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Seller motivation is key to short sale success

Seller cooperation is key to the success of any short sale listing, so here are four ways to assess this, which is key to getting any short sale listing sold.

Short sale documentation

Recently, I listened to a local short sale agent who was ranting and raving because his short sale sellers were not giving him the documentation that he needed. Because he could not collect the required documentation in a timely manner, the short sale lender closed his file, and now he had to start all over again.

My ears perked up, just like the ears of a Labrador Retriever when he thinks he hears a rabbit or a bird. Collecting documentation is my specialty, and I can generally leave a short sale listing appointment knowing whether the short sale is going to be successful, primarily based on my assessment of the cooperation of the seller.

Is success in the cards?

A cooperative seller is one important key to short sale success. Here are four ways to assess whether your short sale is going to be successful—right from the get go:

  1. Assure that the short sale seller is willing to submit all the required documentation to the short sale lender. Many lenders will not move forward without all of the short sale documentation: paystubs, bank statements, tax returns. If a short sale seller is not willing to provide this information to the short sale lender, the short sale process will not be able to move forward (just like in the situation I mentioned above).
  2. Confirm that any third party liens can be released at closing. IRS liens, child support liens, HOA liens, and abstracts of judgment can reap havoc on your short sale. Look into all liens when you take the listing, and not when you are preparing to close.
  3. Is the seller interested in a loan modification? There are still a number of prospective short sale sellers that are deliberating a loan modification or underwater refinance. It is best to take a short sale listing only when the seller is certain that s/he will not be moving forward with a loan modification.
  4. Check foreclosure auction dates. It is extremely difficult to effectively process a short sale if there is already a foreclosure auction date scheduled. Research the title and learn about any foreclosure activity before taking the short sale listing.

We appear to be transitioning into a seller’s market in many parts of the United States, and listing calls are greatly appreciated. However,  no matter how awesome the home is, think twice before taking a short sale listing until after you have walked through these easy steps.

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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.

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