By far, one of the surest signs of a novice short sale investor is the tendency to think of the homeowner as the actual seller. While s/he certainly has a legal right to the property and therefore a “say-so” in whether or not to accept an initial offer for a short sale, when it comes down to the hard and fast fundamentals of the deal, more often than not the actual lender is closer to what most people would consider the actual “seller.”
If this seems counter-intuitive, chances are you are not alone. Many homeowners actually believe they are the “sellers” as well; in fact, it’s not uncommon to hear things like “Send me an offer and I’ll consider it” or “How much will you pay me for the property?”. Of course, that is understandable since most homeowners never really realized they didn’t truly own the property to begin with…the bank did (and still does). However, what is forgivable among distressed homeowners seeking financial relief is unforgivable among short sale investors; you simply must know and understand your seller in order to work a successful transaction.
Take time to consider a few facts; first, the lender is the only party able to make the final determination on whether or not to accept the short sale offer, subject of course to the homeowners’ approval. They can determine what constitutes an acceptable net and even change their mind when it suites them to do so – make it your business to understand what the seller needs and wants to make the deal work …the real decision maker, not the homeowner. For example:
1. Have you used the correct state commission form containing all required disclosures for both buying and selling?
2. If you are using your own purchase and sale contracts/option etc, have you verified each includes all necessary verbiage and disclosures?
3. Do you have appropriate contracts in place with agents specifying the working relationship?
4. Do you have appropriate disclosures, verbiage and properly positioned details of each transaction when buying/selling a property?
5. Does the BPO accurately reflect the property?
6. Have you verified all the “math” so the Net is properly attributed? Don’t make it harder than it needs to be for the seller to approve your deal!
7. Do you understand all legal requirements related to “double closings”? If not…learn them. This is a major cause of confusion and loss of confidence when purchasing short sale investments!
Serious about short sales? Get to know your seller then adopt a tried and true system that works rather than spending all your time talking about investing. Interested in learning more?
Attend a free webinar to learn more about short sales in less time than you ever thought possible.
