Short Sales are one of the hottest buzz words in Real Estate today. Buyers want to buy them (they think) and sellers

Working as a Team to complete Short Sales

want to sell them (they think) but most people don’t really understand them, and everyone you talk to has a different opinion about them.

We did a survey to Realtors across the country asking for opinions, tips, ideas, and stories about short sales and here are some of the responses:

“Perserverance and strong document preparation skills are two of the most important traits a short sale agent needs. I work on shortsales 7 days per week and see all sides.
Buyer issues, seller issues, lender issues. I am able to sucessfully navigate the process but it’s not easy. If you are interested let me know.
Good luck.” – Lisa Johnson

“A buyer that is considering a short sale needs to be ready to invest a lot more time than a typical real estate transaction. Most short sales take longer than 90 days from contract to close and have seen them go as long as 1 year. The buyer also needs to realize that a short sale is not always a good deal. The short sale process is for the benefit of the seller. A house goes into a short sale when the seller owes more on the mortgage or mortgages than the seller can sell the house for on the fair market, so the lenders are willing to take less than what is owed on the note or notes. To be a good short sale agent you have to be patient, organized and a great communicator. The process is difficult and requires communications between many different parties, selling agent, lenders, negotiators, etc.” – Jeff Biney

“I did my first short sale in 2002 before they even had a name, and now I teach continuing ed to Realtors in Florida about short sales while still actively working the transactions myself.

Short sales pose an extra layer of risk to the buyer they sometimes wait months and months and at the end the contract is turned down by the bank. Usually this is caused by one of 3 things: a mis-priced property, an inexperienced listing agent, or an unqualified seller.

A great short sale agent must be organized, patient, diplomatic when dealing with the lenders, use honey to attract flies rather than vinegar, yet be willing to become a pit-bull when and if the need arises!

Homes become a short sale when the amount is owed on the property plus all of the expenses of the sale exceed what the property is worth. General rule of thumb: What the home is worth in TODAY’S market less 10% in costs. If that exceeds the amount you owe on the home (including all back payments, attorney’s fees, taxes, etc.) then you are looking at either bringing the difference to closing in the form of cash or it must be a short sale.

Short sales are 98% based on true hardship of the seller and that is a critical part of the short sale approval’s chances.” -Andy Tolbert

“What advice would you give to a buyer considering
purchasing a short sale? Expect delays and lots of up’s and downs. A short sale is never uncomplicated. Expect lots of communication between the realtor and the buyer and seller, the title company and also the lender especially if situations involving FHA loans. This is not a situation where the buyer can plan with any certainty because there is always a twist or a turn involving a short sale transaction. It is a roller coaster always until the finish line. Number one tip is to be sure your realtor the buyers agent and the sellers agent are on the same page and in good communication because communication is key. Agents need to stay in constant communication with the bank and with their clients both the seller and the buyer.

What does it take to make a great short sale agent? Excellent communication and writing skills. They must be able to communicate well in writing and by phone and be aggressive in order to ensure the short sale is closed.

HOW DO HOUSES END UP BEING A SHORT SALE? Homes end up being short sales for a variety of reasons the top two are 1) because homeowners end up not being able to negotiate withthe banks to lower their interest rates or monthly mortgage payments tto fit their particular budgets or 2) they find that their homes are upside down and their only choice is to sell and hope that the bank will approve a short sale so that they can walk away from their home without having a foreclosure on their record.” -JACOB J. GABRIE

“Short sales are an excellent alternative for ‘educated’ buyers. The key word is ‘educated’. Qualified buyers are able to negotiate fair deals at safe terms. Ultimately freeing the market of extra inventory. I have a system in place that allows the home owner some control and the buyer to feel as though it’s worth waiting out the process so it’s a win-win situation for all involved” – Lisa Sevajian

“What advice would you give to a buyer considering purchasing a short sale? Buyers should keep in mind that short sale properties are often in better condition than foreclosures and are priced to sell quickly. Buyers also need to remember that not just any offer will do – a short sale is a fire sale, but home sellers may counter; and their agents can only bring reasonable offers to the bank, which typically means a little less than market value.

What does it take to make a great short sale agent? Designation and Determination – not just anyone can help navigate a short sale – before listing your home consult with a Certified Distressed Property Expert (CDPE) designated agent who can help you make good decisions early in the selling process. CDPE training walks agents through every step of the process, including all the documents needed by banks.

How do houses end up being a short sale? The dramatic increase in the number of short sales is due to the current economic crisis, including rising unemployment and drops in home prices across the nation. A short sale can be the best option for homeowners who are “upside down” on mortgages (when you owe more on your home than it is worth) because it may not hurt their credit history as much as a foreclosure.” – Rosanne Gain

“The best answer to all of your queries is PATIENCE,PATIENCE,PATIENCE. In order to purchase a short-saleproperty a buyer has to exercise caution and patience. The biggest concern for most buyers should be “can I deal with the unknown?” In many cases home inspections are allowed but only after a contract has been accepted. The biggest thing for a buyer is to find an agent who has closed sort sales before. Many realtors claim to have the knowledge but unless you know for sure, you can’t be too careful. Having an agent who knows the process can not only speed it up in some cases, but they can also get the best price for you without all the haggling. Thank You” – Don Billings

“Buyers who are considering purchasing a short sale should be prepared to wait for the bank to review the package and understand that there are no guarantees that the terms agreed upon with the Seller will be accepted by the bank as well. This wait can be 3 to over 6 months depending how many mortgages are there on the Property.

When purchasing a short sale, Buyers should make sure that theirs is the only contract executed by the Seller and sent for the bank’s review. In cases where multiple offers are sent, Buyers can waste months before learning that somebody else’s offer has been accepted.

House ends up being a short sale when total outstanding mortgages on the Property exceed the current market value. Therefore, Seller is not able to generate enough proceeds from the sale to cover mortgage balances and he usually has some type of financial hardship that prevents him of covering the difference himself. In this case, bank is asked to forgive the difference by allowing short payoff, hence the short sale.

The Real Estate agent processing short sales must be knowledgeable about the process inside out. Initially, they should price the Property correctly based on the latest comparables, not based on the outstanding mortgage amounts. Once the offer is received and the package is submitted to the bank, constant follow up and persistence on the part of the realtor are on the top of the list. This close supervision of the proceedings is needed to successfully complete the transaction, while keeping all the parties up to speed with the latest developments.” - THE DS TEAM

“What advice would you give to a buyer considering purchasing a short sale?
I would tell them to make sure that their agent (selling / buyer agent) verifies the Listing Agents (sellers agent) level of short sale negotiating experience. The worse thing for the buyer is to make offers on short sales where the listing agent has no experience getting them approved.

What does it take to make a great short sale agent?
A GREAT SHORT SALE AGENT IS ONE THAT SEE ALL ROAD BLOCKS DURING A SHORT SALE NEGOTIATION AS JUST A MINOR HITCH THAT NEEDS TO BE NEGOTIATED. HENCE, THEY NEVER QUIT, THEY FIND THE MIDDLE GROUND AND MAKE SURE THAT THEIR CLIENT (SELLER) GETS A DEAL THAT IS IN THEIR BEST INTEREST. A GREAT SHORT SALE AGENT DOES CONSTANT FOLLOW UP WITH ALL PARTIES INVOLVED IN THE SHORT SALE FROM THE LOSS MITIGATOR, TO THE BUYER AND AGENT, TO THE SELLER AND EVEN TO THE TITLE COMPANY. NO STONE IS LEFT UNTURNED AND NO ONE IS LEFT UNINFORMED

How do houses end up being a short sale?
Home end up in short sales for two main reasons

* THE HOME HAS LOST SIGNIFICANT VALUE
* THE SELLER IS IN FINANCIAL HARDSHIP AND CAN NO LONGER MAKE PAYMENTS (THAT SAID THERE IS A NEW TYPE OF SHORT SALE CALLED STRATEGIC SHORT SALES WHEREIN THE HOME HAS STILL LOST VALUE BUT THE SELLER IS MAKING THE FINANCIAL DECISION TO SELL THE PROPERTY EVEN THOUGH THEY CAN AFFORD TO KEEP IT – THEY DO NOT WANT TO HOLD ONTO A HOME THAT HAS NEGATIVE EQUITY)” – Owen McGab Enaohwo

“I would advise a potential buyer of a short sale to investigate the loans the seller took out on the property. The loans can tell a lot about whether a property even has a chance at being sold short. Whether the loans are FHA or Conventional, or if there are multiple loans and liens can tell you a lot and make a huge difference.

Being great at selling a short sale (like a lot of things) is all about practice. If selling short sale homes is going to be a part of your business plan as a Realtor, it’s important that you do enough of them to have clear answers and responses to typical obstacles. I’m meeting six different distressed seller’s this week and no two of them have the same situation. Like any specialty if it’s not your regular book of business, I highly recommend referring it to someone else.

A short sale can happen anywhere from new build areas to established neighborhoods. It takes three things to happen.
One, you bought a home with a loan. Two, your home’s value decreases below the amount of the loan. Three, you decide to sell.  Any sale would evolve your lender because he won’t be receiving the full loan amount in repayment. ” - NOAH SLAUSON