Key Points to Short Sales

Collier Swecker, top producer with the Mega Agent Team at RE/MAX Advantage, shared the ins and outs of Short Sales, as well as, the new federal HAFA and HAMP guidelines with our agents. It was extremely informative. Here are a few of the key points discussed concerning short sales:

1) Learn the 10 ways your clients can avoid foreclosure and educate them as a professional. Placing the house on the market may not always be the RIGHT answer. Before suggesting short sale to to your client in order to avoid foreclosure, make sure you know how to direct the transaction toward success.

2) Be proactive. If your client decides short sale is the best method, get your mortgage authorization signed immediately and get it to the loss mitigation department of the lender. Have your client request the short sale package. Help your client fill out this paperwork. The package is so thick and can be extremely overwhelming because it requires bank statements, tax returns, and lots of tedious personal information. Remind your client that the lender could pay them $thousands$ of dollars for filling out this paperwork if the property is approved.

3) If your client has lots of cash in the bank or many assets, it doesn't mean the bank will not consider a short sale. The bank will look at depreciation, but the hardship situation will be the most analyzed to determine approval.

4) Remember to tell all parties to be patient because it could be 60 days before approval is granted. To expedite the process, ensure the paper work is complete.

5) The bank will order a BPO to ensure the offer is reasonable so inform buyers that extremely low ball offers may not be possible. Suggest the buyer provide TWO approval letters so the loss mitigation specialist will take the buyer seriously.

6) The short sale may not even affect the seller's credit rating. It can cause a zero to fifty point effect.

To learn more about short sales, consider earning your CDPE; Certified Distressed Property Expert designation. Bank of America will soon be assigning short sales to RE/MAX agents with CDPE designations. Short sales will be increasingly more prevalent due to the cost of foreclosure being 40% to 50% of the value of the house.

Collier also discussed the new federal HAFA and HAMP guidelines which I will share with you later in the week. If you have a property that you know is over priced and the sellers have told you they cannot drop the price, discuss the short sale process with them and get it into action.