Top 10 Reasons Why Your Short Sale Will Not Close
As someone who is passionate about short sales, I am always reading what others have to say on the subject. Noel Padilla wrote this fabulous blog post with his David Letterman Style Top 10 List.
It's a great post because it brings to light the problems that many make when working short sales. It's a little bit strong, be he says what needs to be said: reader beware!
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 send me an e-mail.
...........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
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