Making the Short Sale work-I am in this mess as I type...Twice!

Yes, I am in this mess as I type...two deals!
I am the buyers agent on one deal, and the listing agent on the other deal

I have done many of these types of transactions. (Sad isn't it!) I have found the key to making it work is:

1. If it is your listing, provide the lenders with EVERYTHING they want all at one time. Don't drip information to them, it tends to get lost or the person you started out talking to has been layed-off or transfered to another department. And no one called to tell you! (Of course they didn't call you...you are just a stack of paper on the desk) Each lender has a list of everything they want. Get it all to them. The tricky part is the HUD, as the real numbers for pay-off are not available. Stewart Title is who I work with, they just use numbers from the title report and stamped ESTIMATED all over the HUD statement...so they aren't held liable for tax, utility, or other liens that may pop up!

2. Make sure the buyers REALLY wants the property, and understand the lengthy process we are entering into. You don't want them leaving the table, after you have spent weeks getting their offer through the hoops with both lenders. When you fax over the offer, send a letter that states this is the buyers best and final, if it is, and a summary report of homes that have sold in the neighborhood.

Note:Lenders like to see 90% of the appraised value, if it looks like they can get it. Don't think you can really low ball them! They have investors they have to report these losses to.

Another Note: Check with your broker or MLS regarding listing the home as ACT-STI while you are waiting for the bank to sign off. Has mutual acceptance really occurred? The inspection and financing contingencies clocks should not start running until you have mutual acceptance from the bank.

3. Establish an email contact for obvious reasons.

4. Negotiate with the 1st lien holder at the very beginning. The 2nd position wants a letter from the 1st, and if it doesn't show any give from the 1st, the 2nd always asks YOU to negotiate. Often the 1st won't move on their pay-off, but you will have documentation in hand for the 2nd....to keep the ball rolling. No chance for you to move back to the bottom of the pile while they are waiting on paper from you.

5. Keep in contact with buyers/agent. I recently had an offer on a short sale with Countrywide. It took them 1 month to come back with a verbal no, and verbal counter-price. (We did try to low-ball, per my clients request...they have nothing but time so they aren't pressured to move) we are now 2 weeks into it with my clients best and final...still no word...and three CW representatives later....