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Sellers Have To Help Us Help Them In A Short Sale
Articles and blogs nationwide report that only 15% to 25% of short sale transactions close. However, I close dozens of short sales a year with a success rate of about 80%. We are striving to increase our success rate to above 90%.
Guess what the primary reason for short sale failure is in our office;
Lender inefficiency? No
High BPO’s? No
Buyers backing out? No
The number one reason? The sellers themselves!
We can persevere with the lender. We can appeal the high BPO. We can find new buyers if the current one backs out. But when the seller loses focus it’s hard to get them back on track.
The vast majority of sellers that we are helping are extremely responsible, organized and focused on the task at hand. They are great team players and are appreciative of the monumental hoops we have to jump through with the lenders. However, some sellers lack the commitment. Their reasons vary from divorce issues, bankruptcy attorneys convincing them to give up and file bankruptcy, or just plain being too stressed out to think clearly.
We can only help those who are willing and able to let us help them. If the sellers delay the delivery of financials or cause other delays it will delay the submission of the short sale package and delay the negotiations and may cause the seller to lose the house to foreclosure.
Non cooperation on the part of sellers is reflected by:
1. Seller delays delivery to our office critical documents required by the lender.
2. Seller delays or ceases to respond to our communications.
3. Seller delays response to offers or counteroffers.
4. Seller filing bankruptcy or telling us that they will file bankruptcy. We have helped many sellers during and after bankruptcy. I’m referencing sellers who file BK and claim that they don’t need a short sale anymore, which is usually not the case but they are convinced otherwise.
5. Seller changing their mind, telling us they don’t want to deal with it, and that they’ll let it go to foreclosure.
6. Seller’s internal disputes, specifically in cases of divorce or separation.
7. If the seller is indecisive, and their bankruptcy lawyer, divorce lawyer, CPA, or other professionals or non-professionals or family members are telling them not to do the short sale, we cannot help them. Please keep in mind that we can only help those who are willing and able to let us help them.
Foreclosing lenders routinely reject or ignore short sale packages that are not complete. If the seller does not deliver their required financial documents to us, we cannot help the seller.
Too often I hang in there with the sellers even though the writing is on the wall. The more time I spend with uncooperative sellers the less time I have to dedicate to those sellers who are committed to the process. Lately I find myself writing polite and professional termination letters to sellers who just can’t stay on task.
I hope you will learn from my experience. Please post your comments if you have found solutions to this problem or if you have had similar experiences. Let’s all learn from each other.
Dave Halpern
Louisville Short Sale Expert
www.LouisvilleShortSaleExpert.com
https://davehalpernlouisvilleshortsaleexpert.wordpress.com/
http://www.louisvilleshortsale.com/
http://www.facebook.com/DaveHalpern
Many Realtors in the Louisville Kentucky area recognize us as the short sale leaders and bring us in on their short sales. We get it done!
Copyright 2009 Dave Halpern LouisvilleShortSaleExpert.com
The Last 24 Hours of a Short Sale
OK fellow short sale trench mates, here’s a topic that buyers and their agents rarely understand; the last 24 hours of a short sale.
Short sale listing agents know that most short sale lenders require an advance copy of the HUD statement 24 hours prior to the closing. That’s when the havoc starts. The banks want to rename fees, nitpick prorations and move line items from one section to another. The short sale negotiation could have taken eight months and the bank could have $300,000 ready to be wired to them, but often, in the last few hours everyone has to scramble to chase down a loss mitigation manager to get reapproval of the HUD because the bank won’t pay a $50 “wiring fee” unless it gets renamed to “payoff delivery fee”, or the HOA has to be on the second page and not on the first page. How about “our investor (the actual owner of the loan) doesn’t pay “doc prep fees” but they will pay “document management fees”. Remember, this is weeks after they issued a short sale acceptance letter based on a preliminary HUD.
All parties could be sitting idle at the closing table while the short sale lender a thousand miles away plays trivia with the HUD statement.
The seller is stressed out because they think the short sale was suddenly denied and their house is going to foreclosure. Fortunately the seller trusts you because they know how diligently you worked to save them and how inefficient the banks are.
But the buyer is freaking out because the moving van is packed and they promised their kids that the Christmas tree will be up that night in the new house. They want to close and move now! Not tomorrow, not tonight, not in an hour. NOW! And, by the way, how dare the closing get delayed when they dedicated their entire lunch break to squeeze in this closing. Tears and temper tantrums soon follow. Not by the kids, by the adults.
The buyer’s agent and their loan officer are up in arms because the closing is “blowing up”!
And ooohh, the listing agent who worked dozens of extra non-compensated hours over many months to navigate the short sale so the buyer can pick up free and instant equity is now the villain. To the buyers, the buyer’s agent and the loan officer it just seems like the listing agent twiddled thumbs and waited for the last minute. “And how dare he not notify us in advance that the short sale wasn’t approved!” goes the rant.
And then, like magic, although we knew it would come, the email or fax arrives that all is reapproved and we’re clear to close. The buyer’s tears and anger hormones go back into their respective glands. They sheepishly sign the deed and their new mortgage, and drive to their killer deal, instant equity, new home, mumbling what a horrible experience it was.
They should all walk in our shoes for just one day.
Dave Halpern
Louisville Short Sale Expert
www.LouisvilleShortSaleExpert.com
http://www.LouisvilleShortSale.com/
http://activerain.com/davehalpern
Many Realtors in the Louisville Kentucky area recognize us as the short sale leaders and bring us in on their short sales. We get it done!
Copyright 2009 Dave Halpern LouisvilleShortSaleExpert.com
Short Sales in Louisville
Hello World!
Welcome to my first blog post about short sales. My commitment to you is to provide quality content that you can use. This blog is intended for sellers, buyers, Realtors who represent sellers, Realtors who represent buyers, loan officers, BPO agents and appraisers, bank loss mitigators, closing attorneys and anyone who is directly or indirectly involved in a short sale.
Most of the writings will be original writings reflecting my vast experience in helping homeowners avoid foreclosure by negotiating a short sale with their lender. I successfully close dozens of short sales every year in Louisville KY and at any given time I am multitasking dozens of ongoing short sales.
I am accredited by the Kentucky Real Estate Commission (KREC) to teach Short Sales to Kentucky Realtors for Continuing Ed Credit, and have taught classes to hundreds of Realtors.
Although I always want to keep a positive and upbeat demeanor, I would like to emphasize that short sales are a very imperfect process with many pitfalls and no guarantees.
What is a short sale? When the lender accepts an amount short of the full payoff.
Who wins in a short sale?
The homeowner sells their house even though they owe more than it’s worth and gets out from under their mortgage.
The foreclosing lender reduces their losses. Rather than incur a long and costly foreclosure process and the risk of getting an abandoned and damaged house, they settle now and get a big check. They lose less now rather than lose more, later.
Listing Realtors sell a house now and help their client rather than helplessly watch their client’s house and dreams slide all the way to the foreclosure auction.
Buyer’s Realtors help their buyer get a good deal.
Taxpayers pay less in bailout money, because the banks have less losses.
Neighbors get a new neighbor faster instead of enduring a vacant foreclosure house for months or years.
Loan officers, closing attorneys, home inspectors and all the entities involved in the purchase and sale of a house get a little economic stimulus now instead of waiting for the banks to foreclose on the house and dump it in a year.
One of the hardest tasks in a short sale is managing the expectations of sellers, buyers and Realtors. Future blog posts will describe in detail what the problems are and how to handle them effectively.
Readers are encouraged to leave comments requesting topics to be addressed.
See you next time!
Dave Halpern (502) 664-7827
Louisville Short Sale Expert
Dave Halpern Louisville Short Sale Expert (502) 664-7827 