Short Sale - Ten Questions Answered By a Bank Loss Mitigator

1. Why might you ignore a Short Sale Package that you received?

Answer: Incomplete packages are set aside. For example if someone doesn't include a HUD-1 Settlement Statement that package is set aside. The Borrower must supply financial information, tax returns, hardship letter and more. (If you have questions about what documentation is required, please contact me.)

2. How many Short Sale files are you working on?

Answer: I am currently working on 400 files. Of those, I would say only about 100 files are workable. This is why it's important to submit a complete packages and to know what you are doing.

3. Does it matter if the Buyer in a Short Sale deal is an LLC or an individual? Do you look at them differently?

Answer: It doesn't matter. We want to know that the buyer is qualified. We look at the market value of the property, the loss we are going to take, and what's owed on the loan.

4. Does the type of hardship the Borrower is facing make a difference?

Answer: Not really. It's a financial decision to the bank. However, it doesn't look good for the bank if we foreclose on a sick, elderly couple. Of course, we do want the Borrower to prove hardship, but the type of hardship doesn't matter.

5. How long does it take for you to conduct the Broker Price Opinion?

Answer: We try to have the BPO completed within 10 days of ordering it. Right now we are backlogged and it is taking quite a while to get the order out. The first step is to receive a complete short sale package. We don't order the BPO until then. Once the BPO is completed it is then reviewed and approved by our valuation department.

6. Do you simply reject low offers?

Answer: Not really. We do have certain targets we are trying to reach. (I've heard around 83% of the BPO.) We also have a certain dollar amount of loss we might accept. (I've heard around $75,000.) Sometimes it's a matter of pointing out repair issues. Tell me why the offer is low and why it should be considered.

7. If the foreclosure sale date is at hand, will you postpone it?

Answer: If it looks like we are close to accomplishing a short sale, we might postpone the foreclosure sale. We need a good reason to do that.

8. Do you ever change the BPO once received?

Answer: No. Once the BPO has been received and approved by our valuation department we will not change it. Why would we? The value is what it is.

9. Do you require a home to be listed before accepting a short sale?

Answer: No the home doesn't have to be listed. We will talk directly with the buyer/investor. We don't usually talk with the borrower.

10. Will you disclose the BPO results?

Answer: No, we don't disclose the BPO. However, we will talk in ranges of price when negotiating. Our job is to get as close to the BPO as possible.

If you are considering a short sale, be sure your Realtor is experienced and knowledgeable!

About the Author: Dan Forbes

Dan Forbes is the broker/owner of Premier Team Inc., Realtors, in Bradenton, Florida. He has assisted over 1000 Bradenton, Florida real estate buyers, sellers, and investors. He is also president of the Bradenton Real Estate Club. BradentonFloridaRealEstate.com and TheRealEstateZoo.com Dan is an author, speaker, and seminar leader as well as an active Realtor working with Buyers and Sellers.

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