Most common pitfall in a short sale transaction

One of my goals has always been to help REALTORS maneuver through the pitfalls that can occur in a short sale transaction. There are more than a few however; one in particular has been a reoccurring issue and has become one of the top 10 most crucial points in short sales today; BUYERS LENDERS.

When a buyer chooses a loan officer to work with it is usually a family member, a friend or a referral from a friend. Have you ever been in a situation where you were in need of a particular service; you had a friend in the business applicable to your situation; so with a sense of obligation you entrusted this person to handle the details but in the end you didn’t get the service necessary to accomplish what you needed to accomplish?

I have negotiated over 100 transactions and a majority of them were for REALTORS where I was not in control of what vendors were used. In my experience I have seen short sale transactions nearly blow up at the end due to a buyers lender of choice not following through in a timely manner and ignoring the following;

1. Is this buyer truly qualified?

2. Deadlines

3. Short sale approval dates

4. Foreclosure sale dates

5. Getting docs out in a timely manner to fund and record on the approved date from the short sale lender.

Yesterday I had an experience with one of my own listings. More than 2 months ago I had set expectation with the buyer’s agent before accepting her offer. I explained the special circumstances in which my sellers were in. They are elderly people. Not in the best of health and had moved out of state. They do not have access to technology. All document collection and signing has to be done by mail and the sellers turn time is 3-4 weeks. We have a close date of 10/03/2011. The home is in active foreclosure status. I explained there could be no room for error on this and the buyer’s lender truly needed to be on top of the loan to ensure we can get docs in an appropriate time frame to fund and record on time. If we requested an extension we would run the risk of the short sale lender asking for updated financials and then they would have to resubmit for approval. With my sellers turn time of 3-4 weeks I would not be able to coordinate all parties and deadlines to close this deal. We would all be chasing our tails.

I received a call from the buyer’s agent and her broker that we would need an extension due to the buyer’s lender WAITING ON APPROVAL FROM THE UNDERWRITING DEPARTMENT.

Unacceptable! I called the loan officer and she said there was nothing she could do. I requested the number to the underwriting department and called to speak with the supervisor. He informed me they had a 3 day turn around. They had the file since 9/23/2011. We had already went over there so called 3 day turn time. The supervisor was kind enough to look a little deeper and sure enough our file was at the bottom. With ONE CALL I was able to get that file moved to the top and should have docs out by Friday to make our close date.

I have realized after running into this issue repeatedly that no one else is going to treat my file with the respect and attention that it needs and it is my responsibility to be on top of all parties involved in the transaction ICLUDING the buyer’s lender. The reality of situation is as follows:

1. Extensions are not raining out of the sky these days. Short sale lenders want to close in the time frames they allow. Some files have already had their max allowable extensions. One more can cause the deal to blow up.



2. Short sales are time sensitive. When there is a foreclosure sale date on a property and we continuously ask for extensions are luck is wearing thin. It is imperative that the buyer’s lender is working the file from the beginning to the end paying attention to crucial dates and putting the files in HIGH PRIORITY STATUS that have these important deadlines and special circumstances listed above.





3. We as agents cannot sit and accept when a loan officer says there is nothing they can do. That statement cannot be further from the truth. There is always a solution. The bottom line is a loan officer has to be willing to go the extra mile to make it happen and if they are not then there is a lack of taking responsibility on their part and treating each file as a high priority.

Is the goal not to close deals so that EVERYONE WINS?

Experience has taught me that there takes a certain level of aggressiveness and tenacity to complete short sales. We have to be willing to take it to the next level if necessary and not accept anything less than an excellent performance in all parties involved in the transaction to get the results we need and if we cannot find it in others, well, and then we must do it ourselves.



Tips of the day:

a) Have a trusted lender to get DU (Desk underwriting) approval for any buyer on your property.



b) Set proper expectations with all buyers’ agents; they need to be on top of the buyer’s lenders to make sure they are doing everything in their power to ensure a smooth transaction and treating all deadlines with care and concern.





c) When a loan officer tells you “There is nothing else I can do” DO NOT ACCEPT THAT. I have seen mountains move miraculously at the last minute when a fire is lit.



(Quote) “Working together, ordinary people can perform extraordinary feats. They can push things that come into their hands a little higher up, a little further on towards the heights of excellence.”



The location for our Event with David Bright on 10/6/2011 between 11:00 am and 1:00 pm has been moved to the Cardiff Library. At 2081 New Castle Ave , Cardiff, Ca 92007. We will send out reminders to all that have R.S.V.P




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...

Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com




"Lotus