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Short sales, a product that changes in the blink of an eye- cheat sheet

The other day one of my Realtor® friends called me and asked me to tell her everything she needed to know about the government’s HAFA short sale program in 60 seconds or less. Wow! Was that ever a challenge? Actually, trying to keep any information-sharing conversation on real estate and distressed properties to 60 seconds or less is practically impossible.

That being said, when I completed the conversation, I was reminded of a blog post I wrote right here on Agent Genius a few months ago entitled It’s Important to Know All Things Real Estate if That’s What You Sell. Anyone working in the distressed property market needs to be thoroughly knowledgeable in that real estate niche.

Short Sale Cheat Sheet

So, if you endeavor to take short sale listings, in addition to being able to successfully conduct short sale negotiations and keep a pretty little short sale file, you ought to familiarize yourself with all of the following:

  1. HAFA. HAFA is the government’s Home Affordable Foreclosure Alternatives Program. Read Supplemental Directive 09-09. Learn how the major lending institutions with participating investors are processing their HAFA short sales.
  2. Foreclosure Process. Know your state’s foreclosure process and time frames better then you know the back of your hand. If you are taking a short sale listing, you need to educate the borrower on the foreclosure process and explain to the borrower how close (or far) he or she may be from the foreclosure sale.
  3. Local and Federal Laws Affecting the Distressed Property Market. Do you live in a state with judicial or non-judicial foreclosure? Does your state have any anti-deficiency bills on the table? What about any foreclosure moratoria? Have you read the bills? Do you know if they have or will be signed into law?
  4. Tax Consequences. While Realtors® should never, ever provide advice which comes from out of their area of expertise (such as tax or legal advice), are you familiar with the Mortgage Debt Relief Act of 2007? Do you understand how it impacts short sale sellers?
  5. Major Players. Have you worked with the major lending institutions and successfully processed short sales before? Do you know how to use Equator? Do you know that Chase Bank has its own short sale application package? Do you know that Wachovia has a fast track short sale program and in certain cities you can get your approvals in less than two weeks (sometimes as quickly as three days)?

When you offer your services as a short sale listing agent or if you’ve selected short sales as your niche, you really want to be sure that you have familiarity with your product. This is a complicated product because the rules and policies are changing all the time. It’s not like new models of automobiles that are released once a year. New policies and procedures change weekly, and it is important to read everything you can so that you are able to provide the best possible service to your clients.

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Written By

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.



  1. Sheila Rasak

    August 30, 2010 at 11:54 am

    In short, short sales are never easy and almost always complicated. Agents who decide to take them on need to be above average and well prepared.

    I’m often left scratching my head when an agent takes on a short sale with little or no experience or education on the matter.

    The consumer should be aware of many things when deciding on loan modifications vs. short sale vs. foreclosure…first and foremost the homeowner has rights as long as they maintain an ownership interest. That being said, I’ve witnessed countless homeowner’s who attempt loan modifications only to be denied with a rapid foreclosure on their home. I feel it’s wise to be in the driver’s seat and attempt the loan modification while initiating a short sale; one or the other can be dropped at any time during the process. Another important factor when avoiding foreclosure is carefully selecting a Realtor with experience along with an office located in close proximity to the property to initiate the short sale.

    In my opinion, the best way for a distressed homeowner to find an area Realtor who can navigate these murky waters would be to Google keywords like “avoiding foreclosure” along with the city that their property is located in.

  2. Fred Griffin

    August 30, 2010 at 1:05 pm

    Nice succinct post, Melissa.

    Sheila commented: “I’m often left scratching my head when an agent takes on a short sale with little or no experience or education on the matter.” Roger that! I refer out Short Sales to other Brokers or Agents who Specialize in that area.

    I do suggest to Short Salers (or is it Short Sellers?) that they consult with an Attorney or CPA regarding possible tax consequences or deficiency judgments after the fact.

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