From what I hear, there are a lot less short sales being transacted right now because there has not been an extension to the Mortgage Debt Relief Act that expired at the end of 2013.
When a client comes to you and says they want you to handle a short sale, how do you handle it as their Realtor? Here are my suggestion:
Refer them immediately to their tax adviser or a lawyer before starting the process. The client should know the pros and cons about a short sale if being undertaken at this point in time...before the Act has been extended...IF it will even be done.
However, if the client is determined to do a short sale, I cannot force them NOT to. But I must be careful not to give them ANY advice, or even words that can be construed as advice. (The California Continuing Education courses I took recently were VERY CLEAR on that.)
SO WHAT DO I DO?
What I can do is explain the process and have them sign the Short Sale Advisory and Short Sale Addendum as part of the listing agreement.
I also have them sign the "Authorization to Receive and Convey Information" form which is needed for me to contact the seller's lender. Being in touch with the lender in order to get a Short Sale Agreement to an offer is a big part of the process.
Also at that initial listing meeting, I have the clients sign the rest of the forms, mostly disclosures, that go into a package for the lender along with a seller-accepted offer. These forms take a little time to explain and fill out, and you don't want to wait with this until an offer comes in. You want to get the disclosures off to the buyer to sign/agree in a timely manner to get the lender short sale approval process started.
The "Agent Visual Inspection Disclosure" form, the one that I, their agent, need to fill out after visually inspecting the property, will also become part of the packet early on.
WHAT DISCLOSURES DO YOU MAKE TO THE SELLERS WHEN DOING A SHORT SALE NOW?
Comments(8)