I just went to another "Short Sales" seminar today and actually learned a few new things. The seminar was taught by the VP of the Loss Mitigation Dept of a major bank. One of the brokers of another real estate company in town put the seminar together and invited top producing agents in town to attend for no cost. The broker said it was hard to get bankers to call him back much less agree to speak to a room full of real estate agents. The broker told them they were missing the boat since agents are the ones working with their mortgage clients trying to facilitate short sales and keep them all out of the foreclosure process.
At any rate the seminar was informative. The VP told us the process for short sales and what the bank is looking for. A few of the items are: a valid offer (with a preapproved buyer, letter attached), a completed HUD 1 statement with all costs listed so the bank can see where they stand and if there are any other lien holders involved, a completed financial package from the seller (listing assets etc), a viable CMA/valuation, and any other market related information. The VP said that when the offer is presented as a complete package it increases the chances of being accepted or at least negotiated.
The agents kept pressing the VP for a "magic" number that the bank would accept for an offer and he could not give an answer. The agents were looking for a percentage of the valuation price (example; if the house was valued at $100,000 would the bank take 70%, 80% of that etc.). The VP said there is no simple formula it depends on location, condition and the amount of money they have spent on pre-foreclosure/foreclosure proceedings to that point. He did say that at this point they were taking on so many properties that the practices and formulas they used 3 months ago are no longer valid. They are having to re-examine their practices almost monthly to stay ahead of the "game". He said six months ago they would not have considered "Deed-in-lieu" of foreclosure but now they will.
It is an avenue worth exploring whether you are on the listing side or the buyer's side. There are deals to be had! What is the Short Sale market like in your area?