Are you the selling agent in a Short Sale market? Arm yourself with information for a successful transaction:
1. Prepare your buyer by going over steps in Buying Short Sales.
2. Ask the listing agent if he has gathered the information necessary to submit the Short Sale package, including: letter of authorization, financial statement, recent pay stub or last quarter profit and loss, recent bank statement, last year's tax returns, hardship letter, and payoff if more than one lender. If the listing agent has not already done so, prepare the buyer for a longer wait. I would also ask what the hardship is. If the listing agent will divulge that information, it may assist you in determining whether it would be a viable short sale situation. The hardship should be loss of income, medical, divorce, etc. where they might be a reasonable expectation for approval by the lender.
3. Decide with the buyer whether to make the contract effective date, depending on your board of Realtors, the date the seller signs the contract, or the date the offer is finally approved by the seller's lender. The contract effective date is normally the trigger from which other actions are based. For example, if it is customary in your market to conduct inspections within two weeks, your buyer may wish to wait for bank approval before proceeding. Conversely, if the buyer conducts inspections early, that shows strong intent to complete the transaction.
4. Advise the buyer regarding potential valuations of the Short Sale property by the lender. If the buyer is going to make an unreasonable offer that you know may not be approved after several months of waiting, it is better to inform him at the beginning. Look at the property in the eyes of an appraiser. If recent comparable sales don't come close to justifying the buyer's offer, this may not be a transaction worth pursuing, for you, the buyer or the seller.
5. Once the contract is signed by the seller, follow up gently with the listing agent. A call every two weeks to check on the status of the offer with the lender should be enough of a reminder, and should satisfy your buyer's anxiety during the long wait toward approval.
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Sandestin, Santa Rosa Beach, Blue Mountain Beach, Dune Allen, Watercolor, Rosemary Beach, Seaside, Niceville, Bluewater Bay, Freeport, Crestview, Navarre, Fort Walton Beach, Mary Esther, Shalimar and vicinity. Call 1-877-487-9639.