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15 Common Short Sale Mistakes Made

By
Real Estate Broker/Owner with Realty One Carolina, LLC 282822
  1. Not having a system in place. Having a system in place is necessary to manage your short sale files. Documents and information can easily be misplaced when it is not stored or shared properly. Whether working solo or with an assistant or team, you should always have a manageable system in place that will allow you to provide your client exceptional service. With programs such as Drop Box, Box.net, office Silverlight, SugarSync, Evernote, Google Docs, and more, being able to access files online has been made easier.
  2. Pacifying the Homeowner. Don’t pacify the short sale process and requirement with the homeowner. Fear of the homeowner getting upset or stressing will not resolve the situation at hand. Sometimes it takes a firm hand to get the homeowner moving in the right direction. If you are passive about it, the homeowner will not see the importance of, “Time Is Of Essence.”
  3. Not educating the homeowner. Educate the homeowner to the short sale process. Don’t leave the homeowner to assumptions.
  4. Displaying negative behavior. Never speak negatively of the mortgage company,  the homeowner will react to your actions. If you complain, the homeowner will complain and often refuse to provide timely feedback to the requirements.
  5. Not Knowing the short sale requirements. Know what documents are required from the mortgage company, who to contact, and where to submit the complete package.
  6. Blank Documents. It is bad practice and habit to give the homeowner blank documents and requiring the homeowner to sign and date because you will fill in the blanks later. This does not same time.
  7. Incomplete/Missing Documents. Never initiate a short sale when you don't have ALL of the completed documents. Most mortgage companies manage their short sale process and timeline through task management with deadlines. When you have incomplete or missing documents, you will most likely miss the submission timeline.
  8. Being a Bully. Don’t try to change the mortgage company process, it is there for a reason. Follow the guidelines and your short sale will get a quicker approval.
  9. Filling out the Forms. Complete all sections of the short sale package. If an item does not apply, write in “NOT APPLICABLE” OR “$0.00”
  10. Not researching the Liens. Obtain all Lien information beforehand.
  11. Not including the HUD. Include ALL lien information on the HUD and submit the HUD with the short sale package.
  12. Omitting the HOA information. If there is a HOA, you will need the cost of the Resale Certificate included on the HUD.
  13. Not labeling each page. Always include the loan number on each page and keep the pages in order. I suggest creating an image stamp that will be place at the top of each Adobe page prior to faxing. Make sure you including these items on the stamp, homeowner name, loan number, property address.
  14. Splitting the Email/fax. Never split the emails or faxes to the Loss Mitigation Department. Your documents will get lost. Always submit your short sale package as one complete file.
  15. Offers. Obtain all documents required by the state real estate commission and broker during the offer submission process. A complete package will save you a lot of time when requesting signatures from the seller and submitting a fully completed package to the mortgage company. Additionally, when the short sale is approved, you will have all docs and disclosures in place.
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Carolyn Nelson, Broker and REALTOR
Realty One 247 

www.RealtyOne247.com   | RealtyOne247Services@Gmail.com  

 Realty One 247 helps create a life-long relationship between Buyers and Sellers.

       Realty One 247

 

 

Comments (4)

Laura Murray
Weichert - Silver Spring, MD
Search Montgomery Co., MD for homes www.MDRealEstateOnline.com

At a recent Bank of America presentation the presenter said that 60% of short sales fail because the  agent does something wrong.  So picking a knowledgeable agent for a short sale if hugely important.

Aug 12, 2012 02:51 AM
Carolyn Nelson
Realty One Carolina, LLC - Burlington, NC
Your Triangle to Triad Real Estate Expert!

This goes back to following simple instructions and not trying to make your own rules and/or trying to bully the bank. Everyone initiate a short sale different but in the end, all documentation is submitted to the  bank the same way.

I have found that when I collect the documents, assemble the package, and initiate the short sale, the approval is receive within 20 - 60 days. But when I come in to the process after the initiation, its an uphill battle getting the homeowner to comply because their mindset has been tainted with negativity against the bank or the owner is told that the bank doesn't need certain information to approve the short sale. Well, would the bank ask for it if it isn't required? No.

Aug 12, 2012 06:02 AM
Peter Matyko
Keller Williams Realty Advantage - Oviedo, FL
Keller Williams Realty

Great information here.  Thanks for sharing

Aug 12, 2012 07:26 AM
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

Carolyn: Excellent list. I, too, found that being responsive to what the lender wanted is a huge help and have had great results with short sales.

Sep 10, 2012 09:01 AM