Our Professional Short Sale Team includes attorneys, legal assistants, credit negotiators, and processing specialists
Thank you for considering assisting your buyer in making an offer on our Short Sale Listings…… Our Goal is to close escrow as expediently as possible. Follow the below procedure and…
Make Your Short Sale Transaction a Success!
1. Submit your buyer’s offer. If your buyer is in escrow on another property and wants to increase his/her chances by entering into more than one escrow, then he/she is not our buyer. Once we take an offer into escrow, we will close that escrow unless a buyer backs out.
2. Seller’s review the buyer’s offer(s), and seller selects selects an offer to accept. Only one buyer’s offer is accepted by the seller and submitted to the lien holder(s) for approval. Back up offers may be accepted by the seller. All offer received by the seller may be sent to the lien holder for review. Back up offers are not submitted to the lien holder(s) for review until the primary offer is denied.
The seller’s that we represent will consider any buyer’s offer that is most likely to be accepted by the lien holder(s). Buyer’s must provide a written approval letter from their loan officer. This letter must clearly state that the loan officer has verified buyer’s income, credit, assets and that the buyers qualify for the offering price. If this is a FHA or VA loan, then the letter must clearly state that the loan officer has verified that the property address qualifies for the buyer’s loan program at issue.
Our goal is to get you paid 3% and no less than 2.5% (?see below info re: Fannie Mae requirement effective March 1, 2009 that their servicers can not negotiate the commission agreed upon between the seller and listing agent)
3. Upon seller’s acceptance of buyer’s offer, property is marked ‘Contingent Status” Escrow is opened, and buyer’s deposit is put in the Escrow companies account
Once a property is pending, only back up offers will be considered, regardless of price or other terms.
4. Buyer’s complete inspections, secures financing, reviews/approves HOA info(if applicable)upon seller’s acceptance…. not lien holder(s) approval See timetable below. Please note that these timelines can vary by lender and that the above time frames are meant to provide a general timeline, again taking into account that nearly all lenders are overwhelmed with short sales.
| Typical Lender Timelines (for each step in the short sale process) | |
| Get authorization on file with lender | 2 days |
| Compile short sale documents | 7-14 days |
| Get short sale package on file with lender | 3-7 days |
| Short sale package assigned to negotiator | 15-30 days |
| Get BPO/Appraisal ordered | 14-21 days |
| Schedule BPO/Appraisal with agent | 5-10 days |
| Time for BPO/Appraisal to get to negotiator | 21-28 days |
| Negotiate/obtain approval from negotiator | 15-20 days |
| Total: | 77-104 days |
5. Your buyer is notified that the bank has accepted their offer and that they will be closing(usually within 2 to 3 weeks)
Helpful Tips for Buyer’s Agent
The most important part of making a short sale successful is to
….manage your buyer’s expectations!! The process is long and time will pass with no events. There is not a consistent weekly milestone about what we can report.
When there is an update, then we will let you know immediately via our property updates page Relay Transaction Management (you will receive a username and password upon opening escrow). If there is nothing posted, then there is no update!
Terms that we like to see in the Offer to Purchase Contract
Understand that it is our intention to help you the agent, the buyer(s) that you represent, ourselves, and the seller(s) we represent complete a fair and expedient close of escrow. Because of past experience with lien holders, we know what they like, and we have to be creative sometimes to accommodate what the buyer wants and what the bank requires, just call and ask us if you have any questions or concerns. Our goal is to help you and your buyer as much as we can.
1(d) Close of Escrow to be on or before 90 days. Buyer will have 30 days from approval if needed to close.
2(a) Deposit within 3 days of acceptance, If you make the deposit a contingency of approval, then the seller will counter that point.
4(a) and WPA Seller may counter out termite. Buyer’s should perform the termite inspection early. Termite clearance is often covered by the lien holder. Please call to see if we have a termite inspection for the property on file, and ask before making an offer if this is an issue.
4(e) Buyer to pay all HOA related fees, if any. Call us to see if there are any delinquent HOA dues, there may not be!!! The seller’s that we represent are encouraged to stay current on their HOA dues. Some will, some can not afford them. The lien holder will usually counter out the HOA past dues, transfer fee, and doc prep fee. If there is any past amounts due, we will usually have this amount on file.
(f) Buyer to pay home warranty, if any, of buyer’s choice
SSA: Attach an SSA with a date of 60 days from acceptance in paragraph A
All Offers must contain provisions similar to the following:
(the best way to do this is an addendum to the RPA)
-Buyer and Seller agree that this is a short sale. All terms conditions and commissions are subject to lien holder(s) approval. Acceptance occurs when Buyer and Seller have executed the offer and applicable counter offers. Approval has occurred when all lien holders have issued written approval of the sale to escrow.
On our past transactions, we’ve found this helps Seller’s and Buyer’s understand and invest in the transaction (This is consideration for the Seller’s going into a pending MLS status to preclude overbids).
-Notwithstanding any other provisions in the RPA or SSA, Contingencies under paragraph 14 will be removed within 14 days of acceptance. Loan contingency in paragraph 2 will be removed within 21 days after the day written approval was delivered to escrow. No loan contingency may carry through until closing.We are best able to negotiate with the lien holder about known defects early on in the process. An agreement to perform inspections early on signifies that a Buyer is both serious and invested in the transaction.
Remember we have experiences with Short Sales and dealing with Lien holders and we want to help you put your offer together.
Fannie Instructs Its Servicers Not to Cut Commissions on Short Sales
In response to concerns raised by NAR, Fannie Mae instructed its servicers on February 24, 2009, not to negotiate commissions on short sales below the amount negotiated by the listing agent (unless the commission exceeds 6 percent). The requirement took effect with respect to closings on or after March 1, 2009. Fannie Mae recognizes that (a) negotiating commissions for short sales is unfair because short sales require intensive work over many months, and (b) compensating real estate agents fairly benefits Fannie Mae because agents play a crucial role in short sales. Freddie has agreed to issue similar servicer guidance. To view the Fannie announcement, please visit https://www.efanniemae.com and search for “Announcement 09-03”.
No Negotiation of Preforeclosure Sales Commission
Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers
Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a
reduction of the total commission to be paid to real estate agents to a level below what was
negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales
price of the property in aggregate. Servicers are reminded that they must continue to obtain
any approvals that may be required by interested third parties in connection with preforeclosure
sales.