What Do Short Sales and Used Cars Have in Common?


In order for a short sale to be successful, the process needs to run like a well-oiled machine. Just like an automobile, the short sale needs to be attended to with regular (metaphoric) oil changes and other maintenance services.

When purchasing a used car, it’s important to do your homework first. Guess what? When selecting a short sale to list or buy, it is also important to do your research first. The automotive research is the equivalent of pre-qualifying the short sale. Pre-qualifying a short sale seller is one of the most important steps at the beginning of the short sale process.

It may seem a little strange that you would need to pre-qualify a short sale seller. But, when purchasing a used automobile, don’t you take it to the mechanic to get checked out first?

Just like getting a loan pre-qualification or pre-approval for a home buyer before the purchase of a home, you absolutely must pre-qualify your seller in order to assure that the potential short sale transaction will net a positive result. Pre-qualifying the seller means not only verifying hardship, but also assuring that the seller is going to be cooperative. Is the seller going to be willing to submit all of the requested documents (such as tax returns, pay stubs and bank statements) to the bank? Or, is the seller going to vacillate each time the bank requests an item.

Some sellers are under the impression that they rule the roost. But, a short sale is a form of debt settlement. Sellers (and their agents) are putting together a deal and asking the bank to accept that deal. The bank doesn’t have to give any seller a short sale just ‘because.’ Sellers need to apply for the short sale. All terms and conditions of the transaction are subject to lender approval. Frequently, banks will ask for items at inconvenient times and give strict deadlines, so it is important to assure that the seller is aware of the distinctive (and sometimes exasperating) features of the process and is willing to cooperate.

Another way in which the seller will be required to cooperate is with regard to property showings. Since a purchase contract is generally required in order to successfully negotiate a short sale and receive an approval letter, sellers must make the property accessible. For some, this is not difficult. For others, especially those with tenant-occupied properties, this can be more challenging.

So, remember that pre-qualifying a short sale is like purchasing a used car. Some automobiles look pretty on the outside (no scratches or dings). But, if you are going to buy that pretty little hot rod, you will definitely inspect it first. Take the same action with regard to your short sale. After all, nobody wants to end up with a lemon.

Photo: flickr creative commons by Rachel_titiriga

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. Nicely done Melissa. “Pre-qualifying the seller means not only verifying hardship, but also assuring that the seller is going to be cooperative.” I had to learn this the hard way back in 2008, when a few sellers disappeared after signing the purchase agreement. I pre-qualify now though!

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