I just received first and second approval in writing on two short sales this week - and what I can tell you is that the short sale/foreclosure market and knowledge base changes daily. The "rules of thumb" about what a bank will, or will not do changes often and rapidly. The general process of submitting a short sale package has remained fairly constant for the past year, however, as banks have been forced to refine their best practices and deal with unbelievable workloads, the intricate details have shifted - and continue to shift.
The reality for short sale negotiators is that you must be persistent and dogged in your determination and unwillingness to take no for an answer. If you try to negotiate a sale for the first time, what you will find is a never ending maze of phone extentions, disconnected phone numbers, departments that no longer exist and conflicting information "in the file notes" depending on whom you finally speak with. It feels to a negotiator as if there is a deliberate conspiracy and smoke screen to prevent your success.
The screen can be broken - the file can be pushed through the maze, but only if your negotiator is willing to spend countless hours, is talented in getting through roadblocks and unwilling to give up or just take the first answer. Nice doesn't cut it. Trusting what you are told and playing the waiting game will only accomplish getting your file moved to the bottom of the pile. A negotiator must be polite, appropriate, but firm and persistent. My professional negotiator was told on 4 different occasions during the process on the latest deal that nowhere in the file did they have authorization to speak with us (despite the fact we'd been working with them actively for 2 months.) Then magically, the authorization appeared again... It's mind numbingly frustrating - but can be done.
The process will take you at least 3 months, and up to 6 with a good negotiator. There are strategies for getting better results. Normal logic - i.e. submitting the very highest possible offer for approval isn't always your best approach. Many times the bank comes back with a net demand for the first, and an additional demand for the second. If you've pushed the buyer to their highest offer, you may have a dead deal, and you may or may not have time to start over with a new offer.
It's vital to stay on top of trustee sale dates. One department may be talking to you while the other is selling the property out from under you.
There are many things to know - interview a number of agents - ask very specific questions about how they would respond to various scenarios - if the bank says no? - how often do they check on the file? - how do they handle the bpo? what is their strategy for short sale success, specifically? Here's a thought - ask if you could possibly speak to the negotiator who will actually handle the process before you hire the agent.
If the agent can't or won't answer these kinds of questions for you in an intelligent and "not vague" manner, chances are, they are blowing smoke - move on. Not every short sale works even with the best team on earth - but your chances are infinitely better if you have the right team on the job.
Jeri Creson, Broker
TotalAccess Realty Advisors