Short Sale Updates

I have added some important information and lender updates to the agent quick facts. Please take time to read it.


I had an interesting comment from a REALTOR the other day who referenced short sales as not being a real deal. I understand that because short sales are not potential re occurring revenue streams and that alot of us have experienced economic hardships that have forced us to work harder to support our families. The fact still remains that short sales have been and still are a very important part of the market. Education, skill and strategy are the only thing stopping a professional from being successful in the short sale arena.


Rewind the clock back 4 years ago, 2 years ago. How many short sales did you close back then? How many homeowners did you help avoid foreclosure? And finally, how many of those clients you helped do you stay in touch with? Because here is the reality; some of those homeowners that you helped 2-4 years ago are able to buy again. Have you followed up with them? I would like to encourage you to not shy away from short sales. If it is done properly you will be setting up your revenues for the future when those homeowners are able to buy again. All deals are real deals if they are done with integrity and good intention.


Here is an article on CNN Money I would like to share with you entitled "Boomerang buyers return to market after foreclosure " http://money.cnn.com/2013/03/11/real_estate/foreclosure-homes/index.html


UPDATED AGENT SHORT SALE QUICK FACTS AND LENDER REQUIREMENTS


Communication/Time Frames



1. When your file is submitted to Lotus Realty Group one of our representatives will do an audit of your file and send you a needs list of all outstanding documents. We will not submit a short sale package to the lender until we have a whole and complete short sale package. We understand these transactions are time sensitive.


2. If you are unavailable or will be out of town we will need the information of who will be assisting you with this so we can work with them on getting what we need to submit a package.


3. Lotus Realty Group will update you weekly every Thursday. If there is any information or requested documents from the bank we will contact you sooner. Please allow us to work with the bank and adhere to the time frames.


4. Every transaction is different and unique. Some approvals come faster than others however; the more solid of a package we have the faster we will move through the system. We do not have connections to move files along faster. They have to go through the normal time frames. If the normal lender time frames are not honored at that time we will push to escalate. There is no magic to this. It is all strategy. It is the responsibility of the listing agent to prequalify their clients and use the platform we have created and follow our guidance.


5. Fannie Mae and Freddie Mac deals take longer to underwrite so you will want to set expectation with seller and buyer. In addition, they are driving values up to minimize their loss. There will be some challenges with these types of transactions. It is important that we know if it is a Fannie/Freddie deal upfront so we can ensure we have a decent market time and listing history to show the investor when it comes time to dispute their counter.


6. From the time of submission it can take anywhere from 30-90 days before we may see an approval. The bank typically looks at how many days the property was on the market to see if the property was marketed for a substantial amount of time, comparative market analysis, the value of the offer, what is owed on the property and how strong the hardship is. We suggest that you complete the listing agent packet with the seller questionnaire before listing the property and discuss with a representative at Lotus Realty Group so we can determine together if this is a deal you should take or what we need to do in order to structure it properly.



7. Please send all short sale packages to INITIATE@LOTUSREALTYGROUP.COM


Lender updates


1. Green Tree wants all sellers to call in and do a survey first to see if they qualify for a short sale. At that point they will order a BPO. Once they receive it they will assign to a processor.


2. We have seen lenders require homeowners to call their lien holder first and inform them they do not want to do a loan modification they want to short sale. It will save you alot of time if you advise your clients to this at the time of taking the listing.


3. Citi Mortgage has been requesting sellers that are married that originally had an FHA loan to have two separate hardship letters signed and dated.


Commission


1. The seller and listing agent cannot be one in the same.


2. Listing agent cannot be related to the seller or the buyer.


3. If the buyer’s agent is also the buyer, the short sale lender may reduce your commission or they may decide to eliminate your commission all together.


4. If the agent is representing both buyer and seller the short sale lender may reduce your commission

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Contracts


1. It is imperative whenever possible to use our counter and addendum in the listing agent short sale packet for all potential buyers on your short sale listings. This will set expectations as to who will be responsible to pay fees that the short sale lender will not agree to pay.



2. The SSA needs to be initialed and signed by BOTH buyer and seller.



3. All items incorporated into the RPA on page 4, need to accompany the offer as the bank will require these.



4. Not all lenders accept Doc U Sign. It is a suggestion to get wet signatures up front to save time.



5. If the buyer is an LLC or incorporated, we will need the Articles of Incorporation and Operating Agreement. The signatures on the RPA need to match the LLC or incorporated documents.



6. Cash buyer proof of funds need to be within 30 days.



Sale Dates



Most lenders require a full short sale package to be submitted 15 days prior to a sale date to consider a postponement. If there is a sale date on the property in two weeks and we do not have a short sale package in place with an offer we will not be able to take this type of transaction. There may be exceptions granted however; we generally do not take these circumstances on due to the success rate being extremely low. If the listing agent packet is complete and we have had a chance to go over the seller questionnaire together to determine if this is a transaction we can successfully close we will eliminate most if not all of these issues. If your client is delinquent 12 months plus there is a minimal chance the date will get postponed.



Please contact us with any questions or short sale scenarios you would like to discuss. We look forward to working with you.



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


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...