Representing a buyer in a short sale can be down right scary! But being angry at short sales and/or not showing short sale listings is probably not the solution to surviving and being successful in this market.

As a short sale listing Broker I have compiled a lot of experience listing and negotiating short sale transactions that have made not only my sellers, but the buyer's and buyer's agent very happy.

So I thought to put all that good information for the benefit of the Realtors who sell my listings - Buyer's Agents.

Simple guide/rule to follow.

Interview the listing agent!!!!!!!

You can start the interview right on the MLS. If the listing looks like no thought was put into it, no description, no photos, no disclosures, wrong information, etc, you do not have a good sign. Short sales are detail oriented transactions and the listing is the "first impression" of the agent you would be working it.

When you contact the listing agent, via email/phone, ask a few simple questions:

• Does your seller have a hardship and is he/she a candidate for a short sale? You are not, in ANY way, asking what is the hardship of the seller (no violation of agency law), but merely verifying that the agent has done his/her due diligence.
  

• How many liens are on the property and who are they? You may want to move on if you do not get a reply to your email or a confused answer on the phone.

• How long until a final judgment of foreclosure or sale date? If the agent does not know what you mean or does not know the answer, maybe you should move on. If the agent answers you (as he/she should) you will have any idea on how much time you all have to get the transaction closed.
  

• How do you handle an offer? The answer should be a variation of this: "The seller signs one offer. That offer will then become an executed contract, and that one contract, along with a complete short sale package will be sent to the seller's lender(s)."

• What happens to the listing once the seller has executed the offer? Only two good answers here. "Property status will be changed to Pending Sale or Pending Sale accepting BACK-UP offers only."*
  

• Who prepares the package and negotiates the short sale? There are various acceptable answers to this question. Just make sure you interview the person/company who will be negotiating the transaction. It is my opinion that no one is in a better position to do the negotiation that the listing agent. The listing agent knows the borrower, the home and the neighborhood the best.

• How often is the lender contacted and how often should I expect to receive an update? I contact each lender twice per week and I update the buyer's agent once per week. That has worked out very well for me, buyers know that their transaction has not been forgotten and do not feel anxious, even if the transaction takes a little longer.

Lastly,

•  As a listing agent, how many short sales have you successfully closed ? There is not set, correct number, but experience is the key to a smooth short sale transaction.

Of course there are no guarantees to an approval from the seller's lender but following the above guideline will assure you that you have the best chance to a quick(er) closing.

As a Buyer's agent, you also have responsibilities in, and contributes to, the success of a short sale transaction.  By mastering the basic knowledge about short sales you can educate your buyers in what to expect.

Try to stay away for properties that are listed lower than their comparables. The lenders will order an appraisal or a BPO  (Broker's price opinion) and if the value is off, the file will be closed or the offer will be countered. Listing a property for it true, current market value is a very important piece to the short sale puzzle.

*Depending on your particular board, the terms might be slightly different, but you get the idea. The property status should not longer be Available.

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