Why Buyer’s Agents Ruin Short Sale Deals



One word…ego.

And the factor that amplifies this ego is the unfortunate fact that we are in a buyer’s market.  Buyers and their agents know that for deals to be successful, their offers are needed.  They know they hold all the cards and that sellers and foreclosing lenders alike are desperate for those short sale offers to get the property off of their desks.

The problem that I am finding is that these buyers’ agents are making promises to their clients such as: “it’s a short sale so we can close on the day of your choosing, “the bank is foreclosing so you will get an absolute rock-bottom price for this house”, or “you can get all of the repairs paid for by the bank”.  The more I think about it, it may not be the buyers’ agents “ego”, it just might be there willingness to work for “FREE” or just that they are truly untrained!

Sound Absurd?  Of course it does!  But does it actually happen like this?  All the time.  I don’t tell you this to discourage you, but to let you know what to expect.  In some cases you may have to swallow your own pride and do what you can to meet their requests.  In others you may be able to take a stand and refuse to cater to them.  Either way, understand that it will likely occur.  But also understand that there are ways to diffuse it, and potentially eliminate it all together.  A couple of good initiatives to take are to…

Set expectations – make sure that the minute a buyer’s agent calls to inform you of a written offer, that you explain to them exactly what is going on.  They need to know:

• that it is a short sale and so they’ll have to wait on average 2 to 4 months before they can close

• there is no guarantee that they’ll get the property

• that their offer is subject to lien holder

• that the lender may not approve all conditions of their offer (i.e. seller concessions)

• that they’re buying the property “AS IS,” meaning it’s unlikely the foreclosing lender will pay for repairs

• most lenders will only allow a MAX of 30 days to close after they send out the written approval letter

• they should start pursuing their mortgage commitment before written approval is issued on their offer

This may seem like a lot of information to throw at a potential buyer from the beginning, and you may be worried that it will scare the buyer off, but if you don’t set clear expectations right away, then all you’ll do is waste your time working on the short sale only to have the buyer walk later on when you hit them with something they had no warning for.

Seek to build rapport with the buyer/buyer’s agent – this is important throughout every part of the short sale process, but also comes into play here.  Probably the best way to get started in building rapport is to set the proper expectations and be upfront at the very beginning of the short sale process. People do not want to be misled, so if you tell them what to expect up front they will have the utmost respect for you in the end!

And so to revisit an earlier question…are buyer’s agents excessively demanding when it comes to short sales?  The answer is overwhelmingly “yes.”  And unfortunately that is something that we’ll have to deal with as part of our game, since we are in a buyer’s market.  We have to put up with the egos out there that tell their clients they can get them a house that’s worth $250k…for $175k.

However, it is possible to get buyer’s agents to work more cooperatively if: their client’s expectations are clearly met right from the start and you’re successful in building rapport.  And if those conditions don’t appeal to the buyer, then at least you’ll know you won’t be wasting any time since it’s likely that the buyer won’t be following through with their initial offer.

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