What you see is not always what you get
Have you heard? According to the Wall Street Journal there is a company that creates decorative decals to disguise boarded-up homes in areas that have significant blight.
These decals make the homes look spruced up and presentable instead of the vacant, abandoned looking properties that they actually are. The decals seem like those huge wraps that you often see on trucks on the freeway—the ones that advertise energy drinks. It’s an ingenious idea, really. It’s repackaging something to give the neighbors what they want to see. Basically, that’s what we do when we work with short sale lenders on short sales: we provide them with what they want to see.
The short sale package
In most short sales, the agent representing the seller is required to provide a package of items to the lender in order for the lender to review and (hopefully) approve the sale of the home for less than the full amount of the mortgage. In addition to the listing agreement and purchase contract, for most lenders this package includes bank statements for all borrowers, tax returns for all borrowers, and pay stubs for all borrowers. Additionally, the list may also include a financial statement (a list of monthly expenses), a hardship letter (or letter of explanation), and an estimated settlement statement (which shows the expenses associated with the sale and what the bank will net at closing).
Each lender wants this information provided to them in a very specific way: some what it uploaded as individual items to an online portal, others want it emailed, a third group wants it via fax. Providing the short sale lender with exactly what they want to see when they want to see it may sound easy, but it’s not. Lenders are fussy and will not review your items unless they have exactly what they want.
Working through the process
In the midst of the short sale negotiations, it is not uncommon to have to work with the short sale lender and provide them with they want to see. Because each lender has specific guidelines for what they will approve in short sale, often short sale agents will need to go back a few times in order to rework or repackage the information in a way that meets the bank’s guidelines. This may mean moving things around on the settlement statement, renegotiating terms with the buyer, or even just providing documents in a different manner.
The key to success in working with the lenders is to be flexible and open-minded. A close-minded person did not come up with the idea of decals on boarded-up homes. It was a person that saw a problem and thought of a clever idea for how to solve it. Real estate agents, you need to do the same—except, in this case, with short sales.
