Short Sales: Are You the Weakest Link?
Do you remember that game show that was on a few years back called The Weakest Link? Don’t quote me on this, but I believe it originated in the United Kingdom, and later was on television in the United States. In the program, the host(ess) would ask general knowledge questions and the ultimately eliminate those on the teams who were the weakest members—stating, “You are the weakest link.”
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To bad a short sale transaction couldn’t be a game show. In a short sale transaction, you have so many team members—each with his or her own responsibility.
First off, you have the short sale seller. The responsibility of the seller is to be forthcoming, to provide documentation when requested, and to make the property available to prospective buyers.
Another member of the team is the listing agent. The short sale listing agent is responsible for providing the seller with all the information required about the short sale process. The listing agent is also responsible for conducting due diligence with respect to the propertyâordering title reports, researching liens, collecting and preparing documentation thoroughly and quickly.
A third member of the team is the short sale negotiator. (This may or may not be the listing agent.) The individual doing the negotiating with the lien holders is responsible for knowing about the short sale procedures of the major lending institutions where the short sale negotiations will occur. This individual must be well-organized, tenacious and have a strong understanding of the short sale process.
Another member of the team is the buyer’s agent. The buyer's agent represents the buyer in the purchase of the short sale and (one would hope) has explained to the buyer the risks and benefits of purchasing a short sale. The buyer's agent has detailed the short sale process and has verified that the buyer is pre-qualified or pre-approved for a loan (when necessary).
A buyer is also a member of the team. The buyer needs to be ready, willing, and able to perform. Buyers of short sales cannot be jumping from house to house, placing offers willy-nilly. The buyer must understand the importance of signing a contract and the risks involved when placing an earnest money deposit in escrow or in trust.
Other members of the team include the bank employees who do the short sale negotiating, the escrow and title officers, the buyer’s lender, and possibly an attorney. Each is expected to do their job quickly, efficiently, and professionally.
Sometimes I'm involved in transactions where one of the players completely drops the ball. Maybe the buyer cannot obtain a loan or perhaps the escrow officer has not ordered the HOA documents in a timely fashion. I've often imagined the host(ess) of the American version of The Weakest Link expelling the individual from my team. So, in your short sale, who is the weakest link? Be careful, it could be you!
Photo: flickr creative commons by brizzle born and bred