Short Sales made easier!

I handled my first short sale early in 2008 when tackling them was first starting to be a needed skill for Realtors. My listing hadn't started as a short sale, but as the market dropped rapidly in San Diego County, it became evident quickly that the sellers would have to sell the home for less than they owed on the property. There were 2 lenders. I was diligent and tenacious in my approach, and we did get the short sale approved and closed. My sellers were able to avoid foreclosure and move on with their lives. I will never forget the tears of joy my client had when I walked into her work and told her we finally had verbal approval from both lenders and it looked like we were moving forward. It had been a long process, and I think we were all exhausted emotionally and mentally by the time we finished. My clients were surprised when my husband told them how much sleep I'd lost worrying over the transaction. My clients are more than just numbers to me, they are people with life events and challenges who sometimes need to explore other options.

This year I took the CDPE course offered by Alex Charfen. At the RE/MAX International Convention in March, RE/MAX founder, Dave Liniger had touted the Certified Distressed Property Expert Courses...."The CDPE designation is one of the most important and timely educational products I have seen in over 40 years in the real estate business," said Liniger. "I will do whatever it takes... to get as many agents as possible through this course so they can help homeowners, the economy and our country." I've always had a tremendous amount of respect for Dave and his insight into the industry.

I bit the bullet, paid the price, and signed up for the course and then fully engaged in the instruction. By the end of the class, I felt it reaffirmed some of the knowledge I had, and yet also added new insights. I now had some more effective approaches to add to my arsenal of weapons to expedite and streamline short sale transactions.

On July 3, I submitted a complete 111 page package to Wells Fargo for approval. By July 6th, they had ordered a broker price opinion, and by July 8, the agent was onsite to conduct the BPO. Yes, I almost fell out of my chair when I received the call that the agent would be onsite to do the BPO! Within 5 days of submitting a package? That's unheard of!

I have every confidence that the skills I learned from the CDPE class will put my short sale packages at the top of the heap and expedite the approval for my clients. I've heard that Wells Fargo has promised a 45 day turnaround on all short sales. Hopefully, with agents becoming more skilled at giving lenders exactly the information they want to process a short sale, and with lenders getting up to speed on the process themselves, we can all make this current market work.

The class also gave me many options to offer clients when they are having trouble making their payments. Foreclosure doesn't have to be the only option. Sometimes an owner can work out a loan modification -- although the odds seem stacked against that from what I've heard in the trenches. Sometimes a deed-in-lieu of foreclosure works. Generally, a deed-in-lieu works best when there is only one loan on the property.

For some, with a demonstrated hardship, a short sale is the solution.

In all cases, an owner must look at the tax and legal implications. In some cases, a foreclosure will be the option that is the best fit given the entire picture. However, no owner should assume that a foreclosure is the only option until they have thoroughly looked at the risks and benefits of each pathway.

For Realtors, short sales are a process that requires, skill, tenacity, some patience, strong negotiation and organizational skills, and a knack for working with an asset manager on the phone in a far away location. Without question, it always requires a positive outlook and solution-seeking approach when dealing with lenders.

For owners, it also requires patience and the willingness to expose your entire financial postion to your agent and lenders. The paperwork required is signficant.

For buyers and their agents, it requires patience too. I tell my own buyers, We want to work with a listing agent that will submit only the highest and best negoitated offer to the lender and who will submit a complete package the first time." I don't want my buyers exposed to a never ending prolonged bidding process with an unknown lender entity that may take 4 to 6 months to collect and review offers.

At one time, we didn't encourage our buyers to view or offer on short sales. But now, as more agents are becoming experienced and good at successfully closing short sales, we interview the short sale listing agent before we recommend whether a buyer move forward with an offer. If the agent appears savvy and solution focused, we're there. If not, we encourage our buyer to keep looking!