Is Your Short Sale Listing Meant to Be?
Remember high school? Remember Prince Hamlet? Remember the famous soliloquy he delivers about the fact that his situation is so wretched that he may be better off elsewhere? While high school was a long time ago for many of us, you may remember Prince Hamlet and you may be playing that soliloquy over many times if you take “the wrong” short sale listing.
You see, while it is wonderful to use this challenging and unique real estate market in order to become a master listing agent and take more listings than ever before, there is a certain kind of short sale listing that is just not meant to be.
In my opinion (and this blog post expresses only MY opinion), there are three types of short sale listings that are just not an effective use of an agent’s time, and are not even worth the value of the printed paper contract.
The first type of short sale listing that is just not meant to be includes an uncooperative seller. Any seller who is not willing to provide the listing agent with all of the required documentation to submit to the bank as part of the short sale package would be considered uncooperative. A seller needs to be fully invested in the process and must understand that many lending institutions will not even consider a short sale without a complete package of seller documentation.
Uncooperative seller = listing not meant to be. Why list a short sale that the bank is not even going to consider?
The second type of short sale listing that is just not meant to be is one that has an auction date that is too close for comfort. When a seller calls you to list a property on Monday and casually mentions that the auction date is scheduled for Friday of the very same week, you will probably not have enough time to do your job. In order to postpone an auction, most banks require a complete short sale package (including a purchase contract) and this would be hard to put together in just a few days. Additionally, certain mortgage lenders will not even entertain a short sale so close to the auction date.
Auction date too close for comfort = listing not meant to be. Why set yourself up for failure and set your seller up for further disappointment?
The third type of short sale listing that is just not meant to be is the one with too many liens against the property and/or the seller. I cannot underscore enough how important it is to run a preliminary title report and have the title company run the seller’s names in order to ascertain the types of outstanding liens against the property and/or the seller. If the only liens that come up are the mortgage liens and property tax liens, than all is well. However, if there are other liens such as child support liens, abstracts of judgment, and IRS tax liens, than this is going to be a tough short sale to close—unless the seller is willing to clear all of the non-institutional liens prior to closing.
Too many non-institutional liens = listing not meant to be. Why waste three months negotiating a short sale only to learn at the eleventh hour that is it not going to close—due to the non-institutional liens?
Working short sales has many benefits. Not only is it a great niche in this real estate market but it is also a great way to help sellers and obtain referrals for life. But, no matter what, you need to do your homework!
Do not take short sale listings that are not meant to be, otherwise you may feel like Prince Hamlet and wonder whether it is all worth it.