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How working with a seller in advance curbs short sale mistakes

Manage Seller Expectations

There are a handful of mistakes that short sale agents can make when working through the short sale process, and I have probably discussed the majority of those mistakes right here on AG Beat. I always say that I’m not talking rocket science when I talk about short sales. The reason that they are a challenge is because there is so much to manage: the buyer, the buyer’s agent, the buyer’s lender, the seller, the short sale package, the bank negotiations. A short sale often feels like a game of Jenga that’s just about ready to topple.

One of the mistakes that you can avoid early on in the short sale process has to do with pre-qualifying and managing the expectations of short sale seller. If you and your short sale seller have a long chat about all the ins and outs of the short sale process at the very beginning of the transaction, life will be oh so sweet when those metaphorical Jenga blocks begin to sway from side to side.

Here are some things to work out with the seller at the beginning of the short sale transaction:

Prepare the Seller

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    It’s a good idea to prepare the short sale seller for the wild ride ahead. Discuss worst-case scenarios, time frames, and what to expect during the short sale process.

Cash Contributions and Promissory Notes

    Some short sale sellers may believe that short sales are ‘free.’ And, many times, a short sale can be accomplished at no cost to the seller. But, there are those occasions when cash contributions and promissory notes may be required in order to settle a debt. Is your short sale seller willing to make a cash contribution if necessary?

The Dreaded HOA

    Homeowner’s association dues, transfer fees, document fees, and liens are often not paid for by the seller’s lien holder in a short sale transaction. Make sure that the seller understands the consequences of an HOA lien. In fact, if there is an HOA lien on the property and nobody is willing to make good on the bill, that short sale transaction may never make it to the closing table.


    Make sure that your short sale seller actually has a plan for relocation. There is possibly nothing worse than being ready to close your short sale transaction (the one you have been working on for months and months) only to learn that the seller doesn’t have a plan or a place to go.

Property Showings

    In order to obtain a short sale offer, buyers need to be able to see the property. If the seller is not able to accommodate showings, this may hamper the short sale process. Also, tenant-occupied properties can often be difficult short sales if the tenant is unwilling to allow showings. Get the showing details cleared with the seller when taking the listing.

Paperwork Preparation

    Short sales require paperwork—lots and lots of it. Even though a short sale seller has provided bank statements and pay stubs, it is not uncommon for the bank(s) to request updated information later in the process. And, some bank negotiators may only provide a 24-hour deadline for obtaining the requested items. Make sure that short sale sellers understand that additional documentation requests need to be handled quickly.

There are a number of things that can hamper a person’s ability to close a short sale. Like I said, it is almost like a really tough and challenging round of Jenga. That being said, managing seller expectations from the very beginning of the process will go a long way towards a successful short sale transaction.

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. SteveBeam

    February 16, 2012 at 11:23 am

    Make sure to call the HOA several days before closing to make sure they are current. Sometimes sellers forget or just stop paying them in the month before closing. Nobody likes to show up at closing to find a nice new HOA lien that needs to be paid.

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