Realtors® need as much knowledge as they can when they start working with a short sale. But I wonder if they really learned that there is more than just submitting all the right documents. You also need to save as much time as possible once you have the buyer and seller in contract. Consumers need to know more ....so I wanted to go over the steps I used recently and show you few things that you'll need to do in order to travel the straight an narrow and on your way to a smooth and successful closing.
I have done a few short sales and have picked up tremendous knowledge from them. Remember...if you have any experience in short sales you should know the obvious.....none are guaranteed and while waiting for an approval or denial....it can be a long stressful waiting game. My job is to hopefully alleviate some of that stress. I have experienced negotiating on my own directly with the lender and just today...I successfully closed on one by utilizing a reputable title company and attorney that offers a specialized service by negotiating and helping us get the deal done at no additional cost. The average time frame can range anywhere from 30-60 days depending on the bank you are dealing with. But if you follow the correct steps that is probably a good estimate. You should also be aware that just because there is a very large gap in the negotiations it doesn't mean that the bank won't except it. I have heard of deals that were approved with an overage debt of $100,000 or more. Most banks do not want to hold on to inventory and would rather take the loss and put someone into a new home......still nothing is guaranteed.
Analyze- you need to analyze whether or not you think that there is a shot you can successfully get the sellers lender to accept the deal. Usually you have nothing to lose. If the seller can no longer pay the mortgage.... then they only have limited choices to make and the easiest might be to try to negotiate a short sale.
Do the numbers make sense- if you believe you are going to move forward then you need to estimate how much their payoff is along with all other closing costs. You will have to give them an estimated net-sheet. An estimate is just that but if you can adjust the price just right to attract a buyer....then you have your executed contract. You must disclose to all parties that they understand that this type of deal is contingent on the banks final approval.
The Short Sale Packet- You will have to fill out the check list in your packet. There is a long list but here are just a few of the items you will need. For example.....you will need the fully executed sales contract,SS#,assets and liabilities worksheet,tax returns,completed hardship letter,payoff information and written authorization to give authority to negotiate on your behalf.
Time Saver- One of the biggest unknowns will be the amount of time you will have to wait for an answer. The first thing you will need to do is to get your short sale packet to the seller. My method of saving time is by picking up the packet in person and hand delivering it to my seller. Go over all the documents with your client and have them executed. Then you will personally deliver all the documents back to the attorney at the title company. By doing this you will save at least one week or more instead of mailing the information back and fourth.
Negotiating the deal- The title companies job is to submit all the documents to the lender and negotiate down as much as they can. Their goal is to have the sellers show a zero on the HUD-1.
The Closing-The title company will then get the approval in writing and schedule the closing. This afternoon we just completed another successful short sale transaction in 47 days. The seller owed $113,000...we sold the property for $119,900 and the overage was only about $7,000 which included all closing costs. The buyer was well qualified with 20% down and our deal went very well and we closed exactly on time with no delays.
If you follow these steps and also do a lot of praying you might be able to save yourself from destroying your credit for a very long time. It is better to be a late a few months.....then to go into foreclosure.
Make sure that you hire a Realtor® who can help guide you in the right direction.
For more information please contact Neal The Real Deal Bloom
-Realtor® /Remax Hometown
2500 Weston Road ,Suite 103
Weston FL 33331
(954)608-5556
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I just lost out on a short sale as my clients got tired of waiting for the banks approval after 2 1/2 months, and now they have lowered the price on the property to less than our offer. Can they really be to busy to deal with things like this.