There are other learning curves we have taken in the mix of these distressed sales. Junior lien holders, tax liens, HOA judgments and arrearage’s make not be items that will be fully absorbed by the Short Sale lender and must be accounted for.
Another mindset infraction commonly plaguing these transaction is that Agents representing Buyers in these purchases seem to feel it part of their Fiduciary responsibility to keep their Buyer financially and attentively innocent until the Short Sale lender approves the sale. I am always dealing with this question in talks and Seminars I facilitate. I tell Agents with this consideration about the number of Buyers, Sellers and Agents out there that tell the stories we hear when the Short Sales sounded easy, and that were approved in a short amount of time. Stories that truly express the belief that Short Sale property can represent an extra value proposition over its REO competition. There is usually a live Seller that is disclosing what they know about the property, their usually maintaining the property and have not excavated the cabinetry and poured cement down the plumbing drains. There may be value there, enough to justify a Buyers investing four or five hundred dollars to perform an inspection, investigate the property and remove that contingency from the transaction early, even though there exists that risk that the sale may not go through.
Some of us may be rigorously staunch lead generators. If we are, we know to systemize and prioritize our leads to leverage our production percentages. Why would it be any different with regard to the waiting game of short sale process purgatory?
With millions or offers being submitted, depending on the size of the Bank or Servicers, incoming files are opened, processed through some system which favors priority and leverage. These must at many times be sifted out from hundreds of files by someone perhaps not as experienced in making the final dispositions on these sale files.
Regardless of the various styles of this sifting and sorting you can make a serious difference in the timing by which your package sorted into ACTION.
First of all, you would think that the first thing a lender would do is look at all the cool stuff in the Sellers hardship package and place their sole excitement on that above all. The quality of this part of the package though important is secondary in purgatory. Sorry, there are other elements to a swift ready closing that might mean the leveraging of their time.
If the lender does what they are supposed to do in the bigger picture of loss mitigation, a mitigating factor would logically include time. With the old school of Short Sales representation, we place our Sellers (and Buyers) in a nonperforming sale, and then chase an uncommitted Buyer after a Lender Approval many months after contract; we create time in working against us. We do this time after time, though with the many successes we do have with 2nd and 3rd Buyers, we know we eventually get many of these deals closed.
Part of the perpetuating mindset that hoaxes our deals is our insistence that because we are use to working the way of the Old School, that we run the risk of losing our Buyers by asking them to place the very "Skin" in the deal, that may singly be the cause most Short Sales that have been approved within the first 60 days. If this writing creates any kind of movement, my hope is that is causes every Agent in our profession to get some additional mindset training. Then the most knowable of us will prosper quickly. (End)
© 2010 Bryan Ridgley
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