To anyone who has attempted the short sale process themselves, they know it’s tedious, frustrating, complex and sometimes, a complete misallocation of precious time. For the novice, this is all too well understood.
In essence, the short sale is a re-underwriting of the loan though for the obvious reason of understanding the borrowers qualitative and quantitative reasons for default. Ideally, this process is understood best through the mortgage origination example and finds strongly aligned parallels in that origination process. For example, the borrower’s pay stubs were likely (though not in all cases) used as one method to underwrite income and demonstrate affordability. In the short sale, the pay stubs play a role in establishing, quantitatively, that the borrower cannot support the mortgage any longer, thus underwriting “unaffordability”.
As with mortgage origination, the skill sets, time requirements, processes, systems and paperwork to “originate” a short sale are completely different and separate from the “traditional” real estate agent work requirements. That agents have taken on both sets of work is only the result of necessity, not the proper alignment of skills to the multipart tasks at hand.
The frustrating though inevitable result born from this “transaction on top of a transaction” is that agents unavoidably jump into the deep end and produce an atrocious close ratio for short sales. This is absolutely avoidable.
In economic circles, there’s a theory called Division of Labor. The idea here is that in a group of people, person A will do something better, faster, smarter, etc. than person B in the group, who in turn will do something better, faster, smarter, etc. than person A. Instead of everyone doing everything, it makes more sense for the production of everyone that person A specializes in their particular skill and person B specializes in theirs. When everyone works together, the group and individual enjoy greater productivity.
Why hasn’t this been done with regard to real estate agents and short sales? The answer is that agents have a long history of doing everything themselves. They’re marketers, accountants, office administrators, managers, dish washers and bus boys all at once. But this doesn’t work; short sales are too demanding of your time, resources, emotional energy and focus. To get the most out of short sales and the current real estate market, there must be an intelligent and purposeful division of labor.
