Short Sale Help – The Devastating Effect on Buyers and Sellers.

The problem with a short sale is the devastating and emotional effect that this lengthy process can have on both Buyers that are trying to buy a house and Sellers that are trying to sell a house that is going through the Short Sale process.

As a Realtor, I have always tried to do the best job I can for my clients.  This is becoming more and more difficult as the number of Short Sales in our Salt Lake City Real Estate market continue to rise.

I used to try and encourage my clients to avoid homes that are going through the Short Sale process.  But today there are 16,379 homes for sale and 17% of those (2,796) are Short Sales.

It usually takes 4-7 months after a Real Estate agent first requests Short Sale information from the Mortgage Company until the day the transaction actually closes.  I warn my buyers about this lengthy process and how frustrating and emotionally draining it is.  But no one can prepare them for how truly aggravating it is until they personal experience the process themselves.

Here is an example of how the time line for a Short Sale may look.
Week 1:  A Seller requests Short Sale Help.  A Real Estate Agent meets with the Seller to establish a list price based on a “guess” as to approximately how much the Mortgage Company would be willing to accept.
Week 2:  The Mortgage Company sends out a Short Sale Packet
Week 3:  The Seller didn’t receive the packet and requests it again.
Week 4:  The Seller begins to fill out the Short Sale Packet to supply the mortgage company with the complete information they requested.
Week 5: A real estate purchase contract is received from a buyer to purchase the property.  The Seller accepts it “contingent on the 3rd party approval”.
Week 6: The short sale package is prepared with the offer and submitted to the lender
Week 7:  The lender processes the package
Week 8: The lender orders a broker’s price opinion to determine what amount they are willing to accept as a sales price on the property.
The buyers want to know why we haven’t heard anything.
Week 9: The lender says they can’t find the package and asks the buyer to resubmit the whole Short Sale package.  (This is not a joke.)
Week 10: The BPO is submitted to the lender
Other offers are submitted by numerous other buyers.
Week 11:  The BPO is evaluated by the lender
Week 12: The lender says they can’t find the package and asks the buyer to resubmit the whole Short Sale package
It’s been 3 months.  The buyers are crying.  It’s too nerve wracking.  They have requested extensions at their apartment complex again.  Why can’t you tell us what’s going on? Give them an ultimatum.  We are going to walk away from this deal.
Week 13:  Week 14: A “loss Mitigation Specialist” is assigned and the whole Short sale package is reviewed.
Week 15: The lender suggests that the Realtor ask all buyers that have submitted offers to send in their “final and best offer price”
Week 16: The new offers are presented to the mortgage company
It’s been 4 months.  The buyers are crying.  The wife can’t sleep.  She is losing weight and can’t eat. It’s too nerve wracking.  The buyers want the Realtors to give the mortgage company an ultimatum.  Either they give us an answer or we walk.
They have requested extensions at their apartment complex again.  Why can’t you tell us what’s going on?
Week 17: The package is once again reviewed by the loss mitigation specialist.
Week 18: The mortgage company proposes a counter offer to the “best” offer submitted so far.
Week 19: Negotiations continue until an agreement is reached and the Mortgage Company sends a written approval.
Aaaah, finally.  Written approval.  It’s been 5 months.  The buyers are excited about finally being able to close on the house. They have gone from an emotional low to an emotional high.
Week 20:  The buyers begin their due diligence and the buyer’s mortgage company orders the appraisal.
Week 21: The appraisal comes back with Repair issues.
Week 22: Negotiations begin with the Mortgage Company to have them pay for the FHA required repairs.  The Mortgage Company refuses.
Week 23: Negotiations begin between buyer and Seller to see who will pay for the FHA required appraisal repairs.
Week 24: Week 25: The buyers loan package is submitted to underwriting.
Week 26: An updated title report is run on the property and new liens appear on the Title Report.  (IRS tax lien, mechanics liens:
Week 27:  Week 28: The Real Estate agent and the Sellers try to negotiate payoffs on the liens to clear the Title
Why can’t we close?  We have performed.  Why can’t you make the Mortgage Company pay for the new liens?  The buyers have gone back to an emotional low.
Week 29:  Negotiations are not successful and everyone is pointing fingers at the Title Company, at the Real Estate Agents, at the mortgage company at anyone remotely involved in the transaction to assign blame to someone for the frustrating experience in buying a home.
Week 30:  If all goes well, the contract goes to closing.  7 months after the process began.

The buyers tell everyone what a terrible experience they had buying a house.

Now can you see why I try to discourage my buyers from putting themselves through this?

What’s the answer?  Short Sale Help.  We can cut weeks even months off the Short Sale process. 
Whether you are a Buyer or a Seller you need to make sure you are working with Real Estate agent that has the experience and knowledge to keep you safe through and shorten the length of time it takes to complete this process.

If you are a Seller, you can get Short Sale Help here.   If you are a buyer, contact one of our Experienced Buyer’s Agents to help you through this process.