they look to limit their losses further. The commissions in the instance of a short sale are paid by the lender and has to be agreed upon when the short sale realtor submits his proposal.

Many estate agents might shy away from the short sale because they pay lower commissions and it takes some considerable skill to reach a negotiation with the lender. It might even at times be a difficult sell for the agent because houses that are being short sold are probably to be in need of repair and maintenance as a result of the previous tenants not having the finances to maintain the property.

Additionally, a short sale realtor has to be licensed to do so which requires extra training and education, several may just not be legally qualified to do so. There are still a number of estate agents however who are qualified and experienced in the short sale and those who can short sell are able to take benefit of a market niche.
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