WORKING WITH THE SELLER
Part One: Know Your Loan
Part Two: Don't Sell a Short Sale Short
Part Three: Stay in Touch With Your Seller
WORKING WITH THE BUYER
Part Four: Prequalify Your Buyers. Of course, just like any other sale, you will want the offer that your Seller accepts to be from a QUALIFIED Buyer. By Qualified, I mean a Buyer who has submitted a loan application and had a credit check run by their Lender. (The Lender will often call this a pre-approval since it is based on a signature rather and verified credit score data). If the prospective buyer has only a pre-qualification letter or nothing at all, and they are "waiting to run the credit check" for any reason, they are probably not a committed Buyer on any property, much less a short sale.
BUT when I say QUALIFIED I mean more than qualified as to the Buyer's loan. Your client needs a COMMITTED Buyer. One who will not walk because the sale is taking more than a month or two to process. Because a buyer who walks will often mean you will have to start over and you are often running up against a foreclosure date. SO ASK the Buyer about their intentions, if possible. (It will be possible to ask them if you personally showed the property or met them at an open house, see Part Two.) Explain to them in detail the short sale process, so that you know they understand and they know what to expect. Do you really want to rely on only their REALTOR to make sure they understand what putting an offer on a short sale entails? ... particularly, when you don't know the REALTOR, or when know their REALTOR has done no or very few short sale transactions or is not a full-time realtor. Why not explain to them and their REALTOR the risks, yourself, so they all go into the transaction will eyes wide open?
You should fully understand the nature of the Buyer's committment to THIS property. Do they love the house, or is it the only thing that works right now in their price bracket? If it is a fixer, are they aware of its problems. Consider showing them the legal property disclosures right up front before they make the offer. Are they clients who are writing lots of offers on lots of short sales hoping one will stick? Are they fickle buyers? Someone who needs to move right away may not be a good candidate for a short sale. (Though, if it is the only offer you can get and you have a foreclosure date, you may want to take it anyway, to get the process started.)
They key to finding a qualified and committed Buyer is information. GIVING it to them and GETTING it from them and their agent. And finding a truly committed Buyer greatly increases your chance of success in a short sale transaction and preventing your client's foreclosure.
Read on for Part Five in the Series of My Top Ten Short Sale Best Practices or go back to Part Three.
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