Short sales suck.  Sometimes they’re cheap.  Sometimes they’re pretty.  But almost always they suck.  In today’s market, there seem to be two types of people – those who run away from short sales and those who run towards them.

Do you know why they suck?  They suck because any agent out of the blue can list them.  There are no requirements other than a real estate license.  It does not matter that the agent has never dealt with a bank before or even that the agent has any idea what a short sale truly is.  However, no matter how good the selling agent is, if the listing agent is incompetent the deal will not close.

Bank owned properties are usually much different.  They stand a far higher chance of closing and one of the many reasons is the agents who sell them are specialized.  Most banks require these agents to undergo special training and many of these agents only deal with REO properties.  Therefore, these agents know how the process works and how to get the deal closed.

The other huge reason is that generally banks actually want to sell a bank owned property.  When a home is listed for a specific amount for a bank owned property, the bank has agreed to (and often dictated) that price.

For a short sale, on the other hand, just because a home is listed at a given price, there is no guarantee that the bank will accept that price.  There is a growing scam where many real estate agents deliberately price short sales ridiculously low for the marketing aspect.  The home never sells, but the agent gets a lot of attention and leads.  The agent and seller do not need to consult the bank before pricing the home, and often the agent does not care that the bank will accept it.

There do exist short sales that actually close, but they are in the minority and you are more often than not better off by just running away in the first place.