Buyers understandably find it difficult to locate a perfect
home, only to be forced to wait in the dark for an extended period of time
before knowing if their offer is accepted by the short-pay lender(s).
Sellers seem to grow noticeably more anxious as review time elapses and
foreclosure becomes more imminent. Like a virus gone airborne, the agents
representing these buyers and sellers soon begin to show symptoms of concern,
overwhelmed with the thought of another short sale gone sour. You may be
wondering, “Is this the case for all short sales? Do I really need to play the
Waiting Game?”
As a hands-on negotiator active in short sales each and
every day since 2008, I have learned how to cut down review times so my
agents and their clientele can more swiftly jump into escrow and complete their
transactions. Following these pointers below won’t generate approvals
overnight, but review periods can be contained to a manageable time frame of 45
– 60 days, from offer submission to short sale approval release:
1. Strategize before the Attack: It’s never advisable to send in an
incomplete package in exchange for initiating short sale review that much
sooner. Since your file will not advance beyond the set-up phase until
the lender deems it complete, it makes sense to take the extra time to review
all documents for completeness and accuracy. Make sure dates and
signatures are present where required, and make sure all items are present and
accounted for. In short, do NOT compromise the file underwriting
process. You will find that the largest root of file review delays stems
not from the lender falling behind, but instead from the lender trying to work
to tie up loose ends.
2. Know Thine Enemies:
Each and every short-pay lender has its own unique organizational structure and
document requirements. Before deeming your short sale complete, make sure
you are aware of any specific lender requirements which can be handled prior to
file submission. Additionally, understand that each lender employs its
own escalation procedures designed to correct a file review which has fallen
off course. If you know what resources are available to assist your file
you will be able to mitigate unnecessary delays more efficiently. To
minimize review times, make sure to know the ins and outs of bank escalation
procedure and their personnel hierarchy, so you can pinpoint how, when, and
with whom to red flag your files.
3. A Good Defense is a Great Offense: Before submitting a buyer’s offer, have
a good idea of how the initial standing offer holds in comparison to true market
value. Expect a bank counter requirement of some kind, and ideally leave
yourself wiggle room to counter in return. As the old poker saying goes,
“always leave yourself outs.” Also, like a soldier going to battle, arm
yourself with inspection reports, CMAs, appraisals, and any other literature
which will help you address seemingly high lender counter requirements.
Having such materials will help you work through the exercise I like to call bridging
the gap, wherein you work to best align your buyer’s best and final offer
with the short-pay lender’s baseline counter payoff requirements.
4. Respect your Opposition: It’s amazing how many times I hear of listing agents [or
their assigned negotiators] mistreating their file counterparts within lender
short sale departments. Understand that these individuals have an
enormous workload, and at the end of the day, are humans too. Bank
negotiators may never admit it, but their review priority is certainly
influenced by file personalities. Always try working through problems
with your immediate contact, and resort to complaints (only) when
absolutely warranted. If you cry Wolf prematurely, you will be
ignored.
5. A Chain is Only as Strong as its Weakest Link: Probably the most widespread problem
with short sale files, and ironically the one area which can be most
controlled, is communication amongst file players. As a short sale agent
/ negotiator, it is vitally important to provide continual updates to your
buyers, sellers, loan officers, escrow officers, and everyone in between.
As your file hits each new review benchmark [file acknowledgment, value
ordering, value recording, counter, final submission, and offer acceptance],
make sure to update all persons involved with the file. Doing so will
keep each party out of the dark, and will actually give the impression of a
quicker review time frame. You’d be surprised how many more of your files
close successfully simply by updating file players as the review
progresses. Because this constant updating and follow-up takes time and
energy, agents find it extremely advantageous to utilize the services of third
party negotiation companies or their own in-house negotiation team to handle
this burden.
As an active California Realtor and short sale negotiator, I
hope you will find these pointers as helpful as I do. It’s certainly no
easy task, but with unwavering commitment and organized systems, I’m confident
you will see these techniques improve your short sale success rates by
containing your file review time frames.
