Connect with us


Keep Communicating and that Short Sale Actually May Close



At the beginning of the year, I wrote about the top 11 ways to get a short sale approved in 2011. I then spent the next several weeks elaborating on each of the pointers that I mentioned in my Letterman-style top 11. Agents frequently comment that many of my tips are common sense. That’s true. I never claimed to invent the wheel; I’m just here to help you drive the car.

One of the pointers that I haven’t really discussed much is the importance of communication. Again, this ain’t rocket science, but effective communication is a vital part of the short sale process.

In traditional real estate transactions, the buyer begins to move forward with inspections and the appraisal almost immediately after the seller and buyer agree to the terms of the transaction. Most traditional transactions close quickly—generally in 30-45 days. Not so with a short sale. And, because the period between signed contract and short sale approval can be very long, all parties may get a little bit antsy.

During the lengthy waiting period, buyers often wonder, What’s going on? When is the transaction going to be approved? Is anyone even communicating with the bank?

Sellers frequently think about those very same things. Also, sellers who are still occupying the property are often unsure of when they should begin packing up and making plans to move to their next destination. With the time frame of the short sale a bit of a gamble, it can be a stressful and confusing time for both buyers and sellers (and agents, too).

All it takes is one quick email

I’ve seen the most success with short sale closings when the individual doing the short sale negotiating provides weekly updates to all the parties involved in the transaction. For example, telling the buyer and seller that the BPO has been completed or that the negotiator called and requested some updated documentation is a welcome relief because all parties see that progress is being made. It may be slow progress, but it is progress to say the least.

When there is good communication in a short sale transaction, the buyer generally sticks around and, as a result, there is a successful closing. Again, this ain’t rocket science. If it only takes a few minutes a week to send out a quick email to all parties, you’ve gotta wonder why many agents do not take the time to do this—especially if it helps to cement a successful closing.

What say you?

Photo: flickr creative commons by colindunn

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

Continue Reading


  1. Heather Walton via Facebook

    March 15, 2011 at 7:53 am

    Effective Communication is the KEY to the success of any transaction!

  2. Melissa, I think this is key! I’ve been able to keep a very high closing ratio on my short sales, and I believe it’s due to the communication with the buyer’s agent. Buyers go through several cycles of emotions in a short sale: Buyer’s remorse, anxiousness for an approval, angry threats of walking from the contract, and finally just giving in to waiting because they’ve waited this long already. Along the way, continued communication keeps them involved and eventually they get the bank approval for closing. Communication is the key.

  3. Dean Ouellette

    March 15, 2011 at 11:50 am

    Melissa as always you are spot on. You dont need to be a rocket scientist (like my business partner) to get short sales closed. It is all about the basics, staying on top of your files, keeping in touch with the banks and realizing they are not saying “no” they are saying “know” as in they dont know enough to make an informed decision so keep educating.

    Of course even then agents wont close 100%, but it will get the number much close to 80-90% instead of the industry average of 40%.

  4. Jill Kipnis

    March 15, 2011 at 1:12 pm

    Melissa, this is a valuable post for buyers going through a short sale. The key is also patience; remember that “slow and steady wins the race.”

    Here’s another interesting article that buyers might find helpful:

    –Jill Kipnis, Community Builder

    • Lani Rosales

      March 15, 2011 at 3:51 pm

      Hi Jill, thank you for stopping by. Melissa is writing an ongoing series for real estate professionals about short sales and not addressing buyers directly (as AGbeat is an industry outlet), but you’re SO right that slow and steady wins the race.

      -Lani Rosales, Editor-in-chief @AgentGenius

Leave a Reply

Your email address will not be published. Required fields are marked *


Disputing a property’s value in a short sale: turn a no into a go

During a short sale, there may be various obstacles, with misaligned property values ranking near the top, but it doesn’t have to be a dealbreaker!



magic eight ball

magic eight ball

It’s about getting your way

Were you on the debate team in high school? Were you really effective at convincing your parent or guardian to let you do things that you shouldn’t have been doing? How are your objection-handling skills? Can you flip a no into a go?

When working on short sales, there is one aspect of the process that may require those excellent negotiation or debate skills: disputing the property value. In a short sale, the short sale lender sends an appraiser or broker to the property and this individual conducts a Broker Price Opinion or an appraisal, using special forms provided by the short sale lender.

After this individual completes the Broker Price Opinion or the appraisal, he or she will return it to the short sale lender. Shortly thereafter, the short sale lender will be ready to talk about the purchase price. Will the lender accept the offer on the table or is the lender looking for more? If the lender is seeking an offer for a lot more than the one on the table, mentally prepare for the fact that you will need to conduct a value dispute.

Value Dispute Process

While each of the different short sale lenders (including Fannie Mae) has their own policies and procedures for value dispute, all these procedures have some things in common. Follow the steps below in order to conduct an effective value dispute.

  1. Inquire about forms. Ask your short sale lender if there are specific forms that you need to complete in order to conduct a value dispute. Obtain those forms if necessary.
  2. Gather information. Your goal is to convince the lender to accept the buyer’s offer, so you need to demonstrate that your offer is in line with the value of the property. Collect data that proves this point, such as reports from the MLS, Trulia, Zillow, or your local title company.
  3. Take photos. If there are parts of the property that are substandard and possibly were not revealed to the lender by the individual conducting the BPO, take photos of those items. Perhaps the kitchen has no flooring, or there is a 40-year old roof. Take photos to demonstrate these defects.
  4. Obtain bids. For any defects on the property, obtain a minimum of two bids from licensed contractors. For example, obtain two bids from roofers or structural engineers if necessary
  5. Write a report. Think back to high school English class if necessary. Write a short essay that references your information, photos, and bids, and explains how these items support your buyer’s value. This is not something that you whip up in five minutes. Spend time preparing a compelling appeal.

It is entirely possible that some lenders will not be particularly open-minded when it comes to valuation dispute. However, more times than not, an effective value dispute leads to short sale approval.

Continue Reading


Short sale standoffs: how to avoid getting hit

The short sale process can feel a lot like a wild west standoff, but there are ways to come out victorious, so let’s talk about those methods:



short sales standoff

short sales standoff

What is a short sale standoff?

If you are a short sale listing agent, a short sale processor, or a short sale negotiator then you probably already know about the short sale standoff. That’s when you are processing a short sale with more than one lien holder and neither will agree to the terms offered by the other. Or… better yet, each one will not move any further in the short sale process until they see the short sale approval letter from the other lien holder.

Scenario #1 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they will proceed with the short sale, and they will offer Bank 2 a certain amount to release their lien. You call Bank 2 and tell them the good news. Unfortunately, the folks at Bank 2 want more money. If Bank 1 and Bank 2 do not agree, then you are in a standoff.

Scenario #2 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they cannot generate your approval letter until you present them with the approval letter from Bank 2. Bank 2 employees tell you the exact same thing. Clearly, in this situation, you are in a standoff.

How to Avoid the Standoff

If you are in the middle of a standoff, then you are likely very frustrated. You’ve gotten pretty far in the short sale process and you are likely receiving lots of pressure from all of the parties to the transaction. And, the lenders are not helping much by creating the standoff.

Here are some ideas for how to get out of the situation:

  • Go back to the first lien holder and ask them if they are willing to give the second lien holder more money.
  • Go to the second lien holder and tell them that the first lien holder has insisted on a maximum amount and see if they will budge.
  • If no one will budge, find out why. Is this a Fannie Mae or Freddie Mac loan? If so, they have a maximum that they allow the second. And, if you alert the second of that information, they may become more compliant.
  • Worst case: someone will have to pay the difference. Depending on the laws in your state, it could be the buyer, the seller, or the agents (yuck). No matter what, make sure that this contribution is disclosed to all parties and appears on the short sale settlement statement at closing.
  • In Scenario #2, someone’s got to give in. Try explaining to both sides where you are and see if one will agree to generate their approval letter. If not, follow the tips provided in this Agent Genius article and take your complaint to the streets.

One thing about short sales is that the problems that arise can be difficult to resolve merely because of the number of parties involved—and all from remote locations. Imagine how much easier this would be if all parties sat at the same table and broke bread? If we all sat at the same table, then we wouldn’t need armor in order to avoid the flying bullets from the short sale standoff.

Continue Reading


Short sale approval letters don’t arrive in the blink of an eye

Short sale approval letters may look like they’ve been obtained simply by experts, but it takes time and doesn’t just happen with luck.



short sales

short sale approval

Short sale approval: getting prepared, making it happen

People always ask me how it is that I obtain short sale approval letters with such ease. The truth is, that while I have more short sale processing and negotiating experience than most agents and brokers, I don’t just blink my eyes like Jeannie and make those short sale approval letters appear. I often sweat it, just like everyone else.

Despite the fact that I do not have magical powers, I do have something else on my side—education. One of the most important things than can lead to short sale success for any and all agents is education.

Experience dictates that agents that learn about the short sale process
have increased short sale closings.

Short sale education opportunities abound

There are many ways to become educated about the short sale process and make getting short sale approval letters look easy to obtain. These include:

  • Classes at your local board of Realtors®
  • Free short sale webinars and workshops
  • The short sale or foreclosure specialist designations

As the distressed property arena grows and changes, it is important to always stay abreast of policy changes that may impact how you do your job and how you process any short sale that lands on your plate.

The most important thing to do is to read, read, read. Follow short sale specialists and those who blog about short sales on AGBeat, Google+, facebook, and twitter. Set up a Google Alert for the term ‘short sale’ and you will receive Google’s top short sale picks daily in your email inbox. Visit mortgagor websites to read up on their specific policies and procedures.

Don’t take on too much

And, when you get a call from a prospective short sale seller, make sure that you don’t bit off more than you can chew. Agents in most of America right now are clamoring for listings since we are in the midst of a listing shortage. But, if you are going to take on a short sale, be sure that it is a deal that you can close. And, if you have your doubts, why not partner up with a local agent that can mentor your and assist you in getting the job done? After all, half a commission check is better than none!

Continue Reading

Our Great Partners

American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!