I Love the Central Coast!


How Not to Sell A Short Sale - - The “No Showings” Approach

How Not to Sell A Short Sale - - The “No Showings” Approach

Why is selling a home as a short sale without showing it problematic?  A short sale is not like a regular sale.  Yes, the owner gets to decide what offer they accept and will present to the bank.  And yes, the highest offer is not always the best offer.  However, in a short sale, the owner must ask the short sale lender’s permission to sell the home for less than the balance owed.  As a part of that process, the short sale lender wants to know that they are receiving market value for the home and that the seller will not directly benefit from the short sale.  Although the short sale lender will perform a valuation of the property, their valuation does not substitute for true market exposure.

In general, the short sale home has to be sold in an arm’s length transaction, meaning, for example, that the seller’s family members or business partners cannot purchase the home.  In fact, most of the major lenders (Bank of America, Wells Fargo, CHASE, GMAC) require that the parties (including agents) sign a short sale affidavit attesting that the sale is in fact arm’s length.  If the home has never been shown and access completely denied, it can create a question or red flag to the short sale lender.  Lenders want to be sure that the short sale is not an ‘inside deal”  and that there was an effort to obtain maximum value for the distressed property.   

In agreeing to accept a short sale, the short sale lender expects that the home was properly marketed, and that includes advertising the home, and also showing the home to potential purchasers.  
Since “no showings” is not how most people sell their home when they hope to profit from the sale, it is hard to argue that it is a legitimate way to sell a home when the bank is being asked to take a loss.  Every situation of course is unique, and I can certainly envision a situation where a home needs to be short sold and no viewings are possible.  In that situation, at a minimum, full disclosure of the restricted marketing of the home should be made to the short sale lender to protect the short sale seller from subsequent claims that the short sale was an inside deal.

Before deciding whether to short sell your home, it is essential that you obtain legal and tax advice, and consult with an experienced local short sale agent. If you are considering a short sale of your Central Coast home and would like a complimentary short sale consultation, please call my office to schedule an in person meeting or a telephone consultation at (805) 878-9879.

Tni LeBlanc is an independent Real Estate Broker, Attorney, and Short Sale Agent. She has successfully completed short sales with Bank of America, Wells Fargo, CHASE , GMAC, Seterus, CitiMortgage, Green Tree Servicing, Specialized Loan Servicing,  HomEq Servicing, Wachovia, Coast Hills Federal Credit Union, Select Portfolio Servicing, and others.
She is a Certified Distressed Property Expert (CDPE), Short Sale and Foreclosure Resource (SFR) and Certified HAFA Specialist (CHS) serving California’s Santa Barbara and San Luis Obispo Counties.  

* Nothing in this article is intended to solicit listings currently under contract with another broker. This article offers no legal or tax advice. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement.  Tni LeBlanc and MInt properties are not affiliated or endorsed by any lender.

Copyright© 2012 Tni LeBlanc *How Not to Sell A Short Sale - - The “No Showings” Approach*

Tni LeBlanc, Broker
(805) 878-9879 mobile/text

CalBRE #01871795

Comment balloon 27 commentsTni LeBlanc, Realtor®, J.D. • December 31 2012 01:00PM


Short Sales that can't be shown, yet are under contract in 24-48 hours, or the minute they hit the MLS are a red flag that something is not an Arm's Length deal.  I don't get the ones that seem to truly need to sell, but won't let their home be shown.  It is puzzling.

Posted by Chris Ann Cleland, Associate Broker, Bristow, VA (Long and Foster REALTORS®, Gainesville, VA) about 6 years ago

Tni, There is no doubt that you are a Short Sales expert in our community. Great information on what not to do. I just wanted to stop by and wish you and your family a very Happy New Year!!!

Posted by Jerry Newman, Texas REALTOR, San Antonio Military Relocation (Brown Realty, 210-789-4216,www.JeremiahNewman.com) about 6 years ago

Tni, once again you have written another informative post on short sales and the need to play by the rules.  I have run across  difficult-to-show short sale listings here in our Charlotte market, and it's very frustrating.

Happy, healthy New Year to you!

Posted by Melissa Brown, Realtor - South Charlotte NC Homes for Sale (Helen Adams Realty) about 6 years ago

Hi Tni, what great information for your clients. Hoping it brings you lots of business and prosperity. Happy New Year.

Posted by Kymberly Caldwell-Muniz, TCR Group Keller Williams Realty Rancho Cucamonga ((909) 973-0410 ) about 6 years ago

Chris Ann - Yes, and lenders are looking at this type of information about short sale listings more and more.  They consider it a troublesome practice.  I've even seen a short sale that indicated that the seller would not look at offers if the buyer had not viewed the home, and then it said "no showings."  Wow!  What is that about?

Hi Jerry - Happy New Year!

Melissa - Yes, it is not a coincidence that this happens with short sales.  Take away the personal financial incentive and people act accordingly.  It is unfortunate.  My thoughts - why walk from one problem into another.  Just show the house -- even if it is just a couple open houses.

Thanks Kymberly - I wish you a successful New Year as well.

Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) about 6 years ago

Tni: You are preaching to the choir. I enjoyed every thought and idea in this post--sounded a lot like me actually. Happy New Year!

Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) about 6 years ago

Thanks Melissa - I consider that a terrific compliment!  I love your short sale articles.  Happy New Year!

Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) about 6 years ago

It amazes me when listing agents take listings, especially short sales, and then either don't answer their phone or the show remarks indicate that it can't be shown or you actually speak to the agent or broker's office and they tell you no showings!!  I often wonder if its the seller or the agent making these no show decisions.  It makes no sense for a seller not to show their home if its a short sale when you'll end up losing it to the lender in foreclosure anyway.  I think some of them are on an emotional rollercoaster and although they agreed to listing it, they still haven't dug their head out the sand yet.  Great post! Happy New Year.

Posted by Gina Chirico, Real Estate Agent - Essex County, New Jersey (Lattimer Realty) about 6 years ago

I have had a home that I tried on 10 different occassions with 3 different buyers to get a showing appointment and we were always denied.  Definitely doens't seem like the best way to get an offer on the house.

Posted by Dr. Stacey-Ann Baugh, A doctor who makes house calls. (Century 21 New Millennium) about 6 years ago

Gina - It amazes me as well.  I think sometimes it os a combination of the two.  Sellers often don't want to show and sometimes they are not given encouragement to show.

Dr. Stacey - It certainly doesn't. 

Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) about 6 years ago

Hi Tni!  Happy New Year and congrats on the Featured Post!  Don't you just LOVE short sales.  Here's to many more homeowners helped in 2013!

Posted by Tamara Inzunza, Close-In Alexandria and Arlington Living (RE/MAX Executives) about 6 years ago

I've seen the "no showings" and tacked on to that is a very, very low list price.  Makes one wonder . . .

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) about 6 years ago

I wonder "what's the point" to listing a home for sale and then not allowing showings. Another one I love is when it says you must confirm the appointment- and then the seller refuses to allow you in. I had one buyer set on a house.... and literally we tried for a month to get in to no avail. So frustrating!

Posted by Debi Braulik, Selling Maple Valley to Fife WA Homes For Sale (www.roundrealestate.com) about 6 years ago

Hello Tni -- I've noticed the same thing in our MLS as well -- priced well-below market, no showings or very limited and then poof --- goes into pending status --- and when it closes -- the listing agent is also the selling agent.   Even if this is not common, the practice does not reflect well on our industry.

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 about 6 years ago

IMO the no showings approach doesn't sell any home, much less a short sale lol :)!  You make a great point about the extra issue is if you get an offer with no showings, the short sale lender is sure to be suspicious.  

Posted by Brenda Mullen, Your San Antonio TX Real Estate Agent!! (RE/MAX Access) about 6 years ago

Tni: I've never seen the "no showings" of a short sale. What I have seen is that it goes under contract pretty much at the same time as it hits the MLS. Have seen an absolutely rediculous price on a property, which went immediately under contract. Even if the lender wants more money, that initial buyer has first right to pay that amount. Seems to me it should go back on the market to possibly allow multiple offers, but that's not how it works.

Posted by Hella Mitschke Rothwell, Hawaii & California Real Estate Broker ((831) 626-4000) about 6 years ago

Not had this happen....once we had Sellers who just could not seem to find times "convenient" for showings...and we explained to make this "about them" they needed to make this "about the buyers" and that was the end of that....best of the new year to you !




Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) about 6 years ago

Happy New Year Tni.  Keep writing your interesting posts in 2013.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) about 6 years ago

Tni, I don't see the point where a seller will go through all the trouble of listing a home for a short sale and not allow showings. Must be some hidden agenda in the works.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA about 6 years ago

Very good post presented so that the layman can come onboard. As to no showings, one wonders if it is really a short-cut designed for other reasons...The banks should set a price and hold to it. In other words act as sellers. That may eliminate some of the shenanigans to get the best price tactics

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 6 years ago
I sometimes think the no show policy is because a relative or friend has a listing, and they put it on the market to show the bank that no bank wants it at that price, so the bank should do a loan modification... I've seen MLS entries where the no show policy is added about 3-4 days after the listing was entered, which tells me that they forwarded the listing to the loss mitigator (or whoever) and try to help their client stay in the house. Also, if there are tenants, and it was suppose to be owner occupied (so there is an issue of fraudulent obtaining the loan), and the seller wants to make sure they are the ones who get the cash for keys.
Posted by Gary Frimann, CRS, GRI, REALTOR and Broker (Eagle Ridge Realty / Signature Homes & Estates) about 6 years ago

There are so many agents that are unsure of short sales and steer their buyers away from them. Many buyers also do not understand a short sale. Exposure of the house may not always get an offer at market value especially in a high inventory situation, and with the arm's length forms they take additional risks and gamble that no one will pursue the participants

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 6 years ago

Thanks Tamara!  Happy New Year!

Carla - It certainly does make you wonder.

Debi - As a buyer's agent it is frustrating.  As a buyer's agent with low inventory it is maddening.

Michael - It doesn't, does it?  I think some agents don't quite understand that a short sale is not like  a regular sale either.  Unfortunately, this will only lead to more regulations and hoops for the rest of us to jump thorugh when doing short sales.

Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) about 6 years ago

Brenda - It is clear that the short sale lenders expect for the home to be properly marketed.

Hella - I've seen both with short sales.  Hardly ever does this happen with a normal equity sale in my experience.  So, it does not seem to be the normal way to sell a home.  Short sale lenders are asking more and more questions about these practices.

Sally & David - You're lucky, I see a lot.  Happy New Year!

Thanks Conrad!  Happy New Year!

Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) about 6 years ago

Michael - Must be.  It certainly can raise suspicion about the offer presented even if it is a perfectly legitimate offer.

Richie - I think the banks are fearful because they are not that great a valuing property or taking quick advantage of market trends, real estate agents are better at it, and even an appraisal won't necessary capture it that well.

Gary - There are certainly a lot of angles being worked in distressed markets.  When working as a buyer's agent, I certainly don't appreciate the no show listings.

Ed Silva - It's been so long since I've seen a high inventory situation!  I would love to have that problem. 


Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) about 6 years ago

Tni - There are so many short sales that don't allow showings. It makes it difficult to sell them. 


Happy New Year!

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 6 years ago

Tni,  In my experience, successful short sale closings come from working with experienced short sale agents...both listing and selling!  Your clients are very fortunate to be working with you!  Great post and clarity on the lenders position in a short sale!!!

Posted by Deborah "Dee Dee" Garvin, C2 Financial (C2 Financial) about 6 years ago