Top 10 reasons why your short sale will not close

Editor,

10. You’ve sent multiple offers to the bank. Put yourself in the bank’s shoes: What would you do if you got three, four, five or six offers on your property? That’s right – you would wait to see if you get more offers at higher prices. We all know short sale departments at banks are extremely organized, and they can surely keep track of multiple offers. (Yes I’m being sarcastic.) Oh, did I mention accepting and having your seller sign multiple offers is probably a little against the law and at the very least unethical? Third party approval is just a contingency like an inspection or financing.

9. You don’t call the bank periodically for updates – you rely on them calling you. With literally thousands of short sale offers coming in, you need to keep your file on their minds. Files are always lost or misplaced; yes, even in this digital age they get lost in cyberspace. A file goes to a negotiator via email and the pdf gets deleted accidentally. Do you actually think the negotiator is going to remember – let alone try and recover – that info when he/she has another 100 or so to work on? They just say, “NEXT.”

8. You don’t bother to lower the price periodically. Do I really need to explain this one? This is real estate selling 101.

7. Your marketing, well, sucks! No pictures, no virtual tours, poor description, etc. Again real estate selling 101.

6. You don’t know what you’re doing, and are too small minded to actually take formal training to get better because you’ve been in business 28 years or that’s what your broker told you to do. Formal training is not some two-hour course given by your local board, nor is it a two-hour webinar. I’m talking at least eight hours of classroom instruction or distance learning curriculum. Nothing substitutes for a live instructor. If you have a choice, choose the classroom.

5. You didn’t submit an offer you felt is too low. WHAT? Let the lender tell you it’s too low. Get the process going and, hopefully, you can get a hard number from the bank on what they’ll take.

4. You didn’t check this property’s status and the bank forecloses. The short sale department does not communicate with the foreclosure/legal department. You don’t know how many times I’ve called and informed the short sale department about an impending sale date, and they reply, “Oh, let me send them a message to delay the sale.” This doesn’t stop the process but, in my neck of the woods, if you delay a sale, you just bought yourself 60 days. It takes 30 days to get in front of the judge to schedule another sale date, and that date is usually another 30 days out.

3. Poor communication with the buyers/buyers agent and they walk. Mindset is crucial here. You need to prepare the agent and/or buyer for a long wait of at least 90 days before you can go into the sales phase. You also need to let them know that not a whole lot will happen in the first 30 days, and to expect updates every two weeks or sooner if developments occur.

2. You’re disorganized. If you’re the type of person that gets overwhelmed at times (like me) you need to systematize your business. You should have already done this, but this is even more crucial in short sales. I designed an excel spread sheet that holds all my listings. I note whether they are active, pending, short sale, etc. It contains all the info I need in the boxes, and I note every time I call with the date and name of the person. If you want a copy of it, click the hyperlink.

… Drum-roll please … and the number one reason your short will not close is:

1. Your short sale package is incomplete. A bank will not call and say, “Hey, your package was incomplete.” It will go into the round file cabinet. The more info you send them, the better. I always call the lender first and ask for their specifics. I then send them what they want and then some. A complete package should be at least 50 pages. I’ve seen some that are 100 pages. These servicers do not have a clue about your market. The more you send them pertaining to the market value, the better chance you have at getting your package looked at quickly. You come across as a professional that really knows what you are doing – perception is the key here. (Who cares if you just took the short sale class 24 hours ago? You’re a pro. Act like it!)

Good luck and happy short selling.

Noel Padilla, CDPE
Surreal Properties
Miami