1. Transparency of all negotiation related activities – with all parties having access to the details. Active involvement creates a self-policing environment when both sellers and buyers can follow the transaction. It helps build a team approach to the transaction and instills confidence to all parties that the right things are being done to secure short sale approval. This is important if additional funds are required to secure a short sale approval. For this very reason we developed and refined our software, Short Sale Builder (www.shortsalebuilder.com) to facilitate transparent communication and streamline the process.
2. Know the laws in your state in regards to short sales and creditor collection rights. Accurate legal information helps negotiators determine when a bank is asking for more than they could recover if the property went to foreclosure. This is a key negotiation strategy.
3. Stay in the loop, know what your successful peer groups are doing as well as keep up with the current trends in short sales. The latest information will give you and edge you need in establishing yourself as a successful short sale negotiator.
4. Set realistic expectations with everyone involved in the process, do not over promise anything, you will lose the transaction when the short sale does not transpire the way you expected. Under promise and over deliver.
5. Do not take files that belong to investors who are low balling offers. You will only jeopardize your reputation as well as your other transactions by increasing scrutiny on your retail files you’ve worked hard to get approved.
6. Do not submit a file without having verified all liens and judgments. You will lose these files at closing when there is no money to pay them. Always have escrow pull a title report prior to submitting short sale packages. It will save you a lot of headaches.
7. Incorporate a call center to make your initial calls on a systematic basis. The call center will get the file set up with the lender and then pass it over to your negotiator once the bank representative has been assigned. This will allow your negotiators to fully focus on closing the file and not get burned out with the mundane aspects of negotiation, such as submitting missing documents. This will also allow you to recruit and retain the highest level of negotiators.
8. Inform all brokers and agents you work with that 6.00% commission will not be paid on every single transaction. Some banks and servicers simply do not allow for 6.00% commissions and there is nothing that you can do to change this. No matter what you read, there is nothing out there that mandates that’s investors have to pay 6.00% commissions on short sales. There are guidelines that urge investors to pay realtor’s commissions, but nothing that mandates this.
9. What if your clients are real estate brokers and they do not want to pay your fee out of their commissions? We had success having the buyer request the seller to cover the negotiation fee as part of their closing cost. This is an effective tactic that will save buyer or the broker any part of the negotiation fee. The key is to You just need to fully disclose this information in the purchase agreement.
10. Do not alienate the bank by being confrontational or mislead them with false statements, it will only hurt your future negotiations. If you are respectful, and have all of your negotiations conversations documented – you will be able to escalate the file to a supervisor if your short sale is stalled or not going they way you had intended. Ensure that you have the facts correct when making a case with the negotiator. If your facts are incorrect and you are acting on emotion, you will effectively ruin all chances of getting any kind of escalation approved.