Short sales...What to expect in 2013

2013 is going to be a huge year for short sales. The lenders are going to be working with Realtors to get these transactions closed in a stream lined manner however; how fast they get approved and closed are going to be our responsibility as well. The lenders will be looking for the following:
1. A qualified home owner. There needs to be a valid reason and hardship to justify a short sale. The stronger the hardship the stronger your chances are at getting the short sale approved. This will also give you the ability to set expectations with your client and all other parties involved such as a buyer and the buyers agent.

2. A complete short sale package with no holes. The goal is to get everything submitted whole and complete the first time around. All documents need to be fulled out in its entirety. We have been seeing RPA contracts and RLA contracts coming in without all of the signatures and initials. This slows the process when we have to chase down signatures. In addition; not all lenders accept Doc U Sign. It is a suggestion to always get wet signatures upfront.
Certain lenders require their own financial packets to be completed. The key is to follow the listing agent packet we have designed for Realtors. It is a platform that will ensure that you gather all the appropriate documents specific to your clients lenders. You can contact us directly for a copy if you do not already have one.

3. An offer that makes sense. We need to be able to justify the offer we bring to the table. Lenders will be looking at market time, comparative market analysis vs the offer and what is owed on the property. Conventional and cash deals are always encouraged for short sales and make for a smoother transaction. Government loans take longer to underwrite . If you have a sale date on the property this can cause a problem not to mention if there are costs the short sale lender will not cover buyers with these types of loans in most cases are unable to help with those costs.
We have also seen investors write offers at asking price and then once the lender issues a short sale approval they want to reduce their offer at a price that suits them. That is not how this game works with the lenders and quite honestly it puts all parties involved in a bind especially if there is a future sale date on the property. The duty is to the seller and the lender in the short sale. There are plenty of buyers out there that are willing to pay asking price. If you sense this is taking place then you will need to take the appropriate actions to get the property back on the market and get an offer that will satisfy the bank.

We are here to help you put your transactions together and if the procedure is followed there is success on the other side but it takes the cooperation of all parties to make it happen. It is a suggestion that you contact us before you take a listing so we can discuss the details of the transaction and how it should be structured. We look forward to working with all of you.

A few extra tips
1. If you are a REALTOR putting in an offer on a short sale and representing yourself the lender may not approve your commissions.

2. Lenders are selling off loans to other companies. If you have a short sale in process and this happens your client will receive a letter in the mail with the new lender information. You will need that in order to proceed. A short sale package will need to be submitted and you will most likely have to request updated pay stubs and bank statements from your client.

3. Fannie Mae and Freddie Mac short sales take longer to underwrite. This expectation should be set with all parties.

FROM BANK OF AMERICA
The Bank of America Cooperative Short Sale Program may be able to help your clients complete a short sale if they owe more on their mortgage than their house is worth and do not qualify for the Home Affordable Foreclosure Alternatives (HAFA) short sale program. This program can streamline the approval process and offers financial assistance to help homeowners with relocation and moving expenses.

As of January 15, 2013, there will no longer be a temporary foreclosure hold during the Cooperative Short Sale property marketing phase. We may begin or continue the foreclosure process up until a submitted offer to purchase the property is approved by all relevant parties. Any existing short sale will not be impacted by this change.


REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?

Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS

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