Why the lenders like REALTORS to be gatekeepers for short sales?

It is a common practice that Realtors are facilitating the short sale transactions with the lenders. It is also well known that this is a quite time consuming effort and can easily de-focus the agents and brokers from their core business.  In the mean time it is less obvious that the realtors have a fundamentally voulanrable role in this posture.

Why?

Realtors fiduciary responsibility is to represent the seller.  Are the interest of the seller and the bank different?  Of course, this the the reason for the short sale since there is a breach of contract between the seller and the lender.  Now, how strong the negation position of the realtor towards the bank can be when she/he represents the seller’s conflicting interest?    Could he/she be really effective effective in this position?

The lenders like the idea to work with the Realtors since they know that agents can not not present a real negotiation leverage.  In the mean time realtors’ work is for free for the bank.  Most of the mitigator companies are charging mitigation fees, not the agents though who’s compensation is rolled into the commission.  So  it a “perfect” setup for the bank.

Common wisdom is to focus on what we are good at and source out ourbackdoor operation.  This is especially true if we are fundemantally limited to become effective in our secondary activities. Ignoring this often leads to burn out and ineffective operations.

Posted by Eureka Expert on Dec 20 2008. Filed under Short Sales. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry