Top 10 Reasons Why Your Short Sale Will Not Close

By
Real Estate Broker/Owner with J. Luis Properties, Inc.

10.) You sent in multiple offers to the bank. Put yourself in the bank's shoes, what would you do if you got 3,4,5 or 6 offers on your property? That's right you would wait to see if you get more at higher prices. We all know short sale departments at banks are extremely organized and they can surely keep track of multiple offers (Yes I'm being sarcastic). Oh did I mention accepting and having your seller sign multiple offers is probably a little against the law and at the very least unethically? Third party approval is just a contingency just like an inspection or financing. You wouldn't keep accepting offers if there was an only and inspection contingency right?

9.) You don't call the bank periodically for updates, you rely on them calling you. With literally thousands of short sale offers coming in, you need to keep your file fresh on their minds. Files are always being lost or misplaced, yes even in this digital age they get lost in cyberspace. A file goes to a negotiator via email and the pdf gets deleted accidentally. Do actually think the negotiator is going to remember let alone try and recover that info when he/she has another 100 or so to work on? They just say NEXT.

8.) You don't bother to lower the price periodically. Do I really need to explain this one, this is real estate selling 101.

7.) Your marketing, well sucks! No pictures, no virtual tours, poor description, etc. Again real estate selling 101.

6.) You don't know what the hell you're doing and are too pigeoned minded to actually take formal training to get better because of course you've been in business 28 years or that's what your broker told you to do. Formal training is not some 2 hour course given by your local board nor is it a 2 hour webinar. I'm talking at least 8 hours of classroom instruction or distance learning curriculum. Nothing substitutes for a live instructor if you have a choice chose the classroom.

5.) You don't submit an offer you feel is too low. WHAT? Let the lender tell you it's too low. Get the process going and hopefully you can get a hard number from the bank on what they'll take.

4.) You don't check this property's status and the bank forecloses. The short sale department does not communicate with the foreclosure/legal department. You don't know how many times I've called and informed the S/S department about an impending sale date and they reply, "Oh let me send them a message to delay the sale." This doesn't stop the process but in my neck of the woods if you delay a sale, you just bought yourself 60 days. It takes 30 days to get in front of the judge to schedule another sale date and that date is usually another 30 days out.

3.) Poor communication with the buyers/buyers agent and they walk. Mindset is crucial here. You need to prepare the agent and/or buyer for a long wait at least 90 days before you can go into the sales phase. You also need to let them know that not a whole lot will happen in the first 30 days and to expect updates every two weeks or sooner if developments occur.

2.) You're disorganized. If your the type that gets overwhelm at times (Like me) you need to systematize your business. You should have already done this but this is even more crucial in short sales. I designed an excel spread sheet that holds all my listings. I note whether they are active, pending , short sale, etc. It contains all the info I need in the notes boxes of the spreadsheet and I note every time I call with date and name of person. If you want a copy of it click the hyperlink.

...........drum-roll please........and the number one reason your short will not close is:

1.) Your short sale package is incomplete. A bank will not call you and say hey your package was incomplete. It will go in the round file cabinet. The more info you send them the better. I always call the lender first and ask for their specifics. I then send them what they ask and then some. A complete package should be at least 50 pages. I've seen some that are 100 pages. These servicers do not have a clue about your market. The more you send them pertaining to the market value the better chance you have at getting your package looked at sooner. You come across as a professional that really knows what you are doing, perception is the key here. (Who cares if you just took the Short Sale class 24 hours ago, you're a pro act like it!)

Good luck and happy short selling

Noel Padilla, CDPE

close

Re-Blogged 32 times:

Re-Blogged By Re-Blogged At
  1. Melissa Zavala 08/22/2009 01:22 AM
  2. David M. Childress 08/22/2009 03:41 AM
  3. Michael Crawford 08/22/2009 04:08 AM
  4. Shawn Bradford 08/22/2009 04:13 AM
  5. Joan Lorberbaum Moore 08/22/2009 04:20 AM
  6. Sandra Reed 08/22/2009 04:38 AM
  7. Mike Sher 08/22/2009 04:42 AM
  8. Jane McMullan 08/22/2009 04:55 AM
  9. Denise Dutson 08/22/2009 05:38 AM
  10. Lori Young 08/22/2009 05:49 AM
  11. Mark Rienzie 08/22/2009 06:00 AM
  12. Candice A. Donofrio 08/22/2009 06:06 AM
  13. Bob Haywood 08/22/2009 06:14 AM
  14. Victoria Felice 08/22/2009 06:20 AM
  15. Bud Cooke 08/22/2009 07:24 AM
  16. Mary G Matero, PA 08/22/2009 07:48 AM
  17. C J Barnes 08/22/2009 09:44 AM
  18. David Weldon 08/22/2009 10:20 AM
  19. Leslie Purdy 08/22/2009 12:53 PM
  20. Allen Deaver 08/22/2009 01:32 PM
  21. Connie Winstead 08/23/2009 12:25 AM
  22. Jennifer Marks 08/23/2009 12:58 AM
  23. Jack Johnson 08/23/2009 10:33 AM
  24. Richard Daskam 08/23/2009 04:01 PM
  25. John Juarez 08/23/2009 04:43 PM
  26. Annette DAntoni 08/24/2009 01:18 AM
  27. Timothy Ciulla 08/24/2009 03:47 AM
  28. Timothy Ciulla 08/24/2009 03:47 AM
  29. Nicole Borsey 08/24/2009 10:57 PM
  30. Shah Ahmed 08/31/2009 07:30 AM
  31. Josie Mijares 09/01/2009 11:11 AM
  32. Sandy Mitchell 10/06/2009 06:30 AM
Location:
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Tags:
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Rainer
49,199
Jill Ford
Keller Williams Realty of Pinehurst - Pinehurst, NC

and how about item 3a. A buyer's agent who seems to let your warnings that we are in for a LOOOOONG ride go in one ear and out the other.  The suggestions that she prepare her client for at least 3 months before we know much of anything is ignored.  Maybe an informational piece that the buyer signs acknowledging the potential time frames involved would help.

 

Aug 23, 2009 03:41 PM #143
Rainmaker
228,209
Patricia Beck
RE/MAX Properties, Inc., GRI, CDPE - Colorado Springs, CO
Colorado Springs Realty

Great list...Short Sales are a lot of work and take forever as it is!

Aug 23, 2009 04:33 PM #144
Rainmaker
458,001
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

My 2 cents:

A seller can only accept one offer. Period. It is a contract. You cannot enter into a contract to sell the same house twice. A seller can accept an unlimited number of backup offers. The seller is the owner: the lender is not the owner/seller. The lender may be in charge, but they are not a party to the contract.

No law requires that you send all offers to the lender. The lender is not the owner. You must present offers to the seller, unless the seller instructs you to stop. Again, the lender is not the owner/seller.

Yes, I know that others have mentioned these points, but I am saying them again because so many agents don't yet get it.

Wonderful post, Noel!

Aug 23, 2009 04:43 PM #145
Anonymous
Steve Pawera

Regarding John's 2 cents..  if I throw in my 2 cents, pretty soon we can have enough for coffee!

When you have one offer before the bank, and you do anyhting to interfere with that offer (i.e. tell them there is another offer, send them another offer), you stand to be sued by the first buyer for 'tortious interference with a contract'.  How's that for a mouthful?

 

 

Aug 23, 2009 05:00 PM #146
Rainer
9,256
Loree Nichols
Charles Rutenberg Realty, Inc - Tampa, FL

I got an offer that I felt was too low and advised my client not to accept it, but sent it in to the lender anyway.  They got started on the BPO right away and then a full price offer came in.....which I did have the seller sign and accept.  I don't know if this is right, but it at least got the ball rolling and I was sure to let the buyers agent know that the low offer was below our expectations and that we would submit it, but not accept it unless the bank ok'd it.  any thoughts?

Aug 23, 2009 05:22 PM #147
Rainmaker
166,527
Cristina McBreairty
RE/MAX Allied - Windham, ME
CDPE, SFR

Great post!  I am in the process of trying to wrap up 3 short sales myself.  You make some really good points.  I especially liked your point in #5.

Aug 23, 2009 11:51 PM #148
Anonymous
Tom

Noel,

Good post.

This is good stuff for those real estate agents that think they can just wing a short sale. I would add another key component, THE BPO. Every short sale is based on the BPO and too many agents wait for BPO to materialize out of the short sale process.

Agents, you will be much more successful if you do a BPO up front and submit it with the offer. If you don't know what a BPO is, take Noel's advice and edjamucate yourself.

Aug 24, 2009 01:01 AM #149
Rainmaker
1,220,326
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Area Real Estate

I resent the inference that people in the business 25 years can't understand a short sale and only you can!  Fax 50 to 100 pages?  Who does that - turn it into a PDF folks cause the negotiators will love ya if you do!

Edjam i cate thyself.

Aug 24, 2009 04:35 AM #150
Rainer
32,233
Sidney Jimenez
Keller Williams - Miramar, FL
CDPE, Short Sale Expert, 954-665-9449,

LYN,

I don't believe Noel was saying that an agent with 25 years can't do Short Sales. To me, it seems the point he is trying to make is that some agents believe that because they may have 25 years in the business that automatically means they can do Short Sales, or any other specialized niche in real estate.

Someone with 25 minutes or 25 years of experience will do themselves, and their clients, good by getting a quality education in order to enhance the knowledge they already have. This market has never happened before therefore, without getting this specific type of education, you're not as good as you could be.

Experience does not always equal knowledge.

Aug 24, 2009 04:44 AM #151
Rainmaker
148,120
Roy & Gail Barnhart & McKay
Barnhart & McKay Realty Advisors - Hudson, FL
Barnhart & McKay Home Selling Team

Lyn,

Old dogs need to learn new tricks in this day and age. If you didn't, you would still be running contracts instead of just faxing them, or you would still be using the MLS book instead of the MLS:)

Lead, follow, or get out of the way, Real Estate stops for nobody.

Aug 24, 2009 06:18 AM #152
Rainer
22,349
Noel Padilla
J. Luis Properties, Inc. - Kendall, FL
CDPE

Lyn

You just dated yourself, lol. I didn't mean it that way. Like Sid said I meant that just because you have 28 years in the business doesn't mean you know what you are doing.

Aug 25, 2009 10:34 AM #153
Rainmaker
199,235
Mark Velasco
Sharpstone Realty, Inc - Whittier, CA
Listing Agent-Whittier & Surrounding ciities

Great post Noel. Now if I could just forward this to all of the Realtors in my area

Aug 25, 2009 05:55 PM #154
Rainmaker
506,877
Alex Charfen
Charfen Institute - Austin, TX

Noel:

Awesome post.  We as an organization were so fortunate that agents like you were some of the first to attend the CDPE course over a year ago.  You are a credit to our industry and I know you have done everything you can for the buyers and sellers in South Florida who need your help.  Great list, great post, from an excellent agent.

Let me know what you think of the 10,000+ member video...

Alex Charfen
CEO
Distressed Property Institute, LLC

Aug 25, 2009 10:44 PM #155
Anonymous
LeRoy Houser

Extremely well done.  I co-authored CRS 111 "Short Sales and Foreclosures; Protecting Your Clients Interest," and you are right on!! Your experience is evident, and thank you for sharing your knowledge with the World.  I firmly believe that Realtors are the key to solving this housing crisis, and thank you for being a part of the solution

Aug 26, 2009 03:00 AM #156
Rainmaker
27,796
Dawn Pratt
Orlando, FL
East Orlando Real Estate

Great post and congrats on the feature. I wish all listing agents would submit the 1 highest and best offer to the bank rather than multiples! A contract is a contract between buyer and seller- regardless of 3rd party approval!

Aug 27, 2009 02:29 AM #157
Rainmaker
171,909
Debra Kukulski, Broker Associate
RE/MAX Unlimited Northwest - Cary, IL
SFR,CDPE;GRI;ABR;e-PRO Realtor, Northern IL

These are excellent tips, Noel, great info to get out there as a CDPE!

Aug 27, 2009 03:09 AM #158
Rainer
23,180
Jessie Teehee Real Estate Team
Keller Williams Realty Elite - Edmond, OK
"YOUR Real Estate Advocate"

Great post and I would like to add to #4 - submitting low offers. Why would you submit a low offer. As the listing agent, your fidicuary responsibility is to ascertain the best price for the seller. Just like any other listing, if a low offer comes in, you negotiate it to an acceptable offer. In other words, make your Seller be involved, he still owns it and has a right to accept, reject or counter every offer. If a low offer comes in, reject it if necessary, and keep marketing it.

And #6 is right on the money. I see so many new agents take these short sale listings because they dont have anything and they flounder. Likewise, I have seen experienced agents take them to to bolster their listing inventory and then have the gaul to complain they cant get them sold/closed because they didnt know what the were doing in the first place. Swallow the pride and pass the file on to an experienced agent and collect a referral fee until you become properly trained and qualified to do them.

Aug 31, 2009 02:39 AM #159
Rainmaker
38,698
Angela Niece
REMAX Results - Eden Prairie, MN

Great post.  Looks like you put quite a bit of time into your blog post.  Thanks

Nov 05, 2009 03:20 PM #160
Rainmaker
429,015
Martin Kalisker
Synergy Metrowest, Inc. - Brookline, MA
Synergy Metrowest, Inc.: MA Real Estate & More

just wanted to let you know that I continually read and re-read this post as a constant reminder of what we need to do to get these short sales processed quickly and painlessly.

Mar 02, 2010 02:06 AM #161
Rainer
22,349
Noel Padilla
J. Luis Properties, Inc. - Kendall, FL
CDPE

I'm glad to be of help. I only wish that there would be some uniform method created and mandate all agents and bank servicers do it.

Mar 02, 2010 06:22 AM #162
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Noel Padilla

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