Can short sale flips be flops?
I was thinking about this article just last night. Poor me. Last night, I took out my blue (interview style) business suit and was preparing for the following today. I turned on the iron because I wanted to smooth out the pants just a little bit. But, I was in a hurry. I wanted to write a blog post, to give my folks a call, and to read a magazine. I wasn’t really in the mood to be preparing for the next day. I quickly returned to the iron and set it down on my pants for a split second and singed the crap out of the side of the slacks. My lovely blue interview suit, I wear it every time we sponsor a big business event. I had to throw the slacks in the trash because now they had a big burn/melt mark in the shape of a triangle on the side. I guess it serves me right for rushing and trying to take the easy way out.
What does this have to do with John Gittelsohn’s article and short sale flips? My office gets calls all the time on our listings from investors who offer to buyer them and handle the short sale negotiations—offering the listing agent a full commission without the headache. Some agents may want to take advantage of this business model. Sounds pretty good, right? You are guaranteed your full commission and you do not have to trouble yourself with the short sale negotiations, right?
Sadly, it doesn’t always work this way. Last year my office closed well over two hundred short sale transactions. We closed so many that I lost count. What I can tell you is that the investor buyer is looking for a deal because s/he wants to flip the property for a profit. The bank, on the other hand, is looking for a good offer, one that a buyer would generally make on a retail transaction—not the price offered on a distressed property.
If the short sale listing is habitable and will get offers from retail buyers, then it is going to be tough to ‘sell’ (no pun intended) the bank on a lower offer on this property. At the end of the day, the investor may move on because s/he did not get the purchase price that they had requested and you, the listing agent, will be left holding the bag. So is it a flip or a flop?
So much for rushing and taking the easy way out. Trust me; it’s not a good idea. That’s how I ruined my pants!
