You've lassoed your bank! Now don't get stuck with the "bull!"

 Short Sale Strategies for Sellers and their Agents

Getting your short sale approved is irrelevant...

...if it doesn't close!

The seller found a buyer! The buyer found a seller!  We're in contract!  

Fantastic! Just make sure that you don't leave yourself with a bunch of bull in the process!

Walking into Starbucks or _______________ (fill in the blank) I continually hear "My house got foreclosed on! I thought the short sale was going to go through, but it didn't!"

After processing short-sales for several years I've seen quite a bit!  Have I seen it all?  Nope! Nobody has, but these tips will not only help sellers get their homes sold, but from the other side will help buyers write offers strong enough that even with a soft listing agent you'll have an excellent chance of holding the keys to your new home at the end of it all!

Here are a few common situations that buyers, sellers, and their agents unnecessarily encounter far too often:

• Our buyer had written several offers and 'forgot' to tell us that they bought another house two weeks ago.
• When our short sale got approved, the buyers no longer wanted the property.  When we re-listed it, it was too close to the trustee sale date to get it closed.
• I think my real estate agent wasn't giving all my updated information to the bank in a timely manner.
• We got approval from both lenders, but when the buyer did his inspections a few things turned up that he wasn't willing to fix, and I certainly couldn't afford to fix it! (or it was an FHA buyer who wasn't able to make necessary repairs to close) so it foreclosed.
• The first loan said yes but the 2nd lender wanted too much to close.  The second just wouldn't cooperate.
• ...and on and on.

PLEASE, I implore you...
if you're going to write an offer on a short sale OR your are listing your home as a short sale...use an expert!

So let's get to the punch!  How can you best avoid having your short sale...fall short?

1. SELLER - Make your initial submission of your short sale packet P E R F E C T ! ! ! ! It will show the negotiator or single point of contact that you and your agent are ON IT!  These folks are people too, and making their lives easier will in turn make yours easier too!
2. SELLER - Keep in contact with your lender(s). If you KNOW that your Realtor is phenomenally successful at the short sale process, good for you!  You've got a real pro who cares and will follow through, good for you!  If you aren't   absolutely certain, advocate for yourselves. Keep in direct contact with your lender.  You may find that the bank is waiting for documentation that your agent never even asked you for.  I call all lenders...on all short sale listings...every Tuesday and Friday morning.  I do this regardless of how 'dialed in' the negotiator is.  It's happened more than several times where my single point of contact, "um...yea...she doesn't work here anymore!"  You want to know this NOW, not a month down the road.
3. SELLER - After your property has an offer that you agree to, list the property as "Pending, show for backup offers" not "Pending Subject to Lender Approval."  It's smart to keep at least one strong backup offer in the bull pen; two would be better.  As you get close to estimated close of escrow, make sure that your backup buyer is still interested.  If not...get another backup 'warmed up'. This eliminates a time gap in the event that your first buyer backs out.  
4. SELLER & BUYER - Make contingency periods start the day that the offer is accepted by the seller rather than approved by the lender. As a seller, you know your buyer is vested.  Does the buyer want it?  Then inspect it, or don't...but release all contingencies within 17 days of contract date. If your buyer isn't willing to do this, in this market, get a new buyer who is. As a buyer, the bank and your seller sees that you're willing to 'ride it out'.  Why wait until two weeks before your auction date to start inspections. Show them that you're the right buyer during the offer process and you'll have a higher likelihood of having your offer accepted.
5. SELLER & BUYER - Deposit earnest money deposit into escrow within 3 days of accepting the offer. This again shows both sides, and the bank that you're all vested in getting this closed. 
6. SELLER & BUYER - Make sure that your property is listed for sale "As Is."  Unless you have a unique circumstance, you're not going to want to make repairs on a house with which you stand to net $0 at close. As a buyer, don't expect your offer to be accepted with the expectation that concerns discovered upon inspection are going to be remedied by the seller.  Write it up "AS IS" even if the seller isn't asking you to.  Do your inspections.  If you don't want to continue after inspections, that's your safety net. Use it!
7. SELLER - If your short sale is fully approved, make sure to follow up with the buyer's agent regularly that the loan process is going as planned.  You don't want to find out that your buyer thought it would be funding in time but the lender (all of whom seem to be grossly understaffed at this point) dropped the ball and now you're facing foreclosure.
8. SELLER  - BUYER - Don't hesitate to contact me to discuss a possible short sale or if you are upside down or having other financial difficulties  Click here if you have any questions.

Updated market trends to come...

As always, I'll leave you with a little taste of wisdom:

“Trust is the glue of life. It's the most essential ingredient in effective communication. It's the foundational principle that holds all relationships.” 

― Stephen R. Covey

Until next time, and thank you in advance for remembering me when the topic of real estate arises.

Andy Blasquez ~ The last Realtor you'll ever need to look for.
DRE# 01826135

www.andyblasquez.com

Email me at andy.blasquez@gmail.com
Click here to reach Macky Hensel.

Please Follow me on Twitter and Re-Tweet these blogs.
Please Add me as a friend on Facebook 
Finally, please comment or ask questions.  Other readers may be wondering the same thing.  I love the feedback, critical or otherwise, and love the interaction: I love this job.

Thank you always for your support.

Short Sale 101: BTW...What is a short sale anyway?

When you're up to your elbows in jargon, idioms, and the practical vocabulary of any specific industry, you can forget the fact that not everyone on earth knows what you're talking about.  So here's a bit of an introduction to short sales for those of you who are (rightly so) confused about the terms and ideas you may hear around the water cooler.

What is a short sale?
A short sale is a sale of real property (typically your house) from which proceeds are less than the balance of debts secured by liens (your mortgage or mortgages) against the property. If the property owner cannot (or isn't willing to) afford to completely repay the liens, and the lien holder(s) agrees to release it's lien on the property and accept less than the amount owed on the note, you have an approved short sale.

If it was that simple, they'd all be done and gone.  The short sale process is certainly not that simple...nor that easy. Although short sales have been part of the real estate industry forever, they can be quite complicated.  Today's real estate market, still heavily weighted with short sales, demands a much, MUCH higher level of expertise than in the past.  It is your agent's job to keep you informed, advised, and most of all protected.  If you don't think you're receiving that level of service...fire them!

I've seen many, many homes that should have closed as a short sale (or short pay transaction) not get approved, ultimately resulting in the foreclosure of the listed property.  There are far too many people I've bumped into over the last few months who've obviously had their short-sales mishandled. This failure to close  and subsequent foreclosure is often accompanied by buckets full of heart-ache and resentment by all parties involved.   After your deal is botched is NOT the time to start asking questions.  That's why I'm here.  Click here to e-mail me a questions directly.

• What is a short sale
• Banks -vs- Investors
• Why do banks take so long to approve the seemingly misnamed "Short Sale?"

First let me start out by reiterating very crudely and simply that a short sale is when a property is sold at a price that leaves the seller "short" on funds to close.  Example: The seller's mortgage balance is $655,000 but the home's current market value is $415,000.  There's a $240,000 deficiency which makes this a short sale; a sale short of the balance of the debt.

Secondly, let's clear up the difference between a "Bank" and an "Investor".  B of A, Chase, Citi, Wells Fargo.or J.P. What's his name...(whatever name they've slapped on the front of your branch at the local strip mall)...may or may not be the investor behind your mortgage(s).  These enormous multinational corporations 'service" the loan for the investors.  Who are the investors?  You've got a better chance of having a dinner on Beale St. with the Elvis than ever learning who the investors are.  OH...but if you did...your debt would probably be sold to another 'investor' before you got approval for the servicing bank anyway.  It's best to just drop it.  Do what the servicing bank says, do it now, and do it right the first time.  The bank will, in turn, smile and move things along smoothly.

Lastly, a short sale is a complete misnomer.  They are typically not short.  That said, I've have them approved in as few as 8 days, and as long as several months.  The length of time it takes for approval depends on many things including the competency and speed of the following:

• The listing agent
• Possible third party negotiators
• The servicing banks' document collectors
• Your single point of contact at each bank
• The time it takes for internal approval
• The time it takes for final review and a decision by the investors
• Possible counter offers
• Changes on HUD statements from Title
• and on and on and on.

These are just a few thoughts that will help you get up to speed with the terms and complex nature of the short sale process.  With all of this in mind, remember this: Getting your short sale approved is completely irrelevant if you can't get it to close!

Tips and Strategies for getting your short sale to close will follow this post.

As always, I'll leave you with a little taste of wisdom:

“You will get all you want in life, if you help enough other people get what they want.”

~ Zig Ziglar RIP

Until next time, and thank you in advance for remembering me when the topic of real estate arises.

Andy Blasquez ~ The last Realtor you'll ever need to look for.
DRE# 01826135

www.andyblasquez.com

Email me at andy.blasquez@gmail.com
Click here to reach Macky Hensel.

Please Follow me on Twitter and Re-Tweet these blogs.
Please Add me as a friend on Facebook 
Finally, please comment or ask questions.  Other readers may be wondering the same thing.  I love the feedback, critical or otherwise, and love the interaction: I love this job.

Thank you always for your support.