by Stephanie Andre, Jeannine Prombo and Maggie Antillon
Distressed property made up over 35 percent of all sales in Cook County in the first quarter of 2010. Foreclosure filings are on the rise in the six-county Chicago region, which means more of your clients are going to need to sell short, and more of your buyers will be putting offers on short sales. By knowing how to successfully negotiate a short sale, or working with a group who has a proven track record for success, you will be able to stay ahead of the game and have a thriving business in this tough economic time. By following the 10 tips below, we guarantee that you will get approvals more quickly, keep all parties involved happy, see more of your short sales close and streamline your short sale business.
- Submit a complete short sale package to the lender. Make sure to include all documents that the specific lender will ask for so that they don’t have to come back and ask you for more and slow down the process. A complete package will help your file move through the system at a faster rate.
- Make sure your seller is the “wing man” throughout the short sale process. Maintain a great relationship with your sellers and be sure they are available to provide you with any documents you may need quickly. Do not be afraid to have your seller step in and call the bank to express hardship or plead for an auction date to be postponed.
- Time is of the essence and follow up is key. Get any documents or information that the lender requests back to them ASAP and follow up on the short sale every few days.
- Attend every BPO and be prepared. The BPO (Broker’s Price Opinion) is one of the most important pieces of the short sale, as it is a key factor in determining the offer the bank will accept. Attend every BPO, get there early and bring relevant comparables, a listing history, a list of repairs, a repair estimate and any other documents that will support your offer. Also, let the BPO agent know what the offer on the property is in case they are not aware.
- Know the ins and outs of your sellers’ situations. Know the following regarding your sellers’ properties and loans: If there is mortgage insurance, if this is their primary residence, who the end investor is on their first mortgage, how many loans are on the property, if there are any other liens on the property that they know of, is this the second mortgage and HELOC, if the property is a condo and if the sellers are current on their HOA dues.
- Pull title right away so there are no surprises. Pull title as soon as you get the listing for the short sale property, that way you know what you are dealing with and can assure the title is clean. If there are issues, you can deal with them while the short sale is being negotiated, rather than having a deal fall apart at the last minute.
- Know how to speak to your clients about deficiency judgments, promissory notes and 1099s. Remember, you are not a lawyer and should not give legal advice. You are also not an accountant, but you should definitely know all about deficiency judgments, promissory notes and the possibility of a 1099. Know about The Mortgage Forgiveness Debt Relief Act of 2007 and how to explain this to your clients. Becoming a resource for your clients on the potential consequences of a short sale will gain you trust and referrals.
- Patience is a virtue. Every lender is different and every file is unique. Do not make any promises to your sellers or buyers about how long the short sale will take. Keep buyers and sellers on board by encouraging patience from every party involved and continue to give status updates on the progress of the short sale.
- Make sure you have a savvy team closing your deal. Behind every great short sale negotiator is a great attorney and title agent. Make sure your closing team is experienced in closing short sales, as there are so many fires that need to be put out, especially after the approval has been received. With a savvy and experienced team, you will see more deals close and save yourself a lot of stress.
- Make sure your buyer is prepared. Communication with your buyer’s agent is crucial, and make sure he/she is in the loop throughout the short sale process. Double check that the buyer is moving forward with meeting conditions of his/her loan, especially if the loan is FHA, as these take more time than conventional loans.
Stephanie Andre, Maggie Antillon and Jeannine Prombo are the three partners that make up Avid Solutions, LLC. For more information on Avid Solutions, LLC, or for assistance on your Short Sales, visit avidsolutionsllc.com or call 773.446.7646.