Short Sale is Long Sale

In 2007-2010, most of our contracts & listings have been short sales. From our perspective, it is 5-10 times harder to get to the closing table then a traditional sale. I’ve seen blogs saying 10% close. The Metts Group has closed 95% of our short sales.

A lot of work is involved, gathering needed paperwork from the seller, preparing reports, CMA’s, letters to the bank. Once we have an offer, we fax in the 50-100+ document to the sellers lender. Let the game begin!!!! We follow up daily, most banks take weeks or months before the document has hit the desk of a processor.

A processor orders a BPO (Broker Price Opinion) from an independent agent. That’s a whole subject by itself. The bank may ask us for more documents. When the file is completed to their liking, it goes into no man’s land for possibly several months.  The process has gotten better, I heard an agent got an approval from Wachovia in 11 days!!! Average, 3-6 months!

The longest short sale we had took 9 months. Cooperation from the buyer and seller is necessary. In this case, both were difficult. The bank (sellers lender who will remain nameless) went through several processors, 4 negotiators and management/investor approval. Ouch! Meanwhile I was begging the buyer and seller to stay in the game. One negotiator was reassigned to a processor, one was let go or quit, one was promoted and finally I received a negotiator who got the file approved. Somewhere during the process, because to the months of shifting around, the BPO was reordered and came in $170,000 higher??? Wow. A third BPO was ordered and the buyers had to raise their offer, which took a month for them to decide again. WE CLOSED! OK that was a worst case scenario.

Our shortest short sale took 37 days. Short Sales are very unpredicable, very risky, if you have to move at a particular time, I would advise you to avoid them. However, it still is the best solution for everyone involved if you have the time to stay in the game. Sellers may receive a forgiveness for a large portion of their debt due to the market shift and their hardship situation. They get a hit on their credit (50-80 points), but not even close to a foreclosure or deed in leu (250-300 points). The homeowner can recover in 2 or so years, instead of 7-10 years with a foreclosure. Banks receive cash flow and avoid heavy attorney fees and other costs of a foreclosure. Buyers get a great deal!!!!

Working in the trenches for the past 10 years as a full time Realtor, we have a clear perspective of the good and the bad of the industry. The Metts Group will work hard to earn your trust. With that being said, we will share our experiences, give advice and opinions on the market. Since we work in one of the top volatile real estate markets in the US which changes by the day, we hope you can see the value of our services.

Any questions on the short sale process, we will be happy to help. We plan to post several blogs on this subject as well as others. That’s it for now.