Obviously Short Sales are back and going strong.  We didn’t deal with any in our office until early this year and I personally hadn’t dealt with one since 2003.  Back then I heard from a title officer that only 1 in 10 closed.  I wasn’t looking forward to it.

Now there are some real estate companies that will work with brokers.  They will do some sort of split of the commission on your listing.  You do all of the marketing and client contact and they will deal with the banks.  Not a bad deal based on the time I have seen some brokers take on some transactions.  I won’t name the companies here since I don’t know much about them yet but you can email me and I will pass it on to you.

For one transaction in our office, the bank took four months to give it’s acceptance…which was one week after the buyer walked away.  Luckily another agent in the office had a buyer for it and it closed two weeks later.  I have found that even though the buyer says they are willing to wait, they really aren’t willing to wait too long.

Here are some tips for your short sale listings-

• Once you have an offer make sure you have showing instructions to call you.  This allows you to meet the person doing the BPO (Broker Price Opinion) or appraisal of the home.
• Instead of talking the house up, you need to point out it’s flaws to the person appraising it.  Since they are somewhat disconnected they won’t be looking at it like a buyer who hears every noise and smells every smell.
• Make sure you listing verbiage doesn’t make the house sound as perfect as we often do.  The bank may see the listing and your pretty words may backfire.
• Be prepared to send your showing report from KimWeb so you can show how much activity.  Lots of activity and no offers is just as bad as no showing.  It’s proof of low interest in the home at that price.
• Don’t start the home at a super low price.  Start at a reasonable price and then ratchet it down 3%-6% every two weeks.   A huge drop from nowhere may be a hard sell to the bank trying to squeeze out a $1000.  Showing the bank that you methodically and logically changed the price will help to show that the previous prices didn’t work.
• If there is a 2nd mortgage, they often only get $1000 or so.  If the offer price cuts into the 1st too much they might not bite and might be willing to test a foreclosure auction.
• Get all paperwork ahead of time.  This is different with banks so call as soon as you get the listing.  But a letter explaining the sellers hardship, payoffs on all loans, borrower financial statement, and anything else pertaining to the finances of the seller and home will be helpful.
• Explain to your client all their options. Short sale is one of nine or so options they have and they can’t be led to believe that a short sale is the only one.

These are just a few of the tips I have been told or seen work.  They change bank to bank.  Right now in our office we have someone who has worked 8 years in the mortgage industry helping us navigate the waters.  He has the phone numbers to some of the higher-ups which has helped tremendously to get the ball moving.  In one case we were told that a BPO had been done recently.  After talking to someone higher-up, we found that the BPO was actually outdated and invalid.  Hopefully the new one helps us.

Because of the sheer number of banks out there, if you are not specializing in short sales or making it part of your business model, I recommend that you talk to real estate company, broker or consultant that does specialize in the process to help you.  This way you are truly helping the client and not learning the process while a client’s foreclosure is on the line.

photo via jsome1

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