Keep A Short Sale Short
Short sales are everything but short if you are new to doing them or do not have the appropriate resources. In many cases, they should be called long sales. That does not mean that they should be avoided because short sales are a large part of the market and if you are not doing them you are missing out on a large percentage of the market.
Stats
In 1997, only 4% of home sales nationwide required a short sale. In 2008, 13% of home sales nationwide required a short sale. Now, approximately 25% of all sales nationwide require a short sale! That is why it is important to understand how they work and know the tricks to getting them closed.
Top 5 Tips
Attend the BPO(Broker Priced Opinion)/Appraisal
In my opinion, this is the most critical step. If you or someone from your team does not attend the BPO, you might as well not even attempt a short sale. The reason why it is important to attend is because this is the value that the bank will use for all negotiations. I have seen many “Approved Short sales” and they are way above market value. The reason this happens is because someone didn’t attend the BPO. BPO agents are typically underpaid and try to get the BPO done as quickly as possible so they can get to the next BPO appointment. You do not want the BPO agent to rush through the house and miss vital information.
Always arrive at least 30 minutes early to the appointment. You do not want the BPO agent performing a drive by BPO because they will not evaluate the home correctly. It is your job to ensure that the BPO agent understands all the issues that are wrong with the house. If there is mold, foundation issues, leaks, or any other abnormalities with the house, point them out. If you have a contractor estimate it is even better.
You also want to make sure that the BPO agent does not work for a brokerage that represents REO properties. Sometimes the agents in these offices are told to always come in high with the BPO so that they can get the listing when it becomes a foreclosure. It sounds horrible, but it does happen so call the bank and demand a new BPO agent if their brokerage lists REO properties.
Have an emotional hardship letter
I recommend that the hardship letter is written by the woman of the household. Women are typically more detailed and emotional when they write. It should be your goal to have a letter that makes you cry when you read it. The hardship letter is read by another human being in the loss mitigation department at the bank and if you cry, they might even cry. I even recommend handwriting the letter since deeper emotions are passed through pen and paper as opposed to a keyboard.
Have an organized short sale packet
If you have a sloppy short sale packet, the bank will put you at the bottom of the pile. No one wants to leaf through 100 pages that are disorganized and not following the banks short sale packet instructions. Almost every bank has a slightly different package so it is a good idea to go to the respective banks website and download their package. You also want to put the loan number on every page of the packet and number each page. It is a very good idea to include a table of contents with your short sale packages as well.
Use a negotiator
Realtors are great at marketing and working with homeowners but Realtors are not trained extensively on how the shortsale process works. It is a good idea to work with shortsale negotiators that only do shortsales. Many times the negotiators know many of the loss mitigators at the banks since they have worked with them in the past. This usually means that they can get things pushed through quicker than an agent who hasn’t worked with that bank or that loss mitigator.
Use an investor if the house needs work
Investors are able to make cash offers on properties that need work. Investors will also stay in the transaction as long as necessary to get a shortale approved since they are not purchasing the house as their primary residence. If the price does not work for the investor, they will step out of the transaction and allow a retail buyer to purchase the home at a great approved price. Investors typically have negotiators that you can use for free and can provide contractor bids for the BPO.
Privacy Policy: We hate SPAM and promise to keep your email safe.