Five Agent Tips to Insure Short Sale Approval

There is an innate importance in knowing the five agent tips to insure short sale approval.  Essentially, based on 2011 statistics, about a third of the properties in the United States belong to distressed homeowners. There is no doubt that these homeowners are affected by the economic crisis that is happening around the world which has led to their current financial challenges. Majority of the distressed transactions belong to short sales because of the attempt of homeowners to avoid foreclosure. This means that they would need the help of short sale Realtors who have a strong background in closing these types of transactions.  Here lies the importance of knowing these five agent tips to insure short sale approval, especially if you are a novice real estate agent. Short sale specialist should consider the following.

1. Collect all documentations and ask specific questions from the homeowner.

The reality is that majority of real estate agents are not fond of dealing with paperwork. However, it is important for short sale agents to note that the approval of short sale transactions depends on the completeness of the documentation. There is a reason why this is part of the five agent tips to insure short sale approval.  With short sale transactions, the lender will look for specific paperwork to support the request.  Absence of any of the supporting documents can lead to the delay or rejection of the request. Real estate agents must also realize that homeowners do not automatically qualify for short sales. In terms of ensuring the approval of the short sale transaction, this is one of the more important components to establish to determine seller qualification.

2. Invest your time wisely.

There is no doubt that one of the main reasons why short sale transactions fall through is the lack of a legitimate buyer. This is something that competent short sale specialists learn to realize, which allows them to invest their time wisely by spending it with a legitimate buyer. There is nothing more frustrating, especially for novice real estate agents, than to spend enormous amounts of time with a potential buyer only to see the transaction fall apart.

To ensure that agents invest their time wisely, it is important to also identify if there are other loans imposed on the property being sold.  The reason is that, the more lien holders there are the more complex the nature of the short sale transaction becomes. In the same context, the approval or agreement of the primary lien holder must also be secured in relation to the payoff amounts to be given to subsequent lien holders. Failing to consider this will result in the failure of the short sale transaction and a waste of time for both the seller and the real estate agent.

3. Complete short sale packets.

As earlier established, documentation is one of the most important aspects of the short sale process. Because of this, one of the five agent tips to insure short sale approval should include the submission of complete short sale packets. Real estate agents will agree that there are instances wherein some lenders will require only some of the paperwork to be submitted. 

Despite this being the mistake of lenders, both the real estate agent and the seller carries the burden. Regardless of what the lender says, submitting only complete short sale packages is one sure way to ensure that problems in processing the request because of lack of documentation is avoided. The importance of this is highlighted by the fact that lenders receive hundreds of different short sale packages on a daily basis. Submitting incomplete documents can relegate your request to the bottom of the pile and prolong the waiting period for the approval.

4. Be at the lender’s appraisal.

Experienced real estate agents know that lenders do not calculate based on the potential loss in relation to the total amount owed by the borrower on the mortgage as against the price offer for the short sale property.  The reality is that the determination is made by the lender based on the loss the investor may incur from the short sale transaction.

The amount arrived at by the appraisal represents the value that is expected to recoup when the property is sold.  This highlights the fact that as one of the five agent tips to insure short sale approval, coming up with an offer that is close to the figure determined by the appraisal will result in a higher percentage of approval for the transaction.  In this instance the lender will view the short sale transaction as a better alternative to foreclosure.

5. Deal directly with the lender.

This represents one of the more critical tips of the five agent tips to insure short sale approval. Essentially, once the homeowner accepts the purchase price and readily signs on it, all dealings from that point on should be done directly with the lender. This will ensure that approval of the short sale transaction is done properly and promptly by the lender and limits the amount of time that will be taken up.

By dealing directly with the lender, the chances for the buyer to walk away from the transaction become minimal. This will also pave the way for the establishment of a constant communication channel between the real estate agent and the buyer.  The real estate agent will also be able to give the buyer an accurate estimate on the amount of time it would actually take for the short sale transaction to be approved by the lender.

short sale Realtors with a strong background in closing short sales would agree that regular verification calls with the lender is also an important step in securing approval.  These five agent tips to insure short sale approval will also lessen the frustration of novice short sale Realtors.

Allie Zehring

WWW.Short-Sale-Specialist.com

Copyright First Coast Realty Associates 2012

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