Real Estate Blog - Consumers-Don't sell yourself short!...A few easy steps to help speed up the short sale process

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Consumers-Don't sell yourself short!...A few easy steps to help speed up the short sale process

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

Remax Real Estate Weston Florida

2500 Weston Road ,Suite 103

Weston FL 33331

(954)608-5556

Posted by Neal Bloom-Realtor ® Assoc.-CRS-Weston FL on 11/16/2007 08:37 PM

Comments (15)

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Originally posted at: Weston Florida Real Estate Blog, Neal"The Real Deal"Bloom : Consumers-Don't sell yourself short!...A few easy steps to help speed up the short sale process

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15 Comments on Consumers-Don't sell yourself short!...A few easy steps to help speed up the short sale process

NOV

2007

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.

Michael,

i find it interesting that your clients just gave up. what did they have to lose? Did you have a buyer? Our job is to keep their patience and let them know up front it can be a long wait but why not wait for the outcome. But they have to have a buyer first to ensure a successful chance.If you go in empty handed it could be dangerous. This service specializes in this type of deal.

Neal,

hey hey hey :) I thought that you did not write about shor sales, welcome to the chit chat of short sales, great explanation for consumers my friend :) keep the good blog / work, I just came to read and say hello.

everything is good?

Ray Saenz

Hi Neal, A very insightful post and one I am sure others can use to learn from. Very well done. Congrats on the Good Close.

PS, my graphic is pejibaye. What's a pejibaye? A Baye with a peji, but of course! I knew that.

NOV

2007

Neal, Great post for the consumer. The only thing I would ad is for the seller to make sure that the buyer of the short sale has all their financing in place and is ready to go.

Ray,

Who said I didn't? Why not...It is another venue that Realtors(R) can use to make deals..it can be stressful and difficult but it still is a good alternative to foreclosure.

Hey William,

Thanks...not a bad opportunity to take in this market and also saving your client from many years of problems later on.

Mat,

Thanks...as far as the financing goes....

That goes without saying...the funny thing with this loan is that their package was sitting on the desk of the attorney for a week already approved for the 16th...isn't that amazing how they were all ready a head of time...usually you don't get a package so far in advance...but I guess the buyer had a great relationship with the lender and the Realtor(R) kept up on the situation. You see? We all worked together and that's the way it should be ...all working together. Now you can document this statement on your google alerts:)

Neal, great list. It is so important for buyers and sellers to understand how long the process can take. It's interesting that your title companies negotiate with the lenders. Here and in CA it is up to the Realtor!

Diane,

It was interesting because my client came to me and said she was walking if we didn't sell by next month. She could no longer pay the mortgage. I just happen to have sat in on a meeting by this title company and they were offering the service. Although I had already had experience negotiating myself...it became easier this way for me to concentrate on the other aspects of the deal. It worked out great and if it didn't go through they would not charge for their services. It was a win..win situation and my client that had no Real Estate knowledge also walked out of the closing knowing more than the average consumer. More title companies should offer this great service and they will increase the amount of deals they bring to their offices. I immediately sold my client on this and he relative called me so happy with the great news. I didn't need to bring in my one ego just to show that I could handle it myself...it worked out better this way for the seller and the buyer.

Neal,

I really like this Post! I am going to E-Mail you a quick note!!!

Tom Weiss

Tom,

I wanted to address this. It is important for the public to know this.

Thanks...each bank is different when it comes to sending the seller a 1099..I have been told that not all banks will send one...but it is important for the seller to know this information. I'm not an accountant but they should probably report it so there can be no judgements later. Hopefully they will changes these laws.

We should assume they will.