Sicklerville, NJ

One thing that I did not mention during the reviewing the offers portion of the series is the issue of inspections. When I am representing a seller of a short sale, I typically advise them to allow inspections, but for them to be for information purposes only for the buyer. I do not want my seller to be obligated to make any repairs whether they are at the buyers request or the lenders. This is because most of the time, my clients are already having a financial hardship, and it doesn't make sense for them to have to come up with cash to sell their home.

It is very important to make sure that all of this is discussed up front with the buyers, this will prevent most problems that may arise. Of course there is always the possibility that something serious will be uncovered, and the sale will not go through.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

Once you have a contract in place with your buyer, it's time to start the negotiation process with your lender. For all my clients, I suggest that they retain a local attorney who specializes in this type of negotiation. It is important to choose someone who has experience dealing with lenders and also has a system in place to make regular calls on your file. At least one call every 3-5 days is what I recommend, but some will even call more often than that. I know that there are some agents out there who will do the negotiations themselves, but I don't believe that this is in the seller's best interest, especially because it typically doesn't cost them anything to have the attorney work for them. Their fee is taken out of the settlement, which and if successfully negotiated just reduces the proceeds to the lender.

Having the right people on your team will ensure that the short sale negotiation goes as smoothly as possible. However, you should still expect the process to take 3+ months to close. During that time you should be recieving updates from both your attorney and your real estate professional on a regular basis. Often though, these updates are that we are all still just waiting on the bank. Patience is key.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

Once your property is on the market and priced correctly, you should start recieving offers. It is important to evaluate each offer and not just accept the first one that you receive. In my experience short sales attract a lot of novice investors so some of these offers might be a little off the wall. You may see lease-option offers, subject-to offers, offers with large seller concessions, or just plain low balls. Most of the time these offers will not do you much good. What you are looking for is a cash offer or one with financing already in place. Without this the difficult task of negotiating with the bank becomes almost impossible.

If you are not familiar with these types of offers and the benefits and drawbacks of each, you should discuss them both with your real estate professional and with your legal counsel. The danger of accepting just any offer is that your lender will not accept it or that after several months of negotiating, the buyer isn't able to perform. Once you have found a buyer who has made an acceptable offer you are ready to start the negotiation process with your lender. I'll discuss this in an upcoming post.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

As you're looking for a buyer for your short sale, you must implement an effective marketing plan. One of the most important aspects of any marketing strategy is proper pricing. This is especially true when selling a short sale because you need to get the property sold quickly. Many sellers make the mistake of pricing their short sales too low. This attracts a buyer quickly, but often the bank will not accept the short sale if they believe that this price is too far below the market. Based on my experience most lenders will take no less than 85% of today's fair market value, based on their appraisal.

What I have found works well is to list the property at a price similar to the most recent comparables, but then adjust that price every two weeks that we don't recieve an offer. By doing this, we quickly get to a price that will attract many offers and this achieves both a quick sale and a price that is easy to justify to the lender. With the right pricing strategy and effective marketing, attracting a buyer for your short sale should be quick and easy.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com

Once you've determined that you owe more than your home is worth and that your lender is likely to accept a short sale given your specific situation, it's time to find a buyer. Now I would always suggest using a local real estate professional to market your home, but this is especially true when selling a short sale. There are a few reasons for this:

1. If you are having trouble with your mortgage payment, then you probably need to sell your home as quickly as possible. A local specialist should be better able to achieve this result.

2. If the short sale is negotiated successfully with your lender, the bank pays the commission and the seller has no out of pocket expenses. You get the benefit of professional representation at no cost.

3. If marketed correctly, you will get several offers. A knowledgable professional will be able to tell the real offers from the time wasters.

One of the most important aspects of finding the right buyer for your short sale in today's market is pricing. I'll save that discussion for a later post.

Joseph Cacciapaglia, MLERE
Realtor Associate®
R&I Realty
15 Potter Street
Haddonfield, NJ 08033
Office: 856.795.3111 x268
Cell: 979.218.2286
Jcacci1@gmail.com