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Arranging a successful Short Sale is like Herding cats.

By
Real Estate Agent with Powered by: Real Broker LLC 50781-90

 

Following attempts at at least 30 short sales in the Madison Wi area over the last few years, and having success in at least 70% of them, I have noticed this rather unusual likeness. 

Let me explain.   The short sale has parties.  

1 the buyer

2 and seller

3 lien holder/bank, investor, government entity, PMI

4 buyers lender

5 other lein holders: second mortgage, Federal, judgments

agents

attorneys

8 title company

etc

1-5 the most significant, but all can cause a deal to be more difficult.  

So all of the parties have their own agenda but the short sale has to run a pretty defined path.    At any specific time, one or other party could wander off, and frequently does.   

For example, the seller gets fed up and starts talking foreclosure.  Possibly the seller is being asked for some payment at closing.  OR to take back a note (borrow) at closing.

Maybe the buyer starts talking looking for other homes, or doesn’t want to cooperate on a piece of documentation required by the bank.  Or needs to be convinced to increase an offer by x,000 to get the approval.

The leinholder, will often come back and need more documentation,  higher price,  lower costs, longer time, another appraisal, etc. 

Each one of these issues (I liken to a cat walking off) needs skill to navigate.  And just after you get one challenge dealt with, another arises (a cat walks off). 

Finally, we get the leinholder’s approval, which says we need to close in (usually) 30 days.  But that does not end the herding, there are still “cats to walk off”

Now it is time for the buyers lender to jump through loops to get the deal done.  This is particularly difficult if a VA loan.  But even if not, just a slight delay and the whole process is at risk. 

A short sale transaction is successful when all parties understand what is required of them.  The more cooperative all parties are the easier the transaction. 

I consider it as the listing agent to be like a conductor.  To be able to inform and educate all I have contact with.  And if I do not have contact with the buyer, to make sure that the buyer agent is up-to-date enough to be able to keep the buyer under control.

Read more on short sales Madison Wi

 

first published http://realestateguy.featuredblog.com/?p=198


 

Posted by

Guy Lofts CRS,  is a long-term area resident who has been helping people make sound housing decisions since 1993.  Guy is a past president of the Wisconsin Chapter of CRS, the Certified Residential Specialists.  A leader in technology, having had his first personalized web page in 1995.  With a first Blog in 2006,  Guy has provided training with in his office and is to present a training at past Wisconsin Realtor conventions.

His passion is helping people improbe their quality of life through Real Estate.  That means whether you are in real estate of ust want to invest of buy a home, we can help you.

Real Estate Guy @ eXp Realty Madison 

Helping Buyers and Sellers in Madison WI  Search all homes for sale, Madison WI

 

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Comments (1)

Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

In our experience, a very key component is to stay in close contact with the BUYERS lender...who often decides it will take forever and does not have his appraising and underwriting ducks in a row...gotta have the team on the beam and be hep to their jive to keep those short sales stayin' alive....Go Guy Go ! 

Nov 21, 2010 10:08 PM