When I start going over a buyer’s criteria, inquiring about bedrooms, bathrooms, location, and so on, many add, “Make sure to include short sales.”

Values have been rising and owners’ equity is increasing with it. That means, there are less short sales out there than there were five years ago.

Yet many buyers are under this naive idea that short sales are plentiful in the market and are total steals.

In the beginning of the market crash, it was a bit tough to get short sales accomplished. Banks took their time, and the sales were anything but short. The banks couldn’t handle the large amount of short sales coming across their desks, so it took a long time.

Then, they hired more staff, got more organized and short sales were moving right along. They were getting closed with ease and sellers quite often walked away with large amounts of cash! Why the banks were rewarding sellers for not paying them is a concept I will never understand.

Now, the market has increased and become more settled. More owners are able to sell as regular sales, and short sales are diminishing.

Yes, short sales are still around. The difference is, the banks are taking a harder stance and getting more difficult to negotiate with. They are even sometimes asking for more money than they are worth and not negotiating much with regards to inspections.

The thing I find crazy is a bank will often flat out reject an offer, or give an unrealistic counter-offer. That does nothing for the situation.

The bank isn’t getting paid on the property and doing nothing proactive, just prolongs that. The poor listing agent then has to figure out how to get a buyer at that price.

Here are two (unapproved) short sale situations that demonstrate this well. (Unapproved short sales mean the bank hasn’t reviewed the file and you do not know what they will accept for a purchase price. Approved short sales mean the bank has reviewed the file and gave a price that they would sell it for.)

I had an adorable 2/1 home in Miami Shores from 1939. We got a cash offer at $290,000 but the inspection found that there were structural issues (cracks all around the house demonstrating) and it needed a new roof.

Structural issues are no cheap fix, nor is a barrel tile roof. The buyer resubmitted the offer at $200,000 expecting the bank to counter. After the bank rejected that offer, the buyer raised to $220,000 but the bank still rejected it. The bank found the value at $270,000 and wanted $300,000. Oh and the best part? The house is set to foreclose in 20 days.

I had a 2/2 pool house in central Hollywood where the boyfriend destroyed the house. He took the kitchen out and the sliding glass doors in the back (they were now boarded up). We got an offer and the bank took five months to simply reject the offer claiming that they don’t feel the seller has enough of a hardship. She owed about a $100,000 more than it was worth. She had a steady income and moved in with a family member so the bank felt she should pay for it. The house is unlivable and she has no desire to go back there. She hasn’t been paying on it and does not plan to. The bank refuses to work with her and just lets her debt mount up.

So if you are considering short sales…

As a buyer, go for the approved short sales that the bank has already approved.

As a seller, make sure you do your homework up front before you take on a short sale. The title company or attorney handling your short sale should go over all your documentation before you even list the property for sale. They should be able to give you a realistic picture if you can show a financial hardship and how good your chances are with your situation and the bank(s) your loan(s) are with.

In my experience, I have had the best outcomes as a short sale listing agent when Town and Country Title Guaranty handle my short sales. They are the oldest title company in Broward County, have a staff of 31 employees and closed over 6000 short sales. Barbara Engel, one of the owners cares about helping people and goes out of her way to get the deal done. The office line is (954) 963-4740 and her email is barbara@tctitleinsurance.com.