Thursday, October 08, 2009

A tale of two sales

Short sale craziness continues. The short sale team in my office took two short sale listings a few days apart in August. At the time, neither seller had done any preliminary work with their respective lenders. The team went to work getting the hardship and other required documentation together from the sellers for submission to the lenders. Both properties got offers shortly which were submitted within days of one another to the lenders along with all requested documentation. Both sellers had legitimate hardship. Forty days later, one sale was approved in writing and ready to close while the other lender was still asking for more and more documentation. The seller confessed yesterday that he had continued to make mortgage payments the whole time that we were trying to negotiate a short sale with his lender. Asking a lender to approve a short sale while the mortgage is current is like panhandling in an Armani suit. Chances of success are slim.

The take-away: If a property owner has the resources to stay current on the mortgage and does so, the lender will be way less motivated to agree to a short sale or modification. Why should a lender write off tens of thousands of dollars when they can just continue to accept timely payments? Any reader considering pursuing a short sale needs to understand that hardship must be real and able to be proven. Prepare to be asked for documentation similar to that required to obtain a new loan. Without proof of hardship, chances of approval approach zero. With proper documentation, real hardship and an experienced short sale negotiator a seller stands a good chance of successfully selling a property short.

"You have to learn the rules of the game. And then you have to play better than anyone else."
___________Albert Einstein