Being that the real estate climate is what it is these days, it would seem that lenders would be begging for short sales. If you ask: “why would a lender consider a short sale where they receive less than they are owed?”, I’m here to tell you there is a huge and obvious reason…they will lose more if they foreclose. A foreclosure can cost a lender an extra $40,000-$60,000 in attorney fees, trustee fees, holding costs and maintenance expense on every foreclosed property.

I won’t lie to you and tell you that short sales are easy. In fact, my experience is that they are anything but easy. It’s a very dynamic process with lost of moving parts and the lenders keep changing the rules as we go along.

There is a very specific process to getting short sales done successfully. And there’s also a way to cut to the front of the line, power through the bureaucracy and make the process work.

Essentially, here are the steps to the process:

1. Conduct a homeowner interview and complete application
2. Perform a financial analysis of viability
3. Set expectations of outcome with homeowner
4. Contact lenders for Short Sale Package
5. Interview lender to determine guidelines
6. Advise homeowner on course of action
7. Prepare workout package
8. Build a case to the bank(s) for a proposed solution
9. Determine timeframes and monitor Trustee sale date
10. Negotiate counter offers (if necessary)
11. Close the deal!

Now, this is a very general overview. Very few real estate agents have ever conducted a short sale negotiation with the bank and seen it all the way through successfully. It takes patience, knowledge and probably a shot of good luck. There are so many issues that can pop up and delay a transaction from closing…or worse, make it impossible to close.

In my next post, I’ll talk about what causes the mort frequent problems with short sales.

Do you need some guidance on which direction to go? Attend the upcoming Town Hall Meeting for Distressed Homeowners by clicking here and learn more about the short sale process.

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