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10 Tips To Help You Close More Short Sales

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

January 21, 2012 05:56 AM

Hi folks. Do You Want To Close More Short Sales? Of course you do. Here are some tips that may help.

Educate the Sellers at time of listing. Make sure they fully understand the process and what is expected of them. Be sure they understand cash contributions, promissory notes, tax ramifications and what happens to the deficiency.

Price the property at market value or more. Negotiate the cleanest contract you can get with a price that you can defend to the lender.

Know the type of short sale i.e. FHA, VA, HAFA Non GSE, HAFA Fannie, HAFA Freddie, USDA..... and know why this is important.

Be sure any major repair issues are addressed at time of listing. These could put limitations on the type of Buyer you are looking for. For example: If it needs a new HVAC system a Buyer will not be able to use FHA financing.

Be in complete charge of the transaction. Know what you can and can’t do then make sure the lender understands that you know.

Make sure the BPO agent has the information you need them to have PRIOR to them doing the BPO. And know what that information is.

Make sure you are aware of ALL liens on the property prior to taking the listing.

Understand that the Seller is not always the Borrower. That works both ways. Example: Child owns the property but the borrowers are the parents. Or...the Seller assumed a mortgage when they purchased the property but the loan is still in the original borrower’s name.

Stay focused on the transaction. Don’t let “drama” cloud your vision.

And most importantly, understand that “Short Sale Denied” means....this time. Find a new buyer and try again. And keep trying until you get the job done.

This is in no way a comprehensive list but it will give you some things to think about. Any questions?

DO YOU NEED SHORT SALE TRANING?

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Cameron Novak

The Homefinding Center - 1000 Palms, CA

Real Estate Broker since 2008

Nicely done Bryan - You should place your banner at the bottom of your text body. You're losing a bit of G juice by having it at the top.

Jan 21, 2012 07:45 PM

The Somers Team

The Somers Team at KW Philadelphia - Philadelphia, PA

Delivering Real Estate Happiness

As always, good tips Bryant! Will repost this on our FB bus page!

Jan 21, 2012 10:49 PM

Cheryl Ritchie

RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD

Southern Maryland 301-980-7566

Reblogged with this intro...

Here is my favorite blog post of the morning. It is a good reference to mail as a link to your new short sale clients as a spring board for conversation or it is also a good checklist to make sure all the relevant points are in order to have a successful short sale transaction.

Jan 21, 2012 11:43 PM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Ellie and Tonya. Market value is property specific. That means that if a property is a short sale it will be priced based on what other similar short sales are selling for. The market value for a short sale may be less than the market value of a regular sale. Plus the reason we price a tad over market value is because I want to be able to show the lender a pricing history showing them that we tried to get as much as possible for the property.

The market doesn't lie. When we initially price a property we may not get any showings. However we are very aggressive with price reductions. My listing agreement gives me the authority to reduce the price whenever I see fit. We reduce until it sells. The goal is to have the property under contract with 45-60 days. Unless of course a foreclosure date is very near and we have to accelerate things.

The whole purpose of pricing this way is so I an able to defend the purchase if I need to. If the lender comes back and wants more money I can show them in black and white why they won't get it......we already tried and failed.

Now having said all that, each market is different. Price based on what works in your market. Just remember the goal is to get as much as you can and at a price you can defend. Make sense?

Jan 21, 2012 11:48 PM

Ed Silva, 203-206-0754

Mapleridge Realty, CT 203-206-0754 - Waterbury, CT

Associate Real Estate Broker

Bryant, all points that cannot be overlooked when trying to do a short sale. The history on market with sufficient days between reductions is equally as important, especialy in a tough market.

Jan 22, 2012 01:05 AM

Keith Lawrence

Christie's International - Mahwah, NJ

ABR, SFR

All good tips on completing the short sale. Educating both the buyer and seller of what to expect in the transaction is so important.

Jan 22, 2012 01:14 AM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

I haven't checked lately to see if they have been discontinued but what about the home energy loans for FHA that allow a buyer to finance a new HVAC or, if that fails, a 203K? I often put "cash only" on listings for which I don't believe FHA will approve. I still get FHA offers on those short sales, though. Good list, BB.

Jan 22, 2012 02:11 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Elizabeth. Yes there are ways. I just closed a short sale with a FHA 203K rehab loan. The buyer put $30,000 worth of repairs on top of the deal. The short sale was with IndyMac and the FHA 203 K was with Wells Fargo.I was on both sides so had complete control. If the buyer was with another agent we may not have taken the deal.

So yes there are ways to do things. However it certainly makes the short sale more difficult. I would only recommend these options for folks that have experience and know what they are doing.

Personally I prefer cash deals so we don't have to deal with RESPA restrictions.

By the way I forwarded the buyer you sent me over to an agent on the coast.

Jan 22, 2012 02:23 AM

Melissa Zavala

Broadpoint Properties - Escondido, CA

Broker, Escondido Real Estate, San Diego County

I love the no drama philosophy. I've found that this is really one of the biggest problems plaguing agents these days--not only in short sales, but in all kinds of transactions. Another thing that is not on your list (not sure if it should be) is that 'no' doesn't always mean 'no'.

Jan 22, 2012 02:30 AM

Richard Alan Naggar

people first...then business Ran Right Realty - Riverside, CA

agent & author

These Shor Sale pearls are from someone in the trenches....you cant make this stuff up and this reminds of the time when a friend of mine came running to me one day and said he found the perfect rental agreement. I said lets find the one who crafted it....You are that man...that specialist behind the result..good job Bryant

Jan 22, 2012 02:59 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Melissa. I agree that agents are notorious for their drama. I truly wonder how some folks can survive in this business. Relax. Think about the issue at hand. Then solve it. Easy peasy.

Well that's awesome Richie!

Jan 22, 2012 03:55 AM

Dawn Maloney

RE/MAX Trinity Northeast Ohio Real Estate Specialist - Hudson, OH

330-990-4236 Hudson & Northeastern Ohio

"And most importantly, understand that “Short Sale Denied” means....this time. Find a new buyer and try again. And keep trying until you get the job done."

That is the most important, definitely. People don't understand why I don't get crushed when we get a no. That is because I know how this works. I don't give up unless all doors have been shut permanently...and even then I tell the seller to continue in a different vein - contact attorney, contact mortgage fraud dept., contact OCC, contact FBI, etc.

Great post!

Jan 22, 2012 04:15 AM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

The term short sale definitely does not refer to the time-line. I have seen some of the lenders show great improvement in that area though.

Jan 22, 2012 04:28 AM

Christine Donovan

Donovan Blatt Realty - Costa Mesa, CA

Broker/Attorney 714-319-9751 DRE01267479 - Costa M

BB - Good points. There are many things to consider when doing a short sale and many things that can kill the deal if not done right.

Jan 22, 2012 06:07 AM

Kim & Kristine Halverson

Sotheby's & Knipe ERA - Bend, OR

Sisters, Realtors

Good tips! Market value is such an issue now even if I show them the listing history. ugghhhh!! on wards and up wards. Kristine :)

Jan 22, 2012 06:09 AM

Satar Naghshineh

Satar - Amiri Property and Financial Services Corp. - Irvine, CA

You have come a long way in short sale knowledge since I joined. Great points.

Jan 22, 2012 05:29 PM

Lang Premier Properties

Lang Premier Properties - Clawson, MI

Metro Detroit Real Estate Group

Thanks for the advise. We also specialize in short sales and love all the tips we can get!

Jan 23, 2012 08:03 AM

Deborah "Dee Dee" Garvin

C2 Financial - San Diego, CA

C2 Financial

BB, Great advice. ...If I may add my .02 cents.... If you know the HVAC needs to be replaced (or any major repair), consider listing with a 203K option. NO, they do not take 60, 90, 120 days to complete...30 to 45 is the norm. However, a streamline could be done in days. Agents understanding the FHA 203K program and process...and knowing when to work with it...could move a lot of short sales and REO's much faster. Just MHO.

Jan 25, 2012 01:50 AM

Kimberley Rosenstein

HomeSmart - Scottsdale, AZ

Superior Service

Thanks for the post! Always appreciate any tips people have regarding short sales.

Feb 01, 2012 08:10 AM

S W

Centerville, KS

Thanks for all the short sale information. I am currently working on my first one right now and things have gone fairly well. While short sales are a larger part of the market than they use to be in Kentucky, it is apparent from your advice that Florida's market is still dominated by short sales!

Feb 15, 2012 08:41 AM