Short Sales In Palm Beach County Florida- Part 7 *Inside The Process*

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Short Sales In Palm Beach County- Part 7- Inside The Process

To understand the entire process of Short Sales In Palm Beach County Florida please read the articles below before reading this post. This will give you a greater understanding to where we are in this series on Short Sales:

Short Sales-Part1- What You Need To Know
Short Sales- Part 2-Are You Qualified To Do A Short Sale
Short Sales- Part 3- What you need to do to Prepare for The Short Sale
Short Sales- Part 4- What The Buyer Needs To Have With A Short Sale offer
Short Sales- Part 5- Myths and Truths about Short Sales
Short Sales- Part 6- After The Offer Comes In

The short sale package which includes the offer is now in the hands of the third party lender. Depending on how the lender is handling their short sales, this is the point where you need an agent who is working with the seller to really know what they are doing and how to negotiate with the seller's lender.

For illustration purposes we will call the person we are dealing with at the lender the 'negotiator'. Different lenders have different titles for this person but to make things simple we will stay with the term 'negotiator'.

The negotiator takes the file and checks to see if all the documents are in the package and if the file is complete. Each negotiator may have upwards of 140 or more files coming in per day. They must process these files as fast as they can. Any incomplete file is not going to be attended to in a timely fashion so make sure it is all correct to begin with.

Once the negotiator has checked the file and has determined it to be complete he or she will order a BPO.

What is a BPO?

A BPO is a Broker's Price Opinion. The lender will hire a real estate agent to do a pricing report and come back to the lender with the information as to what that individual believes the fair market value of the property is right now. The BPO must consider the last solds in the neighborhood that the property is in and if they can not find any comparables in that neighborhood then they may go outside of the neighborhood to find a property of like kind. This process usually does not take long. We usually see then done about a week after the negotiator has received the package. That agent will send their BPO back to the lender.

The lender then calls us to tell us what the note holder will accept as a net figure. This net is based upon a formula that is used to estimate the losses the lender can incur. What we have seen for Short Sales in Palm Beach county Florida is about a 10% to a 15% discount off of the BPO. The BPO defining what the current market value of the property is.

We then take the net amount that the lender has agreed to accept and work with the present offers we have to see if any of them will meet these numbers. If all of the offers are too low then we will call each of the buyers' agents and tell them the offer is xxx amount of dollars away from happening. The agents can then tell their buyers what the price will need to be for them to get this particular house. If the buyers want to meet the price then we have a deal and we start all the closing procedures and loan procedures for the buyer's side.

If the price is too far away to work then we put on all our marketing and Multiple Listing Service the price that is going to get this property.

Once the BPO is in; generally it is easier and faster to sell the house. When agents call us for showing instructions we can tell them about the BPO and that their buyer is now in a position to have a quick closing. We just closed on two short sales last week and both of them had their BPO's done in December and we closed in February. That was not that long of a time to get to closing. In fact one of them was ready to close in January but our seller had some bankruptcy issues that needed to be addressed before we could close.

The problem that we see causes the most problems with the successful closing of the short sale is the lack of experience of the real estate agents involved. Nestor is on that phone with the lenders every 2 to 3 days checking on our files. Someone who knows how to deal with people must be on that phone with the negotiator, checking on the progress of the file and the state of where in the process this file is at.

The HUD1 Settlement statement is the other item that needs to be perfectly correct when it gets sent to the lender with the offer and short sale package. Make sure every single fee is on the HUD or else you won't have a closing and you as the agent will have to pay the difference in the errors on the HUD. Once the HUD has been approved by the third party lender it is highly unlikely to approve any changes so pay attention to detail for a smooth closing!

Katerina Gasset Subscribe to my Blog

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Contact Nestor Gasset and Katerina Gasset, CIPS, Realtors®, International Properties and Investments, Inc. Licensed Realtors® in Florida at 561-753-0135 to list your property for sale or to purchase a property in Wellington, Royal Palm Beach, Loxahatchee, Lake Worth, Hypoluxo Island, Lantana, West Palm Beach and the rest of Palm Beach County Florida. We are accepting referrals.

Copyright © 2008 By Katerina Gasset, All Rights Reserved. *Short Sales In Palm Beach County Part 7- Inside The Process* Contact Katerina Gasset for Customized Business and Personal Coaching.

Visit our profile to find out more about our services. Call us today at 561.753.0135 or Toll Free 800.444.3316. Contact us by email if you prefer by clicking on email me on the right side of this page under our profile.

To view all the Wellington Florida Luxury Homes For Sale Click here and then click on Multiple Listing Search where the globe is on the right side of the screen that opens up. We know Palm Beach County and will help you get your home Sold if you need to Sell your home and help you buy your Wellington Home or Land ; call us today.

Disclaimer:The information provided herein is supplied by several sources and is subject to change without notice. Wellington Homes Blog does not guarantee or is any way responsible for its accuracy, and provides said information without warranties of any kind, either express or implied. Entries on Wellington Homes Blog represent the opinions and ideas of the author(s). Wellington Homes Blog does not express the views of International Properties and Investments, Inc or those of the broker.

P.S. If you are listing your home as a short sale in Palm Beach County Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 561-753-0135 to find out more about Palm Beach County Short Sales.

 




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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Wow, that quite an information packed post. I am happy I ran into it, as I am about to do my first one. Thank you
Feb 28, 2008 05:55 PM #1
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Patricia Kennedy
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Katerina, I've been sending agents up here to your blog - most of them are totally clueless about short sales.  It's like they've read somewhere that if you go to the bank with a low offer they might work with the seller.  

And, yes.  They might.  Or not!  What great information you have here! 

Feb 28, 2008 09:39 PM #2
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Dan Forbes
Bradenton, FL
Katerina, good job with this series. By the way, I have talked with netogiators with as many as 400 files.
Feb 28, 2008 10:17 PM #3
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Renée Donohue~Home Photography
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Congratulations on your short sale success!  I think only people who know & understand the process should be the ones that get these listings.  Can I tell you how many times I run into an agent who doesn't know what a BPO is or understand the process?  What a disservice to his/her clients!
Feb 29, 2008 12:09 AM #4
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Katerina Gasset
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Bradenton Florida Real Estate - Dan Forbes REALTOR®

Dan- Thank you for your comment. I said that they get as many as 140 files in a day- that could very easily become 400 files in a week on their desk. There is no way that one person can process all those files in one day.

 

 

 

 

 

 

 

 

 

i  

Feb 29, 2008 12:39 AM #5
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Katerina Gasset
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Jon Zolsky, your Daytona Beach connection  

Jon- Make sure you read all this series on short sales, the links are all at the top of the blog so you can make sure you have the package done just right. Good luck.  

Feb 29, 2008 12:41 AM #6
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Katerina Gasset
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Patricia Kennedy

Patricia- Thanks for sending them over. It is a specialized niche and you really need to know what you are doing or else you can blow the whole deal which I have witnessed many times. 

Feb 29, 2008 12:43 AM #7
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Renee Burrows - Las Vegas NV Real Estate  

Renee- Our short sale testimonials are starting to come in so that will help us to show we do know what we are doing. It is amazing to me that with such a sue happy society that agents take the short sale process so lightly and do it with no knowledge of what they are doing. 

Feb 29, 2008 12:45 AM #8
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Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
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Katerina, How big of a hit are your lenders taking? Is a lease option or "subject to" a possibility in your area?

Bill Roberts

Feb 29, 2008 01:59 AM #9
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Bill Roberts - "Baby Boomer" Retirement Planning

Bill- Lease options are pretty much frowned upon here because of all the foreclosures. Many people were taking lease to purchases and lease options, taking the $ and running, to allow the bank to foreclose.

We just closed on one where the seller owed $598,000. The BPO came in at $376K and they accepted a net of $311,000.  

Feb 29, 2008 07:58 AM #10
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Fran Gatti
RE/MAX Integrity - Medford, OR
Managing Principal Broker - RE/MAX Integrity

Our county has a very low foreclosure and until now, short sale rate, that when I asked for the HUD 1 with the fees from the title company, they weren't sure what I was looking for.

 

Mar 11, 2008 04:58 PM #11
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Fran Gatti - Crescent City CA Real Estate

I make sure the title company has an attorney on staff, first and foremost.

Then you must have the title company project out a few months down the road with the HUD1.

They must every conceivable fee on that initial HUD, with buyer and sellers names on the HUD, including buyers side as much as you can without mortgage fees for buyer of course.

You must have taxes checked, title checked for liens, etc. You must have a title company that is willing to work on files even if they don't close. NO complaining here! We fired our first title company for complaining about their losses when we lost more by not getting the Estoppel letters back from 2 HOAs. There was a master and a JR HOA; 2 different companies, we did not know about the master hoa and the seller had not paid them for almost a year. HOA refused to negotiate their fees down, which was  a first for us, because we have gotten all the other HOAs to negotiate the fees, better than getting nothing on the courthouse steps. 

Whatever is not on the HUD and then gets put on after the HUD has been approved and the net amount comes back from the note holder; you will have to eat it just to get the deal closed. 

Then you will never make that mistake again!!!!!!!!! We live and learn, RIght?  

Mar 11, 2008 05:12 PM #12
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Lynn Pineda
eXp Realty - Boca Raton, FL
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Katerina, I've just came across your series on Short Sales and they're fabulous. Congratulations.  Your clients are fortunate to have you fighting for them. This is why when I have a client in your area, I know who to call!  Agents should seek out other Agents such as you and Nestor who have chosen to go the extra mile to help the distressed homeowner. I'm here in Coral Springs doing the same thing.
Mar 25, 2008 09:33 AM #13
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Katerina Gasset
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Lynn- I read your website and I see that you are all about helping the homeowner get through rough times and help them move on with their lives. Thank you. We work smart on our files and that is why we can get to the closing table. 
Mar 25, 2008 11:05 AM #14
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Lynn- I read your website and I see that you are all about helping the homeowner get through rough times and help them move on with their lives. Thank you. We work smart on our files and that is why we can get to the closing table. 
Mar 25, 2008 11:05 AM #15
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