<h1>Short Sale Series-Part Four</h1> <p><img alt="" width="274" height="161" style="float: left" src="http://activerain.com/image_store/uploads/5/7/4/6/0/ar125054002506475.jpg" /><strong>Part 4-The Marketing, Contract, and Negotiation</strong></p> <p>We have gone through the interview process, we have all the documentation required by mortgage companies, we know the mortgage situations, and if any other types of liens have been filed including tax liens. We now know what we are working with. What's Next?</p> <p><strong>Pricing</strong>. How you price a short sale depends on the market. In Las Vegas, pricing is going to be much different than Oklahoma City because Oklahoma City is not doing poorly. Let's take a recent example. The home had been marketed at a $185K price bu the previous Realtor and 5 months later it had not sold. Sure the appraisal could support that but the market does not. We get it as a short sale and drop it to $165K and within 30 days have a contract. We also factored in the amount of loss based on mortage payoff. The price will be aggresive so we can get to the next steo</p> <p><strong>Contract</strong>. As I said in the the last segment, you still own the home so sending multiple contract to the lender is not only wrong, it violates our state law on single party brokerage. We look at the best possible offer, with an experienced Reator preferably, especially if we have a patient buyer. Remeber that the contract is still subject to lender approval so even if you sign it, they have the final say. Lender will pay closing cost, but they will not allow for repairs, and certain items like a service contract, which we used to call a home warranty will not be allowed. We can take FHA or VA contract offers, but the home needs to be in very good condition, and a buyer would have to be reponsible for all appraiser mandated repairs.</p> <p><strong>Processing</strong>. Their is a science and an art ot this. First it needs to be a complete packet with the contract, and a non-contingent pre-approval letter. Lender won't take it otherwise. It has to be acknowledged by the lender and some take up to two weeks to upload it into the system. We have a process that insures this and i would rather not share our secret. It will be assigned to a loss mitagator, and our goal is to get it to the next level of getting an appraisal or broker price opinion.</p> <p><strong>Price Opinion</strong>. This is where an experienced short sale Realtor is worth hiring especially if it is a Realtor BPO. There are Realtors who live off the pittance that these companies pay, so they don't necessarily care about accuracy. Why do lenders do this? Money. They charge a lot more than what they pay the Realtor. it is imperative that the listing Realtor meet the BPO agent and to come armed with market data. Often the BPO agent is pleased that you have done the work for them. We had one situation in a relatively new neighborhood where the BPO on a 3 year old short sale came in higher than new construction cost. Two months of challenging the BPO got it reduced. This can be the source of our greatest frustration, but we fight for our clients and the buyer.</p> <p><strong>Closing</strong>. Finally! Done properly, you come to closing bringing no money, but we have been on the buyers end of short sales where owners do bring money which partially negates the value of it. Again we have had no one bringing money to closing in our short sales. You have kept the utilities on, maintained the yard, and now you are signing papers. Before you sign you have received the full negotiated settlement we arranged. On that not only do you have zero cost, you also have a full release from the first mortgage without deficiency. We have also negotiated how it will be reflected on the credit report and short sale never appears. In a later post we will deal with exceptions imposed by second mortgage companies and/or private insurers. Not all short sales are created equal. </p> <p> </p>