Active Rain September 28, 2011

Rethinking How We Advertise Short Sales

Never short change a propertyRecognizing that not all markets are the same and that we as brokers have an obligation to disclose material facts, my thoughts are centered on practices here in my home market of Westchester and the Hudson Valley. Simply put, I am not sure that marketing listings that are short sales as short sales first and foremost is the best approach. I have actually stopped the practice almost entirely, especially in cases where the home is still occupied. 

Our MLS has a Yes/No option for the disclosure of a short sale. We can say that the sale is subject to 3rd party approval. I think this suffices for disclosure. Most of my short payoff listings are the same as regular sales- owner occupied, cared for, warm and well-presented. Some have been downright upscale. I have found through experience that the more homey, attactive elements these homes have in common with equity sales is the best way to market them.

Phrases like short sale bargain, short sale opportunity, and in my opinion the worst, pre-foreclosure, all over the marketing can be counterproductive. There are several trends I have identified. 

  • I get inundated by inquiries from these people who are “short sale investors.” 
  • They attract more lowball offers from bargain hunters, bottom feeders and speculators.
  • The buyers and buyer agents treat them more like REOs, with less notice for showings and, in some cases, insensitivity to the owner occupants. 
  • Plastering “short sale” all over my listings began to brand me at one time as a less attractive option for prospective sellers who weren’t short sales and didn’t want to be lumped in with them. 
But by far, the most important reason for not leading with the short payoff is my clients themselves. Just imagine if you were forced to sell your home for financial reasons, faced hardship and default, and then saw everythwere your home was advertised the short sale and distress being pushed instead of the pride and care you put into the place for the last umpteen years. How disheartening would that be? 
There are cases where it makes sense to lead with the short sale in the marketing. The home could be vacant and the owner has moved on. There are also cases where the client feels it is an advantage in attracting a buzz, and of course you have to abide by their wishes. But for the vast majority of my short sale clients, the winning move for me has been to sell the home and its advantages, and not the distressed state of the owner’s finances. We do after all, sell homes, not distress.
Max by the fireplace