6 Biggest Obstacles to Closing Your Short Sales in Under 90 days

01/28/2014 11:58 PM (CST)

short sale approvalOur latest webinar featured two guest panelists, Estera Wilson and Kimberly Anderson, both experienced short sale processors with National Closing Center (NCC). They work with short sales every day and make sure that your deals are closed as quickly and painlessly as possible. We asked our guests to describe problem areas and let real estate agents know how they can help NCC close deals even faster and make the entire process smoother.  

Here’s a summary of our discussion.

1. Document fulfillment stalls the process. According to our guests, short sale approvals can be obtained faster if we spent less time collecting documents. NCC provides document fulfillment services, however, agent cooperation and assistance is still necessary. Distressed homeowners are usually too overwhelmed and somewhat disorganized; they need constant reminders and support which has to come from as many parties as possible, not excluding the Listing Agent. Waiting for a signature or a two page document for weeks is simply unacceptable.

2. The devil’s in the details. We tried to pick one culprit, but, really, there are too many. Gone are the days when lenders and servicers had no clue about short sales or were terribly understaffed. Today, lenders will not accept documents with missing signatures, dates, and gross discrepancies. Although NCC processors check every page of every document, the biggest problem is not the fact that processors must spend so much time on document audit, but the fact that waiting for one signature could take days, sometimes even weeks; so, getting it right from the get-go is the best way to go.

3. Homeowners Association could be a ticking bomb. We understand the importance of unpaid HOA dues. For that reason, one of the first questions on the RealtyProx platform when initiating a new deal is a drop-down asking for an HAO status. Triple check and then check five more times with your Seller if they are, indeed, current on their HOA payments. If not, make sure to get a realistic number of an unpaid balance, not a guestimate. It’s hard enough to have banks pay for 3 months, but it’s really hard to get any sympathy when you come back and ask for 12 months instead.

4. Relocation money is not for everyone. Banks are becoming more aggressive when it comes to enforcing a primary residence rule. If your Seller does not live in the house they’re trying to short sell, they are not eligible for relocation assistance. Lately we’ve noticed that banks sometimes will go to great lengths to prove that the homeowner does not live in the property and take away the relocation money.

5. Banks want fair market value. Price your property right. With property prices rising in many areas across the country, banks are demanding fair market value. NCC orders a BPO on every property that comes into our system; you should do your own BPO or CMA and be brutally honest with yourself and the Seller. 10% below the market value is possible. 40% is a dream that will not come true in today’s market.

6. Buyer: your next deal killer. Qualifying your buyers and working closely with a Selling Agent is a must. NCC consistently obtains approvals from lenders, yet we always end up closing fewer deals than we get approvals on. Although many factors can cause the deal to fall apart even after the approval has been obtained, more often than not a short sale doesn’t close due to a weak buyer. It turns out the buyer didn’t actually qualify for a loan; the buyer doesn’t have enough funds, etc., etc. NCC works as transaction coordinators as much as we can, but you need to qualify your offers and make sure the Selling Agent understands what’s at stake as well.

We hope these tips will help you make the most out of your partnership with NCC and RealtyProx. Every short sale is a teamwork and we won’t be able to do it without you.