Short selling one's home is an option more people are deciding on as home prices keep falling, and the threat of foreclosure seems very real. However, many consumers are finding it difficult to find real estate agents who are willing to take on the prospect of helping them sell their homes.
Realtors get paid commission based on how much homes sell for. With short sale homes, the worth of the houses has already decreased, which means the realtor is already in a bad position when he or she first takes on an assignment. With most homes, there's a period of negotiating on the price. Realtors often get to start high then come down and still help sellers hit their price, or get very close to it. With a short sale, there really isn't a high starting price, which means they start low and may end up going lower. The seller's aren't usually feeling like doing too much negotiating, since they're just looking to get out from under the debt of the house. This means realtors are working harder for less money; no one particularly likes to do that.
Another issue is that many realtors don't fully understand the short sell process. Even though it's been around for a very long time, the parameters were much different in the past, and there were few short sales. In those instances, it was mainly couples that might be divorcing or who had to leave the area quickly who would look towards a short sell. At those times, homes still retained their value, so a short sell might actually be what the home was worth. The realtor wouldn't lose much money, and might actually do okay in commissions, but they could still market the house as they normally would, and there weren't the same complications with paperwork as there is when the homeowner is willing to take what could be a drastic loss.
Because of the problems in the housing market, the housing authority in some states have created educational material for realtors who need more than a refresher on short selling. Some courses are a few hours, while others are a couple of weeks. This will help more realtors understand all the nuances of short selling, which hopefully will make more of them comfortable with handling short selling homes.
If you're looking to short sell your home, be sure to talk to your realtor, and only work with someone who's comfortable with the entire process.