It has probably happened to you before. In fact, it’s pretty common. The short sale negotiation process goes on too long, the short sale contract wasn’t airtight, and the short sale buyer disappears. S/he has hit the road.
There are many things that a short sale listing agent can do in order to promote a solid short sale transaction—one where the buyer may not take a hike. One such thing (and it is very, very easy) is to be a good communicator. On all of my short sales, for example, I send out a weekly status email. An email such as this one can go to the buyer’s agent, to the seller, and to any other designated party to the transaction. This simple 5-minute activity demonstrates that the short sale is still progressing—albeit often a little bit slowly.
Another thing that can be done in order to ensure that your short sale does not implode right in front of you is to write an airtight counter offer. Consider all of the items in the contract that may not be approved by the short sale lender. Create a counter offer that addresses those items. (Termite, septic, HOA fees, and home warranty are just of few fee items that are often not approved by the short sale lender
A third way to help ensure that the buyer does not walk away in the midst of the short sale negotiations is to open escrow or put the buyer’s deposit into trust. Depending upon where you live, this may not be an option. However, in the state of California, agents using the Short Sale Addendum (SSA) can opt to open escrow upon acceptance of the contract by the seller (not the bank). Unless a short sale buyer has unlimited funds, this action may help to avoid a cancellation at a later date.
So, the next time you are negotiating a short sale contract, try these three methods. Little kids really enjoy watching buildings implode on television, but I’m pretty certain you do not want to watch your short sale go in that very same direction.
Photo: flickr creative commons by Seattle Municipal Archives