Why Short Sales Don’t Always Close

by | BiggerPockets.com

When I began my career in the field of real estate, it was (and still is) my third rodeo. My previous careers were in education and in educational publishing, so I was accustomed to meeting deadlines and working with others. In the field of real estate, I am continually surprised by the fact that real estate transactions are so hard to close. Each and every transaction (and this was even before short sales were a dime a dozen) involves so many different players, and it is always so difficult for everyone to perform up to snuff and meet deadlines.

In the distressed property market, the ability to close on time is at least ten times more difficult. In addition to a buyer, a seller, a buyer’s lender, a buyer’s agent and a seller’s agent, now there is also a mortgage lender—maybe even two or three. With all of these players involved, it seems that only when the stars are aligned will a deal close on time.

One thing that listing agents (and/or short sale negotiators) can do to speed the process along is to create the most perfect short sale package for the mortgage lender. Doing this takes time, but it is time well spent because a complete and perfect package will get reviewed much more quickly and efficiently by the short sale lenders.

Short Sale Package preparation is very time consuming. And, it is extremely common for a real estate agent to put together a short sale package and fax it off to the bank just to find out 3 weeks later that the short sale package was not received. Why is that? Well . . . there are several reasons that the bank cannot confirm receipt of the short sale package. Understanding these reasons may make your future short sales go through more quickly.

The first reason is that you may not have faxed the package to the correct department. Getting the correct fax number from the bank employee who answers the phone is sometimes challenging. You need to ask where to fax the short sale package. Some banks have one fax number for authorizations, another for loan modification packages, and a third for short sale packages.

The second reason that your package may not be in the system is that you may not have documented the loan number clearly on each and every page of your fax. You see . . . some banks have employees whose job it is to receive electronic files of the faxes and then electronically apply those faxes to loan files. So, if you are off by one digit or the loan number is not clear, your short sale package will go by the wayside.

When faxing the short sale package, you are at the mercy of a bank employee who, like all of us, may be having a bad day or may not be in the mood to work on the day your package is received. Because of these reasons, it is vital to confirm receipt of the package 48 hours after you have faxed it . . . and every 48 hours after that until the package is received.

It may seem trivial that the loan number must be on every page or that you may have faxed the package to one department instead of the other. However, attending to small details such as these may make the difference between a cancelled short sale and a successfully closed short sale.

Sidebar: The information presented here does not apply to short sales processed through the Equator system. For those short sales, create an account in Equator and follow the lender’s instructions for initiating the short sale.

Photo: Yortw

About Author

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®. Before landing real estate, she had careers in education and publishing. Many folks say that Melissa is genetically pre-disposed to success with short sales. In fact, last year she and her staff obtained over 500 short sale approval letters! When she isn’t speaking with lien holders, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.


  1. Great tips. I cant ell you how many times I have had some inattentive agent blow a deal because they missed something simple like a loan number on a document, or simply failed to follow up with the lender after submitting a package. I have gotten to the point where I don’t even submit an offer on a short sale listing without first interviewing the agent involved.

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