Unhappy campers working short sales
Agents, home sellers, and homebuyers continually complain about their short sale transactions. It’s no surprise to me when I receive emails where any of the above discussing excessive delays, non-stop requests for additional items, and inadequate Broker Price Opinions.
Generally, the best course of action is to really study your own actions on the short sale until the point when you are losing hope, your hair is turning gray, and you are about to explode.
Some important considerations:
Was the short sale package submitted to the bank TOTALLY (sorry for the all caps) complete?
The reason that I emphasize the word ‘totally’ is because most short sale packages contain incomplete information or information that is not up-to-date. If you are about to go ballistic about your short sale, re-examine what you have done so far. Debone your short sale package and check to see if it was TOTALLY complete.
A complete short sale package includes all of the following items: last two months bank statements (all pages) for all accounts, last two years tax returns (all pages, all schedules, and borrowers’ signatures on the returns), last two months pay stubs, listing agreement (all signatures from all parties), a purchase agreement (fully-executed, all signatures from all parties), a hardship letter with sellers’ signatures, a financial statement, an estimated settlement statement (with every possible cost associated with the transaction), and an authorization to release information (giving permission for the short sale negotiator to speak to the bank on behalf of the seller).
Did you respond to bank requests in a timely manner?
Banks such as Bank of America, Wells Fargo, and GMAC use the Equator system (an Internet-based short sale processing platform) in order to process their short sales. Bank employees assign tasks to short sale agents (such as uploading documents, collecting documents, and responding to counter offers). If you miss the due date for the task, bid adieu to your short sale. You have to start again. So, if you are running to the local bar at sunset to knock a few done because your short sale is driving you crazy, check to be sure that you are actually responding to requests in a timely manner.
Are you hooked up with the right short sale incentive program?
There’s HAFA, and there’s TAP, and there’s a Bank of America Cooperative Short Sale Program among many others. But, don’t count on the bank to know all the ins-and-outs of your short sale seller’s situation.
The other day a seller contacted me because she was approved for HAFA, and the second lien holder was asking for a cash contribution. I immediately saw that something was amiss. In this situation, she would not be able to participate in the HAFA program because the HAFA program does not allow for cash contributions to the second lien holder.
Take a giant step back
So, step back and look at the seller’s situation and make sure that you fully understand all of the short sale programs. If you don’t know what’s what, be a (wo)man. Ask for help. Don’t worry. It’ll be far better to ask for assistance than to serve fillet of short sale for dinner tonight.
By the way, no meat, poultry or sea life was harmed in the writing of this post.