Do short sales ever go smoothly?

Asked by Susan Stoler, Akron, OH Thu Mar 22, 2012

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9
Ann Ryan, Agent, Doral, FL
Fri Mar 23, 2012
If you want a "smooth" transaction, opt for a regular sale. With foreclosures and short sales, you're choosing price over control of the process.
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Fri Mar 30, 2012
in my opinon..........not often enough
0 votes
Toni Gamboa, Agent, Moreno Valley, CA
Fri Mar 30, 2012
Sometimes they can. Depends on the bank and the negotiator. They are getting better. But key is to find an agent who is motivated and calls the bank everyday. And an agent who contacts you everyday or other day to give you the communication of the bank. Most banks want a Loan Modification first. I hope it works for you, good luck!! I'd love to help you, but my expertise is in California.
0 votes
Jim Sweat, Agent, Venice, FL
Fri Mar 30, 2012
Hi Susan,

Yes, a short sale can go smoothly. A bank owned sale can be a breeze, and an "actual seller" could be a nightmare.

But those are the exceptions!

I just posted a blog of an actual Q & A with a client regarding a short sale property he had offered on before it went short.

http://www.trulia.com/blog/jimsweat/2012/03/actual_short_sal…

It touches on some of the areas of complexity in a short sale. It doesn't go too in depth, but gives you an idea of who controls what in the process, and that lack of control is a big part of what makes a short sale frustrating.

All the Best,

Jim Sweat, ABR, CRS, GRI, CDPE, e-PRO, ILHM
Realtor
Sandals Realty
http://www.ExplainShortSales.com
941-306-7384
Team@JimSweat.com
0 votes
Genevieve Ra…, Agent, Punta Gorda, FL
Fri Mar 23, 2012
Once in a rare while they do. With just one lien with any of the major banks, they are starting to move faster. However, for a smooth sale you need a dedicated and knowledgeable Real Estate professional.
Good Luck!
0 votes
Scott Hulen, , 64068
Fri Mar 23, 2012
I think the success rate depends a lot on the area of the country in which you live. Florida and Nevada have high success rates because Realtors® and asset managers get a lot of practice in doing this type of transaction. Realtors® in these areas don’t even bother to list properties which will not qualify for the program, while Realtors® in my area list “possible short sale situation 50% under value” this type of deal is dead before it even hits the MLS. Other items which effect the transaction are the number of people on the note, the number of notes against the property, the willingness of the sellers to carry a note back for the deficiency. A short sale can work for a cash investor who can wait it out but for a homeowner in my market I will not even show short sale properties. In my market the chance of success is less than 10%. If you are looking in Florida your odds are better than 50%. Before you hire a Realtor® for this type of transaction ask how many they have successfully completed and pick one who has done at least 5. Ps certifications for Realtors® such as CDPE “certified distressed property expert” means the Realtor® paid a fee and went to a seminar for a day or two, they DO NOT MEAN THEY ARE AN EXPERT. Good Luck!
0 votes
Elva Wormley, Mortgage Broker Or Lender, San Jose, CA
Thu Mar 22, 2012
Hi Susan,

Believe it or not, sometimes they do! :-) And as a loan officer, I have closed loans on a few short sales that closed within 45 days and others that have been waiting more than 6 months for the bank to approve the short sale offer! There are a lot of factors that come into play with short sales. I suggest you stay in close contact with your realtor.

Best wishes,

Elva Wormley
C2 Financial Corporation
(408) 615-8500
0 votes
JoAnna Selby, Agent, Sherman Oaks, CA
Thu Mar 22, 2012
Short sales are more likely to go smoothly if you know the right steps to take in purchasing a short sale.

These are some steps to avoid short sale pitfalls:

Step 1: Be prepared to purchase and move into your short sale property anywhere from around 3 mo to a year.

- Some buyers are not prepared for the wait when purchase a short sale. Once you put in your offer, everything has to be approved by both buyer, seller and the bank. The banks are faster these days as there are so many short sales, but it's best to be prepared for the worst. The average time to close on a short sale is 90-120 days.

Step 2: If you need to purchase and move in within around 8 mo, then I would recommend to put in an offer on a short sale that already has an approved sale price from the bank.

- When you put an offer in at a lower price than the bank would accept, they are more likely to negate the offer. It's best to find out what the bank would accept and put an offer at the that price. Otherwise you might be waiting sometime up to a month just to hear that your offer was rejected from the bank.

Step 3: Check with your agent and make sure there are no other offers on the property. If there are other offers ask your agent, whether the bank will accept backup offers.

- Some banks only look at one offer at a time. Even though, your offer might be more than the other offer, some banks will not review your offer until the other offer has been denied.

Step 4: Ask your realtor for any prior inspections on the property.

- The banks are legally responsible to send you any and all inspections that they have on the property.

Step 4: Be sure to talk to your realtor to find out where he/she would suggest putting in an offer. They usually have a good idea, what offer would be accepted or declined.

- Some buyers want a price way below market value and end up missing out on the property.

Step 5: Review with your realtor the checklist that the bank is requiring to put in an offer on the short sale.

- The last thing a buyer wants when purchasing a short sale is that their realtor has failed to follow all the instructions from the bank when your realtor puts in the offer. After talking to many banks, I have realized this is a key mistake that realtors make when drawing up contracts for short sales. Some offers in this case might be rejected prior to the offer ever getting to the bank.

Step 6: Sometimes banks will not pay for inspections or any repairs on the property.

- When writing up the contract be sure that you and your realtor discuss not paying for inspections. After your inspections are completed and you know the repairs necessary, then during your contingency period for inspections you may accept or reject the property. If you are not pleased with the inspections and they are an exorbitant amount sometimes the realtor can negotiate to fix the unforeseen circumstances.

On one of my transactions, there were $37,000 dollars in termite damage. The bank was not willing to help cover any costs. This was an exorbitant cost for my buyer, so we chose to decline the property during the inspection period because the banks were not willing to assist with costs.

If you have any more questions in regards to the short sale process, feel free to call me toll free at 855-600-BLVD (2583).

JoAnna Selby
Prudential California Realty ~
818.783.3049 Fax
JoAnna@VenturaBlvdRealty.com
http://www.VenturaBlvdRealty.com
DRE#01894146

"Oh, by the way, I am never too busy for any of your referrals."
0 votes
Alain Picard, Agent, Puyallup, WA
Thu Mar 22, 2012
They can and new regulations just went into effect so we will see. Supposedly if the lien holder is one of the five big banks then they have 30 days to respond to a short sale now. This will also depend on how many lien holders there are. If there is only one you usually will have a better chance. The five banks are Bank of America, Wells Fargo, GMAC, City, and Chase.
0 votes
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