Redding CA - Short Sales - Helping Sellers Who Face Hardship--I've been doing short sales for over two years now and have closed all my short sales to date. It is not easy work and it requires a set of skills that allow a global perspective.
The bank will approve a short sale when the numbers are compelling and provide them with the bottom line formula they use to approve a short sale. The bank would like to get 80% of market value. Usually, the 10% below market value brings our buyer and the remaining 10% is made up of closing costs and the commissions to the agents.
The one general statement that you can make about short sales is that there is NO general statement you can make. They are all extremely different and unique. I've been able to close one short sale in 21 days and I have also had a short sale that took 6 months.
Here are what I feel are the critical components to getting the short sale approval from the bank:
- I always try to get the highest number possible for both the seller and the bank. We actually start at market value and sometimes we even get market value offers that are accepted by the bank. It is very compelling when you can prove to the bank that they are getting a market value price on the property.
- I submit to the Bank a 3 year market report on our local market that includes the current and past levels of short sales and REOs in our market. It makes for a compelling story when you look at a 3 year history of your market.
- I send a complete package to the bank with a cover letter that summarized the hardship and nets out the bottom line number and how it related to market value. I will tell the bank that we are giving them a market value offer or a 5% below market value offer or a 10% below market value offer.
- I do a very accurate BPO. It must be spot on. The confidence that comes with doing the BPO is what will provide you with the means to negotiate with the bank if they do hesitate on acceptance or try to counter. They don't usually if you've done your work on the BPO correctly. It takes me a solid day to do a BPO.
- I include in my documents a pricing history off the MLS so that the bank can see what price we began with and our price change time frames. I combine that with a Lockbox report from Sentrilock and how many showings have occurred. Combined we have a good understanding of the why and how of price versus getting an acceptable offer.
- I always try to get an all cash or conventional loan for my short sale listings. I have managed to get a VA loan done on a newer Townhome and even a DAP FHA loan done. They are not easy, however and it adds many obstacles to getting it done. However, if you are not getting the type of offers you desire, you may not have a choice.
- Once we have an acceptable offer, the seller signs the offer and we OPEN escrow. We do not send the Buyer's check to escrow until we get written approval on the short sale. I always try to get a backup offer.
- I always remove the lockbox once we are Pending (continue to show SS) and have the key at my office. Agents can still show, however when we get our package received and acknowledged we want to be the contact person for the BPO
- I always put on the cover letter, ORDER THE BPO THIS IS A COMPLETE PACKAGE AND A WIN/WIN FOR THE BANK! It does seem to help. One of the hardest things for Loss Mitigators is the fact that they have 300 files on their desk. Anything they can move forward without having to ask for documents, gets moved forward.
- Once the BPO is ordered and the BPO agent contacts me, I meet them at the property to go over the property with them and hand them my card along with my BPO. It helps them to know how I arrived at the price and what conditions are relevant to the BPO. Usually, by this time we have some better comps that are even lower.
- The rest is just being tenacious and calling constantly. You are usually close to acceptance once the BPO has been ordered and things have matched up to your BPO. The bank usually submits for approval at this point.
- The last thing to remember is that you want to make sure that you you get a clean approval from the bank and that they will not seek recourse against the seller for the debt. In the state of California, we make sure that we have advised our sellers to seek legal and financial advice about what to do in this circumstance. We negotiate accordingly.
Redding CA - Short Sales - Helping Sellers Who Face Hardship--This is the process that I go through in successfully completing the short sale for my sellers. I hope that it is helpful.
I am Jeanean Gendron your Redding and Shasta County Specialist. You can reach me at 530 276-7417.
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Those sellers in Redding sure have a great short sale advocate in you....great job. This is a good picture of what we do, and why we are worth every penny we make!
Debbie Baldes, CDPE, e-PRO
It is hard work to get a short sale completed. You seem to have covered all the bases.
Debbie, thanks for the nice comments. We do work hard to help our Sellers in Hardship. It is rewarding however. Thanks for the visit and comment!
Terry, thanks for the Kudos and for coming by for a visit!