We get at least one call a day at my office on short sales. It is really amazing how many people - professionals as well as potential sellers - do not even know what the term "short sale" means. This blog assumes you have actually worked a short sale already -- if you have -- or if you are curious -- read on!
For the short sale to work I like to think of the process as the coupling of a trilogy.
#1 - you need to have the Seller who can no longer (maybe never could in the beginning too!) afford the mortgage payments.
#2 - you need to have the Lender that you can convince is better off with a short sale than to take the property through foreclosure.
#3 - you need a Buyer that can close at a price agreeable to the Seller, the Lender and the Buyer.
The market is in such a state in South Florida, that there seems to be plenty of Sellers and plenty of good intentioned Lenders. Finding the Buyer is now becoming the challenge for the selling broker. Yes, there are plenty of agressive vultures that will severely underbid the property, but finding a real buyer that will make an offer that is close to the selling broker and lender's advisor BPO (Broker Price Opinion) is really not for the faint hearted in these times!
As a result of these increased pressure to find buyers, the listing brokers are finding they are wasting time - their time - in preparing for the lender the short sale financial package, including the hardship letter and the seller's tax returns, financial statement and back up material. These brokers are finding they are better suited to do what they were trained to do - get listings, service their customer, and find buyers through marketing.
If you are a broker that is doing short sales, is thinking of doing short sales, or has done short sales and had a horrible experience -- then you should consider using a professional for the short sale package preparation and negotiation with the lender. There are plenty of "short sale firms" that promote doing this work and you can find them on the Internet and even on ActiveRain. Be sure you find out the cost - without beating around the bush (like we get paid by the lender at the closing). You need to be sure you know up front what they are getting paid and how they are getting paid -- and if the amount seems to cheap to be true -- then find out why. No one does all this work for nothing or next to nothing!
You as the broker need to protect your commission and you as the broker for the seller have your duty to get the best price for the seller -- even if the money is all going to the lender.
Keep your professionalism intact and don't be a jack of all trades. Outsource where necessary and you will find the short sale process an interesting and not necessarily a more stressful way to keep your financial statement in the black during these difficult market times.
Copyright 2008 Richard P. Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com.
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TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES