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
6 agents
7 attorneys
8 title company
9 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.
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first published http://realestateguy.featuredblog.com/?p=198
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