The following is not a particularly uncommon sentiment when it comes to real estate investors and the first impressions that they have when they read about or talk with their mentors about short sales:
(source)When I first heard the word “short sale” at the beginning of my real estate career, I mistakenly thought it meant the sale was going to be fast. Actually a short sale means the lender will accept *less* for the home than what is owed in the current mortgage, so they’ll be short the loan payoff.
While it is possible to build great relationships with mortgage lenders within your community and while it is possible to know the best real estate professionals to work with when you want to invest in a short sale property, the reality is simple: when it comes to making a short sale, your relationships are going to be the difference in whether or not the banks are willing to take a loss.
Simply put, no one likes losing money - not even the banks. Short sales necessarily mean that they are not going to be repaid for the difference even though it means not having to foreclose on and take ownership of a property. Therefore, it is essential that you are preparing the best possible offer and that you are making every conceivable effort to negotiate the deal.
When you stay on top of the process - and especially when you have strong relationships with the lenders involved - you’ll find that the short sale process is very rewarding. However, don’t expect to just jump in and have everything go well with no effort; short sales just don’t work that way.
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June 17th, 2008 at 6:53 pm
I think the most important point of your posting is the need for the short sale negotiator to have a “strong relationship with the lenders involved.” When you can pick up the phone and call the direct extension of a loss mitigator whom you have previously worked with you are light years ahead of the hundreds or thousands of short sales submitted that day. At Washington Foreclosure Assistance (WASHFA), we have a database of contacts at every major lending institution that we can call on at a moment’s notice.
June 17th, 2008 at 8:52 pm
It definitely takes effort, patience and persistence to successfully negotiate short sales. I always say that if you have reasonable expectations, you can get the deal done. When they do get done, they are a great deal for all involved (typically).
Jonathan Christopher of Short Sale Way