10 WAYS TO SPEED UP A SHORT SALE

July 16, 2010 at 5:36 am Leave a comment

By: Maria Hass

Short sales is a complicated transaction. It is likened to conducting an orchestra where all musicians play the same note to produce beautiful music. Just as in a short sale, the buyer, seller, seller’s lender, Realtors have to agree to the terms of the seller’s lender to consumate a short sale. There are many reasons why a short sale could fail. In order to prevent an unsuccessful short sale and expedite the transaction, here are a few tips.

1. QUALIFYING AND PREPARING THE SELLER- The seller should be committed to the short sale and is convinced that the short sale will benefit his future. Seller’s who are better informed about the expectations of a short sale are less likely to change their minds during the process. Such expectations include, the possibility of the seller’s lender to ask for upfront cash, promissory note, long wait and any legal or tax consequences of the short sale.

2. PREPARING THE HOME – A home that is clean and staged well stands a better chance of receiving an offer quickly thereby expediting the short sale process. Successful Realtors will advice their sellers to show their homes to sell. Otherwise, the home does not get an offer and eventually lead to foreclosure.

3. SEND SHORT SALE PACKET EARLY- Some lenders will allow short sale packet to be sent earlier than the offer. By doing so, the short sale documents are entered in the system and a BPO is ordered. This will save around two to three weeks of waiting and will encourage buyers to send an offer if the waiting time for a decision is less.

4. QIALIFYING THE BUYER – After qualifying the seller, it is time to qualify the buyer who makes the offer. How long will the buyer wait?, Has the buyer made other offers to other properties?, Is the Realtor still showing houses to this buyer?, Can the buyer easily qualify for a loan?, Could the buyer qualify for more? (In case the seller’s lender comes back with a counter) The answers to these questions are important PRIOR to accepting the offer. WITHOUT THE BUYER, THERE IS NO SALE.

5. NON REFUNDABLE EARNEST – The $500 – $1,000 NON REFUNDABLE earnest money shows the commitment of the buyer to the home for 60-120 days while the short sale is being processed. Without this requirement, the buyer could walk away at any time and the seller is left to foreclose on.

6. PRICE THE HOME AT FAIR MARKET VALUE- Pricing the home right is crucial in determining whether or not the seller’s lender will approve the short sale. If it is priced too low, the bank could counter and the buyer may walk away. If too high, the house could sit for months without an offer while the foreclosure clock is ticking. In determining the price for the home, consider the CLOSED, PENDING AND ACTIVE WITH CONTINGENCIES. Pending and Active with contingencies will most likely be the SOLD listings by the time you get your short sale approval. When looking at CLOSED sales, consider those that closed very recently. Otherwise, they might not be usable comps by the time you get your acceptance to the short sale.

7. CUT OUT THE JUNK, GO CLEAN – A clean, full price offer is ALWAYS the best. It is easier for the seller’s lender to approve a short sale without unneccessary concessions by the buyer. The higher the NET for the seller’s lender the lower the risk of denial. If the offer is low, the seller should counter the offer until it makes sense for the lender.

8. MEET THE BPO AGENT AND APPRAISER – BPO is key to a short sale. It is a good practice for Realtors to meet the BPO agent or appraiser and provide them with comparable homes to support your purchase price, if possible. Let them know that YOU CARE about the outcome of this short sale. Establish a good rapport with the BPO person or appraiser. Even though, you were not able to determine the actual value of the home, the BPO person or appraiser will be keen and careful with their assessment after talking with you.

9. PROVIDE WEEKLY UPDATES ON THE SHORT SALE – Majority of the time, buyer’s walk away from the deal because they have NO CLUE about what is going on. Make certain that you provide the buyer’s agent a weekly update on the short sale to pass on to the buyer. Buyers are more likely to be engaged in the home if they know what is going on with the short sale.

10. ESCALATE – Be aware of the allowable time frames for a task to be completed. If the task is behind schedule, it’s time to escalate. If you think you are not getting anywhere with the negotiator, it’s time to find someone else who would listen. This could mean changing negotiators. A well processed short sale should not take two or three negotiators to make a decision or go through more than one committed buyer with a good offer.

Overall, if you are listing a short sale or any listing, DO EVERYTHING RIGHT AT THE VERY START (Pricing, condition, presentation of the home, preparing the seller). Accept a great offer from a committed buyer with the non-refundable EM check, make certain that the values are in line and escalate whenever needed. Lastly, pray hard that everything falls into place.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , .

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