7 Short Sale Selling Mistakes
Some short sale sellers are finding out the hard way that it's not easy to sell a home as a short sale. Short sales are a complicated process which, if not handled properly, can backfire and / or cause the sellers to lose their home through foreclosure proceedings.
Here are some of the common mistakes sellers make with short sales:
Short Sale Mistake #1: Priced Wrong
Short sale prices remind me of the story of Goldilocks and the Three Bears. Some are too high, some are too low and some are priced just right. Short sales that sell are priced appropriately. The price should be attractive to the following parties:
- The Short Sale Bank
- The Buyer
- The Buyer's Agent
- The Seller
- The Buyer's Lender
Appealing to all five of these entities may seem impossible to do, but it is possible. There is an art to pricing a short sale. I can honestly report that all my short listings in Sacramento -- in our soft market -- receive multiple offers, and they close.
Short Sale Mistake #2: Inexperienced Listing Agent
Particularly in falling markets, agents who have little business are attracted to short sales like moths to a flame. Sellers should find out how many short sales a proposed short sale listing agent has actually closed apart from the number of short sales the agent has listed.
If many of the agent's listings have been on the market for more than 90 days without an offer, something is seriously wrong. Agents who succeed in this business have a minimum of two years of experience negotiating with short sale banks.
Short Sale Mistake #3: Bad Marketing
Some agents believe pricing alone will sell a short sale, and they persuade sellers to place a ridiculous price tag on the home. Then the agent purposely refuses to adequately market the home. Not only does the price need to be reasonable, but the home deserves the same type of treatment as any other listing.
Short sales should be exposed to the widest possible pool of buyers, which means plastering that listing on all the major web sites, and includes doing direct mail marketing and networking.
Short Sale Mistake #4: Showing Restrictions
Buyer's agents, bless their overworked and tired hearts, will sometimes take the path of least resistance. If the listing requires an appointment, a buyer's agent might pass over that home in favor of a listing without appointment restrictions.
When a buyer's agent calls to announce a showing, the response should be, "Come on over. We're ready!" Short sale listings that restrict activity such as no showings on Sunday, for example, may never get shown at all.
Short Sale Mistake #5: No Photographs
Submitting a listing to MLS without multiple photographs -- or worse, no photograph at all -- is like slamming the door in the face of buyers. Buyers aren't likely to return. A listing with missing photographs sends messages that say nobody cares if the home sells and there's probably something wrong with it.
On some web sites such as Realtor.com, listings with the most photographs are ranked higher, and those without drop to the bottom.
Short Sale Mistake #6: Poor Property Condition
Short sale homes benefit greatly from home staging. Sellers need to prepare the home for sale and keep it in pristine condition. If beds are unmade, toys are scattered about and the kitchen sink is filled with dishes, buyers can't see past the mess. Moreover, some buyers are worried that if the home is in disarray during a showing, the sellers may trash it upon vacating.
Short Sale Mistake #7: Uncooperative Sellers
Sellers need to submit required documentation to the bank in a timely manner. If the package is incomplete, the bank won't process the file, and that will delay approval.
If a seller refuses to submit personal financial information and a reasonable hardship letter, the seller will not qualify for a short sale.