While there are no guarantees a property will sell in a short sale, there are steps you can take to increase your odds.
I recommend the seller do the following:
1. Find an attorney very experienced in doing short sales. From my experienced the best and most experienced short sales attorneys take no monies the seller. They will get paid at closing as part of the closing. The attorney does not get paid unless you close. My favorite firm is Gardi & Haught, LTD. http://www.gardilaw.com/.
2. Find a realtor with experience in working with short sales. The realtor must know the pulse of the market your property is in order to determine at what beginning price to list your property and if you are getting no activity on your property your realtor must have pre-research what was the actual closing price of similar properties that were closed in short sale and/or foreclosure. The bank is going to want to see that there was a real solid attempt to market and sell the property at the current fair market value. Just know that often the properties in short sales can sometimes sell for less than 30% of market value that is why it is so important your realtor has completed the research on closed short sales for your market. For example you have a 10 block radius and the average listing price of a two bedroom / 1 bathroom condo is $200,000. However, when you dig deeper into the stats you find out the average closed price on short sale for the area is $150,000. This is why it is important to have a very sharp realtor working with you.
3. Home seller I know this is a very difficult time and can be very embarrassing. Do not fret many people have had/ will have to do a short sale to put them selves in a better financial situation.
4. Make sure you keep your home clean and clutter free during showings to increase the chances of obtaining a buyer sooner.
5. If you are financially capable of paying your mortgage and your mortgage is simply upside down you will not qualify for a short sale. Speak with an attorney.
Finally, even after all the above has gone smoothly, once the buyer has put in an offer and the seller accepted it; now comes the time for the mortgage holder (lending institution) to determine if the selling price in contract is a price they are willing to accept. The bank will order an independent BPO (Brokers Price Opinion) on what the broker feels the property is worth based on the housing economic market factors of where your property is located. If your buyers has offered less monies than what the BPO comes back as the buyer has the option of accepting the banks price or walking away from the deal.
A short sale can be a very emotional and lengthy process. Surround yourself with professionals who are not just looking at a commission but the end result of getting you out from under the financial burden you are in.
1. Make sure that you qualify as a hardship.
2. Ensure that your initial list price reflects market value. Have the comps to support the list price and the accepted offer price.
3. Keep in mind that the goal is to sell the property not just to get an offer. Don't be tempted by a lowball offer. It will just be a problem in the future.
4. Stay in touch with your seller and the buyer's agent. The buyer's agent is key in making sure that the buyer hangs in there.
5. Make sure that both buyer and seller are prepared for the process. If the buyer has indicated 30 day close date in the contract, they may not be educated about the process or they may not be willing to wait. Test that by making sure they agree to more appropriate time frame.
Short sales do close. Sometimes the reasons for failure are beyond the control of the listing agent and attorney. Oftentimes though, failure can be avoided by optimizing the situation. Short sales are usually better than going into foreclosure if possible.
Millie C Lumpkin, CDPE, SFR
Keller Williams Preferred Realty
Orland Park IL
Phone: (312) 217-5644
The best attorney:
Attorney at Law
Cervantes & Cioffi LLP
111 W. Washington, Ste 1201
Chicago, IL 60602
Or, the seller may decide to try (and get) a loan modification.