This document discusses the delays that often occur when dealing with foreclosures and short sales in real estate. It notes that "time is of the essence" contracts do not always apply in this context due to overwhelmed lenders. The document outlines one agent's experience over several months submitting multiple offers for a client that were declined or resulted in long waits for responses from lenders. It recommends setting realistic timelines upfront and discussing commissions carefully given the unpredictability of short sale and foreclosure timelines.

1. Real Estate Hot Topic
Time isn’t of the Essence in the World
of Foreclosures and Short Sales
by Marki Lemons, CRB, CRS, ABR, ABRM, CRMS, MBA
Instructor, REALTORS® Real Estate School
E
veryday, I receive phone calls and emails from REALTORS® inquiring about the
delays in the contracts they’ve presented on properties in foreclosure or an REO.
REALTORS® are grounded in the belief that “Time is of the Essence.” This
philosophy simply means that REALTORS® and their clients will perform within a time
limit specified by a contract or within a reasonable time if there isn’t a specific date for the
performance outlined in the contract. I wish that this concept was followed by a world now
inundated by loss mitigation specialists and asset managers. I do ask REALTORS®
to use empathy and not judgment when dealing with lender employees because they are
overwhelmed by the abundance of new foreclosure filings and the fact that some employees
are already handling up to 1,200 files.
Real estate is a fast-paced world full of contracts, negotiations, and going submitting the offer, we finally received word that there were other
to the closing table. Finally, REALTORS® can take a long lunch and a offers (cash) and that the listing agent was waiting on a response from
walk in the park because you might have to wait months just to get an the lender. Much to my dismay on April 21, I received a phone call
executed contract. from the listing agent who stated that the other deal didn’t work out
and that she would send me the lender addendums. My client was livid
To paint a realistic picture, I have a short sale listing that was submitted because when we did receive the addendums on April 22, they stated
to the lender via fax and overnight mail on March 7. Three weeks had that she needed to sign everything and submit with a cashiers check in
passed before the lender acknowledged receipt of the short sale package. 24 hours. She decided not to submit a new offer with the addendums
The lender ordered two Broker’s Price Opinions and informed my client because she felt like she was second choice and she and the lender were
on April 22 that they wouldn’t pay for a survey, termite, zoning on an uneven playing field.
certification, water certification, or any outstanding water bills. My client,
the attorney, and I have had weekly communications with the lender. Now is the time to revisit an old skill set (initial buyer and seller
On May 1, we received a counter-offer to the contract and the lender consultation) in order to have a successful transaction. First and foremost,
wanted a response on or before May 5 and they wanted the purchaser set a realistic time frame for the buyer and the seller before entering into
to close by May 31. an executed contract. Commissions are negotiable and should be
discussed with all parties. Listing agents need to discuss commission with
Representing the buyer doesn’t make for an easier transaction. I love all buyer agents prior to the exception of a contract because commission
working with buyers, and I use the skills acquired through the ABR will be determined by the lender and not the homeowner with whom the
designation courses to attract buyers looking to purchase short sale and REALTOR® has the listing agreement. Buyer agents should dra sales
REO properties. Distressed properties o en have deferred maintenance contracts that allow their buyers to cancel the contract if they haven’t
or have been vandalized. To ensure that clients can close according to the received a response by a certain date or they have the right to rescind the
terms of the contract, it’s important to have them preapproved by a offer. Remember, listing agents are waiting just like you. Short sales and
purchase-rehab lender. REO aren’t for everyone but, patience will be the best skill set to develop
if you plan on doing business in this new niche.
Taking extra steps won’t guarantee you a smooth deal. One of my
clients has been pre-approved and has saved her money to purchase a Marki Lemons, crb, crs, abr, abrM, crMs, Mba, is a member of the c.a.r. board
home where she wants to create sweat equity. We have submitted six of Directors and an instructor at the rEaLTOrs® real Estate school. she is a certied
contracts over the past two months. On March 22, we submitted a residential broker with rubloff. Lemons teaches an introduction to short sales course at
contract for a property in Englewood. I faxed the listing agent twice, c.a.r. visit www.chicagorEaLTOr.com/education for more information.
emailed her four times, and called a half of dozen times. Six days a er
20
Chicago REALTOR Magazine
®