Short sales often take three times longer than a traditional transaction and sometimes never close at all. By hiring an agent who knows to avoid these twelve barriers, the process can be less stressful.
1.) Poor short sale candidate
- Establish objective criteria
- Conduct an extensive interview with homeowner
- Ascertain seller is motivated and cooperative
2.) Agent lacks familiarity with the lender’s requirements and procedures to complete the short sale
- Harvest and maintain lender and investor guidelines
- Secure individual forms required for each lender/servicer
3.) Title exam not obtained in the beginning
- Identifies individuals on deed and mortgages
- Determines all lien holders
4.) Incomplete package submitted to the lender/servicer
- Focus on the quality of the package at time of submission
- Detail orientation is critical
- All docs completely executed
- Complete package allows process to flow faster
5.) Short sale not begun prior to receiving a contract to purchase
- Adds 30 to 60 additional days
- Lender never looks at buyer contract until seller candidate is approved and market value has been determined
6.) Complete package not maintained throughout the short sale process
- Must keep all required homeowner financial information current and forwarded to the servicer every 30 days
7.) Lack of communication with the lender
- Most negotiators overwhelmed by the number of individual cases they are working on
- Misunderstandings, loss of documents, and/or lack of familiarity with files are very common
- Agent must continue to follow-up with the servicer twice a week to reduce unnecessary delays
8.) Poor record keeping /documentation by agent
- High probability of changes in processing personnel
- New person often lacks familiarity with case.
- Has to rely on the quality of notes in the file
- Information is often lost or missing
- Agent’s role is to help fill in the gaps
9.) Professional relationship with the negotiator never established
- Stressful environment
- Lots of frustration
- Lack of respect and trust are common
- Begins with building rapport
- Can be a big game changer
10.) Failure to meet BPO/Appraiser at the listing
- Without a detailed inspection of the property inside and outside the value will be distorted
- Meeting BPO at property provides great opportunity to share information that might not otherwise be discovered
11.) Fair market value dispute
- Common in most markets
- Negotiators lack current relevant information on most markets
- Forced to make decisions based on the data provided by BPO and information in the lender package
- Agent must be willing to provide additional current, detailed, relevant information (ie. local market, economy, demographics, and property condition) that can have an effect on value.
12.) Failure to “escalate” to higher authority when communication breaks down
- Escalation is part of the short sale process
- Escalating to a supervisor can be the key to moving forward
- Upper levels of every lender’s short sale department are working toward one goal– avoiding another foreclosure
Avoiding these dozen pitfalls will increase your odds of success while reducing everyone’s time and stress.
