Short Sale Thoughts
So about 4 months ago I was asked to represent a client here in Charlottesville on a short sale of a condominium unit that he had purchased about 3 years ago. Ever since then, we’ve learned a LOT of things about short sales and I’ve even been the source of short sale education/updates to other Realtors, attorneys, and potential sellers here in town. Here are some of the things we’ve learned;
1. As Bill Tucker at Tucker, Griffin and Barnes, puts it so well, “There are NO Rules.” There is no predicting what will happen in a short sale; how long the bank might take to respond, if the bank will counter-offer or reject the offer that Seller and Purchaser have long been in agreement on, or if the bank will even acknowledge the receipt of your documents that you’ve been sending.
2. Sellers must be patient, consistent, and very motivated to achieve the short sale or the home WILL go into foreclosure. The success we’ve had with the short sale I’m currently working on is due in large part to the daily calls made by both myself and my seller to the lender, to assure that all documentation is complete and has been received and making sure we are always on track and progressing forward.
3. Sometimes, the bank WILL move quickly. I was told from day 1 that my Seller need not submit his full set of paperwork on the short sale until after we received an offer, because I was told the bank would completely ignore it. While this may be true, my seller proceeded to submit the paperwork 3 different times prior to receiving an offer, and until he was given notification that the bank had, in fact, gotten it. While the bank probably didn’t as much as give it a second glance, it was all completely ready the second we got an offer, which resulted in having someone assigned to our file THE DAY we had an offer come in, and the appraisal and BPO both being ordered within 2 calendar days of receiving the offer as well. In horror stories that I’ve heard about this, this process of assigning someone to the file and ordering the appraisal and BPO has sometimes taken 4-6 WEEKS. I highly recommend that Sellers acquire this packet of documents early on, complete it IN FULL, and continue to send it to the bank until they receive it.
4. The bank MAY counter-offer. In this case, the bank chose to counter-offer with an offer just $700 away from what the agreed-upon offer had already been. It seemed like splitting hairs to us, but the Purchasers in the transaction agreed to the new price quickly and we were back to square one- not all Purchasers will understand this, and not all will be willing to continue to negotiate.
