Short Sales are so frustrating for everyone, but none so much as for the buyers.
When a home buyer writes an offer on the home, they often spend a sleepless night wondering, hoping, praying...."Will we get this home"? Normally the wait time is about 1-2 days and then they can relax and start planning for the move. Not with Short Sales......the "wondering, hoping, praying" can take months. How can we as agents make this any easier for our buyers?
I'm not sure I know!
The first thing is to know exactly where we stand with the listing agent and the Short Sale Negotiator. Are we the only accepted offer sent to the bank? Are we one of many? Do we have an open escrow? We need to be in touch with the listing agent to be aware of our standing. Based on the listing agent's approach, we can prepare our buyers.
If we are the only accepted offer, and there is an open escrow with a deposit.....we can be very comfortable that the bank is going to act on our offer and not see multiple offers. This is how I proceed with my listings and what I push for with my buyers. To me this just makes sense. The bank does not own the home, the seller does and it's up to the seller to find the best offer and then send a package to the bank for approval. But this is not the way many agents work. This approach provides some level of confidence for both buyers and sellers. The buyers know that no one is going to outbid them at the last minute, and the seller knows the buyer is committed and they can put the home in back-up and make some decisions.
A variation of this is when the listing agent only sends our offer to the bank and puts all others in back-up, but without an open escrow or deposit. I have a couple of Short Sales in this situation. The disadvantage is my buyers often ask if I BELIEVE the listing agent.....that we are the only offer they are working. It's tough, I am honest and find most agents are honest too.....but it's often hard to reassure the buyer who has waited several months. Over time, I do get emails asking what if the agent is "lying" to us.
In this situation we have to do more hounding of the listing agent for information and more reassuring to the buyer. It creates more anxiety! In preparing the buyer for this type of situation, we have to be honest and clear. The process takes a long time. The good news is that we are most likely the first, or close to first offer they have. That's why we are lucky enough to be the ONE accepted offer....but since the process is just beginning, we will also be in for a long wait. It can easily be 2+ months.
Helping our buyers understand what happens during this time is critical. The misconception is that a completed file sits on an overworked and under-interested bank representative who has no urgency to act on the case. Overworked? Probably....but certainly motivated to make decisions.
The Short Sale process is time intensive and it seems all the steps take 1-2 weeks. At least that's what we hear when we call to get status. Other posts are available to discuss these steps in detail....but the short is:
1) Short Sale package assembled and submitted
2) File is assigned to a lender negotiator
3) Lender negotiator orders the internal appraisal
4) Appraisal received and lender negotiator approves the offer
5) Package goes to higher levels for approval
6) If there is PMI (Private Mortgage Insurance), file goes to PMI investor to approve
7) If there is a second loan on the property, file goes to the second to approve
If one assumes 1-2 weeks for each step? One can see how this can drag on. As agents, we need to explain this in detail....and over-and-over again! Often!! Our buyers need to hear from us that we are still thinking about them and checking in. I think the black hole of waiting can be brightened by constant communication.
Set the right expectations....and then check in and let our buyers know we are monitoring the process and are still there for them.
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