subject: Pre-Qualify All Potential Listings - Short Sale Education [print this page] Pre-Qualify All Potential Listings - Short Sale Education
Many real estate agents simply take the first short sale listing that comes their way, and if the transaction fails, will make a decision to not waste their time on future transactions. Others will take a few transactions, and when a low percentage of these close, they will realize the amount of time wasted, and also may decide to not work on any more short sale transactions.
First, we must look at the entire inventory of short sale potential listings, and take note of some of the major trends:
Primary Residences & Investment Properties
Whether the Seller have a hardship
In foreclosure or simply underwater
Property's attractiveness to Buyers
The Lender(s) with liens on the property
Rather than take every single short sale transaction, do your best to prequalify each and every listing. Your time is your most valuable asset, and you only want to take transactions that have a reasonable chance of closing. We recommend taking a short sale listing only if the following four conditions exist. An easy way to remember this is the word TaBLeS; imagine a room full of tables, and a bag of money that is sitting on some, but not all, of these tables.
Timeline: You want to take a listing that has enough time for you to market the property, find a buyer, and complete the short sale process. If a trustee sale is scheduled within a few days, it is probably a good idea to pass on this listing. The best time to take a listing is before a seller is late on payments, or before a lender starts foreclosure proceedings. If a lender has started foreclosure, call them to see whether they would be willing to postpone the sale if you have a short sale application ready to go.
Buyer: Because this is not a standard transaction, they buyer must have two qualifications. First, they need to have the ability to get a loan or have the cash to make the purchase. Second, they must give you the commitment that they are willing to wait for the amount of time required to obtain an approval letter from the lienholders. In some cases, potential buyers have waited from 4-6 months for banks that are slow to process short sales.
Lender: Only enter into short sales if you know the lenders have a good reputation for approving short sales. Some lenders have excellent processes and workload, while others are overwhelmed at the volume of short sales applications they are receiving. Also, if two lenders are involved, examine whether these two lenders will be able to work together to agree on how the net proceeds are to be divided.
Seller: The seller is likely to be distressed, emotionally and financially. If you are taking a listing, you will need for them to have a hardship that they can demonstrate to the bank. More importantly, you will need to have their full cooperation: providing financing documents, telephone calls from the lenders, consulting with their tax preparer and attorney to review the consequences of a short sale.
Look out for our future blogs/articles from our Short Sale Leadership Series content.To view our blog updates, visit www.whbsolutions.com/blog.
