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Short Sale Pitfalls And Solutions
As a homeowner
considering a short sale, it is important you understand the
process. Following are some of the most common mistakes
agents and homeowners make when handling a short sale.
Your Property Is Priced
Incorrectly
Pitfall: Your Property Is Priced Incorrectly
This is the most common mistake made with
all properties, and the most common reason a property does
not sell.
Solution:
Agent Providing Understanding and Transparency
Your real estate agent will go through a
detailed listing price strategy with you, allowing you to
see exactly where your property should be priced based on
its current condition, sales in your area, and most
importantly, how much time you have left to sell.
Your Short Sale Proposal Is Incomplete
Pitfall:
Your Short Sale Proposal Is Incomplete
This is one of the most frequently seen causes for the
rejection of short sales proposals. Most agents do not
understand the short sale process and what your lender will
be looking for.
Solution:
Understand All Aspects of the Process
Your agent should understand the short sale process in
detail and be able to explain it clearly. The agent should
also be able to communicate effectively with both you and
lenders to produce a complete and cohesive proposal.
There Has Been Inadequate Follow-Up and
Communication
Pitfall:
There Has Been Inadequate Follow-Up and Communication
As your property goes through each stage of the short sale
process, an agent can jeopardize the transaction by not
properly communicating with everyone involved. As the
homeowner, you may not know that your file has been delayed,
and that you again may run out of time to close and avoid
foreclosure.
Solution:
Select an Agent with Experience
The right agent knows exactly how to follow up to ensure
that your lender's issues are addressed in a timely manner,
and will make certain you do not have unnecessary delays.
Not Enough Time
Pitfall:
There Isn't Enough Time
It is critical that your agent understands the foreclosure
laws in your area. They should be able to show you an
estimated timeline for the process, from start to closing.
In addition, they should know how to communicate with your
lender. Certain information can be provided to lenders to
postpone your foreclosure for weeks or months in order to
negotiate a sale.
Solution:
Provide Accurate and Useful Information
Make sure you provide your agent accurate information as to
exactly how many payments you have missed and any
correspondence you have received from your lender. This will
allow your agent to understand your situation and work to
improve it.
Your Deal Is Not Submitted Properly
Pitfall:
Your Deal is Not Submitted Properly
If you do not follow the directions you receive for
submission, then you are expecting an over-worked,
under-staffed department to go out of their way to handle
your file. There is very little likelihood of this situation
working out in your favor.
Solution:
Follow Instructions Closely
If you are instructed to fax your file, fax it and send a
backup copy in the mail. If you are instructed to mail two
copies, mail two copies. When you reach the point of having
a contract, all your information, and a completed proposal,
you do not want your deal to fall apart because no one sees
it.
The Buyer's Offer Is Too Low
Pitfall:
The Buyer's Offer Is Too Low
Many agents will encourage you to submit any offer that
comes in. The reality is that a short sale is not
the same as a fire sale. In order to have a
legitimate chance of getting your deal approved, you must
have an offer that is more attractive to the lender than a
foreclosure.
Solution:
Proper Negotiation
The right agent will work with you to properly negotiate any
offer that you receive to get 'highest and best' from each
potential buyer. This ensures you are presenting the best
possible solution to your lender.
The Buyer's Contract Is Not Strong Enough
Pitfall:
The Buyer's Contract Is Not Strong Enough
Especially in our current economic climate, willingness to
make an offer on a property does not mean that a buyer is
truly qualified to purchase. The reality is that buyers need
to be preapproved for financing, closing funds must be
verified, and their ability to buy needs to be confirmed.
Solution: An Agent Familiar with Qualifying
Buyers
Your agent should be familiar
with what must be verified in order to qualify a buyer to
submit an offer on your property. Otherwise, these offers
may have little chance of closing. Don't risk this process
with an uneducated agent who does not appreciate this aspect
of short sales.
In conclusion, While these pitfalls may
seem troublesome, the right agent can help you navigate your
way to a successful closing. Do not endanger your financial
future and the potential sale of your home with an agent who
does not fully understand the process. CDPE designated
agents have completed extensive training in the short sale
process, and in assisting struggling homeowners who need
real solutions. They understand what you are going through,
and are here to serve and help save your family's interests.
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