Real Estate Investing Basics

In Short Sales, Time Is of the Essence

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79 Articles Written
Short Sale Approvals

Just the other day, many of us counted down and watched as the ball dropped in New York City and another New Year began. Happy New Year to you. I hope your celebration was a fun one. Did you stay out past your bedtime?

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It’s funny how the world is so focused on time. We count down to the New Year. We set our watches and our clocks. Isn’t it great that many of our cell phones now set themselves since they are calibrated to Internet time?

However, this obsession with time doesn’t always transfer to real estate—but I believe that it should. First off (and this is generally for real estate agents and lenders), if you get an Internet lead or a phone message from a prospective client, you need to return that message as quickly as possible. We have officially transitioned into a me generation. This means that if you do not attend to the needs of the me who called, this individual will move on to another as quickly as you can snap your finger.

The issue of time is interesting (possibly ironic) with respect to short sales. In many short sales, the clock is ticking. Foreclosure may be imminent and the individual doing the short sale negotiating needs to be mindful of the foreclosure time frame.

Additionally, there is the chronic issue of the lender taking what seems like forever to receive a short sale package, to assign a negotiator, and to approve a short sale. It’s always a bit ironic when the short sale negotiator calls you on the phone after about 3 months and says that s/he needs updated pay stubs and requests those pay stubs by the end of the business day. It’s frustrating because the file has not been addressed for such a long time. And then, all of a sudden, you have to scamper around like a crazy person trying to get what the bank wants post-haste.

Sadly, however, that’s the nature of short sales. If you hem and you haw or if you complain and dig in your heels, you may be less likely to get that short sale through the system. Time is definitely of the essence when working short sales—at least it’s of the essence to everyone except perhaps our friends at the banks.

Photo: flickr creative commons by GlobalJet

    Eddie M
    Replied almost 9 years ago
    Very informative, the more information the better for the client.
    Armando Montelongo
    Replied almost 9 years ago
    Time is definitely of the essence in all aspects when relating to the bank. They want drag their feet, but when the time comes and they ask something of you, get it to them ASAP. Great article.
    chris eliopoulos
    Replied almost 9 years ago
    In my experience the concept of short sale is a waste of time and possible client loss.Institutions behave in a manner that does not encourage closings and the majority of buyers NEED a place to live .So far the institutions “ignore” that basic motivation factor. Further the paper work on behalf of the institutions is unreasonable and unbearable. In view of new developments in the news that institutions have FAULTILY foreclosed and taken back properties, many people are suing demanding their properties back. I QUESTION their ability to deliver title.What will happen if I’m the selling broker, close the escrow and in 3 months, I get sued from the previous owner, who is bringing legal action against the institution that foreclosed on him and he is SUCCESSFUL? Even if I’m to be found innocent who is going to pay my litigation costs? Do you think that this scenario is far fetched? Think again . In the early 90s lenders had a close in their origination contracts with brokers, that was dictating in case of default of the borrower, FOR ANY REASON, the broker at demand by the lender was responsible of paying off the loan. I have several unsigned contracts on file to remind me of the insanity. When I questioned one of the lender’s rep about that close his answer was : Common on every body up and down Wilshire Blvd is signing it (Beverly Hills)……. I didn’t and about 1992, I witnessed many that have signed these kind of contracts either go bankrupt or trying to find ways to settle them. What I’m saying here is that although short sales and foreclosures sound good, one has to proceed with EXTREME CAUTION because they both require TOO MUCH work to be taken lightly.