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!
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.
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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.