If you’ve been a real estate agent for any period of time or even if you are relatively new to real estate, you should definitely know that no two situations are the same and no two real estate transactions are the same. When questions arise, often they are of a new variety or difficult to answer. Nevertheless, we’ve prepared a list of the five most common questions short sale sellers ask their agents, with suggestions on how to answer them.
Question: How long does a short sale take to negotiate?
Answer: There is no hard and fast rule for how long it will take to negotiate a short sale. It depends upon the number of liens that need to be negotiated, the efficiency of the staff at the lending institutions, and the rate at which the sellers and the agents produce requested documents. The best course of action is to provide all of the requested documents together upfront so that there is the least possible amount of downtime waiting and/or back and forth (requesting and waiting for documents to be delivered and uploaded) during the short sale process.
Question: Why do I need to sign an authorization for someone to call the bank on my behalf?
Answer: Banks have very strict policies when it comes to protecting personal information about loans. If you want someone to assist you in negotiating the short sale of your property, it is best to send in a written authorization to the bank. Don’t forget to include your social security number, loan number, the name of the individual who is granted permission, and your signature (the one you used when you signed loan documents to obtain your mortgage).
Question: What if the bank doesn’t accept the buyer’s offer?
Answer: Most lenders do not flat out deny an offer. If it is not within the range of what they are looking for, they generally provide you with a verbal counteroffer or guidelines as to a range that they will accept. If that range is unreasonable, the burden of proof falls on the listing agent, the short sale negotiator, and the buyer’s agent to work together to provide the lender with proof that the offer submitted should be accepted. This proof could include repair bids, appraisals, comparative market data, and photos among other things.
Question: What happens if one of the lien holders will not agree to a short sale?
Answer: If your home has a lot of liens, sometimes it is tough to get all the lienholders to agree to participate in the short sale. This is often the case if a lienholder believes that they will be able to get paid in full from some other source–such as mortgage insurance or legal recourse against the owner. It is very important to investigate all liens on the property and explore these issues before getting started on the short sale process.
Question: Which is better? Short sale or foreclosure?
Answer: The answer will depend upon a lot of factors including the state where you live, your financial situation, your interest in using your credit again in the near future, etc. However, if you are looking to know the exact date when you need to be out of your home and not looking for the sheriff or some new owner to come evict you and change the locks, a short sale is a way to plan and prepare an advance exit strategy.
Even though things seem good right now, the market may change and you or someone you know may need to participate in a short sale. If so, please feel free to call the short sale team at Short Sale Expeditor®.