There are some things you can do on every short sale to increase the chance of it getting approved. Check out my personal Top-7 steps to increase your short sale approvals.
NUMBER 7 – Pricing
Set your price at market value, not below. But quickly adjust pricing as needed every 2 weeks until you get an offer. You will find market value quickly and be able to detail to the bank the amount of showing or interest at any price point until you finally generated an offer. Of course consideration on pricing is needed when auction sale dates are pending.
Number 6 – Clean and Organized Short Sale Package
The organization and completeness speak volumes to the negotiator on the other side. Supplying incomplete and disorganized packages screams to inexperience and open you up to more aggressive negotiations from the bank side. Make certain to complete and submit all bank specific documents with the original package. Review it prior making certain all pages needing signatures are signed. Don’t allow your urgency to ignore the basic requirement to review all the documents for completeness.
NUMBER 5 – Photographs
During negotiations we are always fighting value or the banks version of market value. Be prepared from the start with photos of damages and needed repairs. If there is mold photograph it for the bank negotiator. Use Flickr.com or other to provide a URL link to the photo album to the bank’s negotiator if needed.
NUMBER 4 – Remove the lockbox
If your local jurisdiction allows for it remove the lock-box immediately after you have an offer. You do not want the bank’s BPO (Broker Price Opinion) agent accessing the home without your notice. Remember to correct the remarks in the listing to reflect the lack of lock-box access.
NUMBER 3 – Buyer’s Purchase Appraisal
The most solid retort to a bad BPO or bank counter offer is the buyer’s purchase money appraisal. The negotiator will tell you they won’t use it. But they will if you push forward and stand your ground. I have used this more than I can count. And for those out there thinking “the buyer won’t do it or what if it expires due to the length of the short sale and a new one is needed” I say calm down. All kidding aside if you are worth your salt as a Realtor you can easily explain the value. If needed ask the seller to either pay for it or promise via a contract addendum to pay the fee if the short sale does not close. I personally would not reimburse the fee if the buyer backs out prior to a response from the seller’s bank.
NUMBER 2 – Arrive at the BPO
There are arguments that this is not ethical and I do not agree at all. I am not suggesting you arrive with the purpose of misdirection or misinformation to the BPO agent. It is your job to protect your home owner from incompetence of BPO agents from outside the market area of the home or just lack the ability to properly assess the local market. Arrive with data of your time on market, price changes and data on activity or lack of it. If you have comparables or other data supporting your price package it all up. The agent may or may not take it but you should be prepared to supply it.
and NUMBER 1 - Negotiation Support
If you have no experience negotiating short sales do not learn on an unsuspecting home owner. Hire an experience and trusted negotiation company to help you. Ask around your office or family and friends. Interview your options and confirm they are legitimate and can provide proof of their past successes.
