A Look At The Short Sale As A Work In Progress

Two weeks ago, I posted the first entry to this subject of representing the buyer in a short sale transaction. We prepared the short sale package and submitted it on March 23rd; and provided a missing document the next day.

On March 25th, we verified that the bank received the missing document – and also learned that the file had been assigned to a Loss Mitigator. At that time, they would only provide us with the Loss Mitigator’s name, email acheter cialis france address and fax number – no phone number. That’s okay – I don’t like trying to call these guys, anyways.

On March 30th, the bank informed us that the loan’s investor would not agree to pay any HOA transfer fees or Third-party Negotiator fees – but there was no notation as to who the investor is. To keep things simple, we started to work on revising the package to reflect the investor’s position on these issues.

In war and short sales – you have to pick your battles carefully, and you must keep in mind that the other side wants to feel like they gained some ground, too.

We also inquired as to whether our request for a Broker’s Price Opinion had been ordered – and we were told that a BPO was performed last December 22nd, but they were uncertain whether a new BPO had been ordered. Keep in mind that we’re still dealing with the lower level at the bank – and NOT the Loss Mitigator.

At this point, we also noticed that the property had been scheduled for foreclosure auction on April 6th.

On March 31st, the Loss Mitigator emailed us back indicating that our offer was in line with their value on file – and informing us that there were three additional bank-specific documents that they needed to be completed. The funny thing is that these new documents simply reformat information that we already provided. He also reinterated the fees that the investor would not pay.

So we sharpened our pencils and revised our numbers for the Preliminary HUD-1 and Short Sale vs REO Asset Retention Comparison Analysis – as well as updated our package with the additional requested documents. We rewrote our Proposal Letter; updated the Index and Cover; and created a new pdf file to transmit to the Loss Mitigator.

Our updated package was uploaded to a private area on our website, and a link sent to the Loss Mitigator on April 1st. In our package, we reminded the Loss Mitigator of the impending date of the foreclosure, as this would severely curtail our prospects for success.

The Loss Mitigator acknowledged receipt the next day and promised to get a review completed ASAP.

At this point, we don’t want to be a nuisance to the lender. They have been very good with their handling of our file – and the last thing we want to do is create a situation where our file gets pushed to the back burner – especially since the property is scheduled for auction in a few days.

So our next task is to ensure the auction has been put on hold – so we call the attorney handling the foreclosure  the morning of the auction to inquire as to the status of the property. Fortunately, the bank has instructed the attorney to put the foreclosure on hold.

The next day, the Loss Mitigator informed us that our short pay settlement had been approved – and simply needed to know if we could close by the end of the month as stated in our contract.

With the banks approval in hand, we created a package to transmit to the attorney so that he could get started with his title work. We also let the buyers know that it was time to get a home inspection so they could truly ascertain what they were buying.

I must confess that the speed by which the lender and investor have responded is both welcome and heartening. Last year, I witnessed several instances where the sellers could no longer wait for their short sales to be approved – and filed for bankruptcy protection. Needless to say – this tends to kill short sales.

Yesterday, I participated in a webinar hosted by Bank Of America where they were explaining their new system for getting short sales processed in a timely manner – and I must admit, I am encouraged by this development. BofA has not been a  trusted friend to the short-seller in the past – and their stated commitment to "People, Process and Technology" should improve the speed by which the short sales can be accomplished.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here. 


4 Responses to “Representing The Buyer In An Atlanta Short Sale Part 2”

This is a great overview of the short sale process. It should be a great help to your clients. How is the market in general? To what extent do you think the end of the tax credit will effect the recent uptick in the market. Down here in Orlando, March sales were up 5% over February and 40% over March 2009. Prices have ticked up 12% from January. Two thirds of the transactions were short sales and forclosures. The hidden positive I believe is the sudden influx of forgien buyers. I think investors may feel that we are now coming off the true bottom.

Why did your short sale go so quick? Do you know some one at the bank? What are the figures? I want to be ready for next time.

>Bill: It’s difficult to truly quantify our market, as we have two major listing services whose numbers would have to be reconciled to get a tight number.

In one service, March numbers showed 3558 sales at an average sales price of $184,152 with an average LP/SP ratio of 93.85% for detached single family homes. February numbers showed 2812 sales at an average of $181,241 with an average LP/SP ratio of 93.89%. The increase in activity is more likely to be a seasonal adjustment, rather than an indicator of the market, itself, as March tends to be a stronger month than February for us… just as April is likely to be a stronger month than March.

>Charlotte: In part because it was a good offer – and because we presented a comprehensive package for their consideration. Our package made it possible for the investors and their mitigators to quickly review and approve.

I’ll publish more about this transaction after it closes, Charlotte.