TOP 5 SHORT SALE "WARNINGS" things to avoid at all costs

I have seen alot of blogs with tips for short sales, but none that warn you of what not to do.

TOP 5 SHORT SALE "WARNINGS"

#1. DO NOT SELL TO A RELATIVE. The number 1 myth of a short sale is it can be used to sell the home to a relaitive, child, spouse, cousin or other person and you will be able to re-buy  your home at a cheaper price. The reality is the bank who holds your loan will require you to sign an affadavit you are not selling to a relative under penalty of perjury.

#2. DO NOT USE AN IN-EXPERIENCED AGENT OR TRY TO COMPLETE YOURSELF. A short sale is hard ennough for an agent highly experienced in short sales, an agent who is not experienced or trying to do it yourslef will virtually asure a negative result. You can hire an experienced agent and a professional negotiator to work on yoru behalf, they get paid from the proceeds of the sale and does not cost you anything out of your pocket.

#3. DO NOT BE UN-PREPARED. The sure way to have your short sale rejected is to not be prepared. You need to have your financials in order and the short sale package 100% complete before submitting it, Packages that are not complete often get shreaded and require a new submission with time lost.

#4. DO NOT SET TIME LIMITS. You can not tell the bank you need an answer within a specified time such as 30 or 60 days. It is unrealistic and will lead the bank to instant rejection as tehy will not spend tiem and money to have a buyer say they are pulling out after a certain amount of time.

#5. DO NOT MAKE ASSUMPTIONS. Do not assume your agent is expereinced, ask first.
The biggest problems often lay within the offer to the house. The seller still owns the house, the agent should solicit offers and present all of them to the seller, they should choose the offer with the best price and best terms along with the least amount of contingincies. the seller should only sign 1 offer, include a short sale contingincy and only submit 1 offer to the bank for approval at a time. 

Do not assume your agent is on top of things, make sure they are in constant or even daily contact with the negotiaor. The most important job of the agent is to accompany the person doing the BPO or appraiser through your home. This bpo or appraisal has major impact if your short sale will be approved. You need to make sure your agent does everything to make that person's life easier, allow easy access, the seller should not be present and furnish proof or estimates of any repairs or damage. Often agents do not attend or try to limit or hinder the BPO agents job which is not in their benefit.

If you are looking to buy or sell a short sale, Please see my other blog

TOP 5 TIPS TO GET YOUR SHORT SALE APPROVED

http://www.trulia.com/blog/scott_godzyk/2011/01/5_tips_on_getting_your_short_sale_approved


Updated Jan. 8, 2011