YES! YES! YES!
I constantly hear agents say that they'll never do a short sale because they are a pain in the butt or that the lenders won't do them anymore. Well, to those agents I do have to say that they are correct. They are a little time consuming and SOME banks have been difficult to work with BUT all in all, I have a great system in place to get them done and have found more business then I can handle because I am willing to work on these things.
I work short sales for a number of reasons, such as, when I list a home, I get another sign with my name on it out in the market, I also get a lot of buyer calls which I can convert into buyers to work with, I also find other sellers to work with, and on top of all of this, I even get purchase agreements for the homes and several of them close!
You can negotiate EVERYTHING with a short sale. You can ask the bank to show the loan paid in full on the sellers credit report, you can negotiate a cash settlement to the bank on the loss (maybe 10 cents on the dollar of the sellers pay the loss in cash), you can negotiate a payment plan for the deficiency and ask for the loan to reflect paid in full on their credit report, you can negotiate the interest rate and payment of any amount you wish to pay back, etc... You just need to keep in mind that all of this is negotiable.
You need to have a system and a checklist in place when working these files. You will usually need the same basic elements from your sellers that most banks ask for. Here is a list of items I ask my sellers for right when we list the home. If you ask for these up front, you too will be able to navigate through a short sale much quicker and have more success.
Keith Maahs' list of items needed for a short sale:
1. Authorization to release information to Keith Maahs signed by the seller with their name, address, loan number, and last 4 - digits of their social security number, this is faxed to the customer service/short sale department
2. Letter of hardship explaining why they are asking to be released from this loan
3. 2 Months of current bank statements
4. One month of current paystubs
5. W-2's
6. Tax returns for 2007
7. Financial statement
8. Budget letter shoing where all of their money goes, i.e, monthly gas, groceries, average monthly costs for birthdays and Christmas, phone, cable, cell phone, utilities, etc...
When the home sells, you'll need:
1. An estimate of net proceeds (it will be negative)
2. A copy of your listing agreement, the bank will state a maximum brokerage fee, you can negotiate this
3. A copy of the SIGNED purchase agreement by all parties, subject to bank approval
4. I send in comparables and feedback from agents who showed the home
Good luck on those short sales. By the way, many sellers need you to help them with this because it is more important to try to settle with the bank then to simply walk away. Penalties are getting stiffer for homeowners who simply walk away. They need to at least try to do something to satisfy the bank.
Keith Maahs
763-412-1203
Keith Maahs has developed a system for agents to average one unit a week. His system called Elite Sales Sales Academy, a Boot Camp for Realtors, has seen unequalled success to this day. Keith is still active in real estate sales and is available to speak at your next sales meeting or conference. Call or email him for his availability.
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