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Top four short sale deal killers, how to avoid them

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When listing and negotiating short sales, it is easy to become negative, but if you avoid these four short sale deal killers, your transactions will go more smoothly and you’ll feel more positively toward the practice.

How to Avoid Negativity

When I started working short sales, I was like an evangelist. I would preach to any agent that I met. I would beg agents not to be negative and to avoid complaining about the current state of the real estate market. Many of those agents reminded me of Eeyore—the pessimistic, gloomy, and depressed gray donkey that’s friends with Winnie the Pooh.

If you do not want to be depressed, gloomy, and pessimistic about the real estate market, then you will want to avoid these four short sale deal killers.

Here are four things to avoid when listing and negotiating short sales:

  1. Hesitant sellers. If you consult with a prospective short sale seller and s/he is still considering other options (such as loan modification, refinance, deed-in-lieu of foreclosure, or bankruptcy), then you should hold off on taking the listing. There may be nothing worse than working your bottom off to get the short sale approved only to learn that the seller wasn’t sure of his plans when s/he signed the listing agreement.
  2. Uncooperative sellers. An uncooperative seller is a seller that does not want to provide documents to the lender in a quick and efficient manner. The seller also may not want to make the property available for showing. In order for you to do your job and get the short sale closed, it is vital that the listing agent and the seller be a united force.
  3. Excessive liens. Any liens attached to the property that are not held by institutional lien holders (mortgage lenders) will need to be removed prior to closing, and the short sale lender is not going to help with that. When taking the listing, look into whether there are additional liens on the property. Assure that you and the seller have a plan for how those will be removed prior to closing.
  4. Lowball offers. Unless the property is in extremely poor condition and no one could obtain a mortgage for the purchase of the subject property, short sale lenders generally are looking for an offer at or near the current market value. Submitting a lowball offer to the short sale lender will result in significant time delays and often times even a declined short sale transaction.

If you can stay away from these four short sale deal killers, than your life as a short sale listing agent and short sale negotiator will be more like the life of Winnie-the-Pooh than that of Eeyore.

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