Short Sale Suicide...and How To Prevent It!
Also How To Determine If A Listing Agent Is Committing Short Sale Suicide...
A Two Part Series Presented by Sherman Smith
The Buyers Agent and Short Sales
Now I have told you what to do if you are the listing agent, but what do you do if you have a buyer who is interested in a listed property that is a short sale? Well first off, I try not to show any short sale listings that I have not talked to the listing agent first. Here is what I want to know:
- Do you have an approval from the bank?
- Do you currently have any offers on the property? If yes, how many and did you send them all to the lender. If there are offers and they sent more than one to the bank, forget the property.
- Is there a true hardship and what is the hardship? If there is no real hardship forget the property.
- How many owners are on title? If more than one are they all in a true hardship? If not forget the property.
- How many short sales have you closed? If very few offer to help or do the short sale for them. It is probably the only way it will close anyway.
- How many lenders on the property? Is there any equity for the second or third? If not how will you get them off the property? If no answer, forget the property.
- Have they been in contact with the banks? If so what has the bank said? If not why? Consider forgetting the property.
- Does the seller have all of the banks required documentation? If not things will be delayed.
- If you were to receive my offer and another offer at the same time would you send them both to the bank? If yes forget the property.
- Last but not least ask "What do you think the chances of getting this through are"? If the listing agent says 50% or less, consider forgetting the property. They have no faith in what they are doing.
Now you can see why 50% of all short sales fail to close. It is the listing agents fault for not doing their homework.
Notes: I use bank and lender synonymous with all type of lending institutions. The information here is not carved in stone. It is in generalities as to how short sales are done and yes there are exceptions to every situation. This is a guideline as to how to not waste your time on deals that can't be done.
Sherman Smith & Associates
1173 Irvine Blvd Tustin, CA