Southwest Florida Title Insurance & Real Estate Blog -

Short Sale

First of all, I love the HousingWire news feeds.  If you aren’t subscribed to a RSS feed or aren’t keeping tabs via Twitter, you should.  Check out www.housingwire.com.

This article was posted at HousingWire on Monday by Kerri Panchuk:  ”Survey Shows First-Time Homebuyers Growing Weary of Short Sales”.  In it, the author cites a recent survey that indicates a slide in the percentage of first-time homebuyers who have acquired short sales – from 54.1% in November 2009 to 39.7% in August.  We are all aware of the technical challenges of short sales; but the payoff in dealing with and overcoming those challenges is, according to the report cited, that “short sales . . . generally sell at prices 27% lower than non-distressed properties . . . .”  I got to thinking that if this is true  – that a buyer could expect a 27% discount by buying a short sale – then it would be nuts to “grow weary” of them.  Nuts, unless of course these first-time homebuyers are entering into short sale transactions with poorly set expectations.

Having orchestrated over 700 short sales over the last three years, we understand just how wrong things can go when expectations are not set properly.  So here are a few pointers mostly from a buyer’s agent’s perspective which should go a long way toward helping to manage your buyer’s expectations and toward helping them hang in there to take advantage of the short sale savings.

There is no substitute for good old-fashioned homework and reconnaissance when it comes to making an offer on a short sale.  To wit, you should know or try to find out:

  1. What is the status of the title to the property?  Are there multiple liens against the property?
  2. Which lenders, servicers and/or investors are behind the mortgages that need to be released?
  3. Are the sellers committed to the process (i.e., are they going to be able and willing to provide the required documentation in a timely fashion)?
  4. If there are associations involved, what is the outstanding balance and should the buyers anticipate having to contribute toward that amount?
  5. What is the experience level of the listing agent and/or the parties responsible for working with the lender on short sale approval?

Importantly, you can use the information you gather by asking these questions to set your buyers’ expectations realistically.  If there are lots of liens or multiple mortgages, it may take a bit longer than normal (whatever “normal” is).  If you know that a particular lender or servicer is notoriously slow, tell your buyers that so that they are not as anxious when nothing seems to be happening.  This type of preparation is absolutely key to maintaining your buyers’ commitment during the short sale process.  And, of course, if you suspect that the listing agent may not be experienced or may be dealing with particularly complicated title issues, please don’t hesitate to recommend our short sale orchestration services.  We would be happy to help them and you.

If we were able to close on your home and you became one of our short sale success stories and you’d like to share your thoughts, accolades, or constructive criticism with us, we’d like to hear your feedback. Would you mind posting a review on one of the following websites?

Of course, we’re hopeful that your input will help us to show others why they should work with us.  But we’re also eager to understand exactly how to define and improve the value we provide.

-Chris

Leave a Reply





NOT LEGAL ADVICE: This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure that this information is up-to-date as of the date of publication. It is not intended to be a full and exhaustive explanation of the law in any area. This information is not intended as legal advice and may not be used as legal advice. It should not be used to replace the advice of your own legal counsel.

Winged Foot Tite, LLC is not associated with the government, and our [short sale orchestration] service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.