Everyone always discusses the grand irony of short sales. That is, we wait and wait and wait for the bank or the negotiator (or processor) at the bank to finally get to our file. Then, all of a sudden, they want something. They cannot find the listing contract; they do not like a signature; they want updated bank statements. Whatever it is, the bank wants it and wants it now! It does not matter that it took eight weeks for your file to finally hit the processor’s desk. Now that it is there, it must be dealt with immediately or they will close out the file.
I can hear it now. “Close out the file? Are they crazy? I’ve been waiting eight weeks for the file to finally land on your desk and now you will close out the file if I do not provide updated bank statements in two hours.”
It seems that it’s Murphy’s Law. In any file where new and additional items are requested, the short sale sellers do not have access to a cell phone, or have gone to Europe and cannot be reached.
It can be extremely frustrating to wait and wait for the bank to call—only to hear that you have only a handful of hours to pull together the updated documentation. And, sometimes even if you try to share your concerns with the bank employees, those concerns do fall on deaf ears.
So, what can be done about this issue? One of the most important things that agents and buyers can do in order avoid a file being closed out for lack of documentation is to assure that the seller is motivated. A motivated seller will always be ready, willing and able to share information. A motivated seller will cooperate not only with respect to property showings but also in any and all dealings with the bank. Motivated sellers want their home to close in a short sale and want to avoid foreclosure.
After all, if the deal is going to go bust because the seller doesn’t want to provide a specific item to the bank, both buyers and listing agents would probably want to know that before you spend hours preparing the short sale package and negotiating the short sale with the bank. Of course, you’d also want to know if the seller was going to opt for loan modification or bankruptcy before agents spend money advertising the property or putting together the transaction.
So, one crucial and easy way to get the short sale closed as quickly and efficiently as possible is to make sure that the seller is cooperative and has been educated about the fact that if the bank says jump, the seller needs to ask, “How high?” Negotiating debt settlement requires give and take and also demands the participation of all parties.
Photo: flickr creative commons by kreg.steppe