Short Sales - Why Are Realtors Making Short Sales So Elaborate?

Yesterday I answered my phone as I always do, it was a referral client. A local HUD counselor had referred me a homeowner, who had worked on a loan modification and ultimately been rejected. I would say 50% of my clients that come to me have been denied for a loan modification.

This new client began to describe this elaborate "scheme" other Realtors had suggested, in order to help him sell his home.

Let me tell you, if a real estate agent knows what they are doing, this is not a difficult process. It requires follow up and attention to details, the agent must supply the Lender with every item they request and follow up weekly.

So the "scheme" as I'm calling it, included the homeowner not maintaining the pool & landscaping for a week. He was told by other agents that this would help the BPO (broker price opinion- basically the mini-appraisal the bank orders) come in at a lower value. These other agents suggested he clean up the house for showings to potential buyers. So that the bank thinks the home is worth less, while the buyers see the home all nice and pretty.

This is laughable- first, you need an offer from a buyer before the lender orders the BPO. So it was all backwards, also, the banks are having the BPO done within 4 days of the offer being received, so in reality the homeowner would only have 4 days to not maintain the home.

Again, this is all such a show. Short sales have a bad reputation because they take work and continuous follow up. If an agent understands the process, the agent submits all necessary paperwork, follows up weekly and most short sales can be completed in under 90 days.

Basic Short Sale Process
1. Paperwork- We, the Realtor, bring the listing paperwork and all paperwork necessary for your bank. We can do this all in one appointment- generally about 1.5-2 hours worth of an appointment.
2. Offer- We need an offer from a buyer to postpone any foreclosure dates, so the home is shown, using our lockbox. Once we have an offer we move to the next step.
3. Bank Submission- Since the bank must approve the short sale price- because they are taking a loss, all paperwork must be sent off to the lender. This includes, but isn't limited to: purchase contract, listing agreement, bank statements, tax returns, financial worksheet, letter of authorization and whatever else your lender has requested.
4. BPO- the lender orders a BPO (broker price opinion), basically a mini-appraisal to make certain the offer to purchase is within fair market value.
5. Lender Approval- Once the lender reviews all documentation and determines the offer is within fair market value, the short sale is approved.
6. Closing- generally close of escrow is 30 days following bank approval.

Do not allow another agent to tell you there is a "huge strategy" involved with the maintenance/ lack of maintenance. You must show the home to potential buyers, so yes the home should be clean and ready to show at all times. Anything other plan is a waste of time and energy.

The goal of a short sale is to sell the home, help the Seller be relieved of a home they cannot afford. The buyers are more than willing to purchase a home for a fair price. In the end, everyone wins, the seller sells and the buyer buys. End of story.

Charlotte Allred is the Designated Broker for Secure Real Estate in Chandler Arizona. Secure Real Estate works to help Sellers who are struggling with their home as well as Buyers to find their new home. We pride ourselves on the utmost professionalism and bringing significant knowledge and thus value to our clients. Please see this article at: http://www.securerealestatephoenix.com/real-estate-short-sale/short-sales-why-are-realtors-making-short-sales-so-elaborate/

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