One of a Realtor’s biggest challenges is trying to negotiate his or her own short-sales. Short-sales are excruciatingly time consuming. The Realtor who does negotiate his/her own short-sales can not acquire nearly as many listings. The amount of time spent negotiating the files literally prevents the Realtor from being able to spend the time he/she needs to on acquiring new business. The result of this is that the Realtor gets bogged down with short-sale processing and does not earn the income that he should. A Realtor does not get paid anything additional to negotiate a short-sale. Yet, it takes an enormous amount of time.
I’m sure you’re thinking: There must be a better way. There is! Your-Home-Bailout will negotiate the entire short-sale for you. Best of all, we do not take a penny of your commission. Most of our competitors take up to 30% of your real estate commission to negotiate your file. We get paid on the buyer’s side of the transaction, which means that 100% of your commission stays in your pocket. Our services are entirely free to you!
Contact Us Now to to stop calling banks and start building the business you set out to create!
What we do, Start to Finish
In this segment I will provide a brief overview of what our service consists of. I will simultaneously provide an overview of the entire short sale process from start to finish. Let’s get started! The very first thing that we do on a short-sale file is to build the complete, formal short-sale package and proof of why the file is qualified. As you know, the successful negotiation of a short-sale is so much deeper than just presenting an offer. The seller must also qualify. If the homeowner doesn’t qualify the entire transaction will implode (even if the offer is phenomenal).
We perform a detailed analysis of the homeowner’s financial situation and ascertain if they are likely to qualify for a short-sale transaction. Many folks do not. We want to know this on the front end so that we don’t waste two months of the buyers time…only to find out that the seller is unqualified for a short-sale.
After we have determined that the seller is a strong applicant for a short-sale, we go about building the formal short-sale proof package. During this presentation of financials, real estate market data, and other factors — we effectively “build a case” for this transaction. A lender will only do a short-sale if their “net” is higher as compared to foreclosure. We build a case that demonstrates that the lender’s net will be higher — and that the short-sale is their best option to recover a maximum net. On average, it takes between 5.5 and 7.5 hours of time to build our package. As you know, a critical error that many folks make is this: they only send what the lender asks for…and nothing more. The lender only requests a very basic set of financials documents. To the un-trained mind, this list of documents sounds very complete. It is not complete at all. Much more information is needed for the loss mitigation rep to effectively make a decision.
On the typical file, the lender rep is forced to plunder through an un-organized set of documents and piece together the “analysis” of the file on their own. With file volume being what it is today…it is much more difficult to get the rep’s attention with a disorganized package. They do not have enough time in their day to spend hours with the package, and “piece together” the analysis on their own. Instead, we spoon-feed the analysis to them — in bite sized pieces that are quickly understood. This is a time-consuming process on our end, but the reason it’s so worthwhile is because it allows the rep to “understand” our file much more quickly. This results in the reps paying attention to our requests more quickly. A lot of folks who submit their own files complain about getting “ignored” by the lender reps. One of the reasons for this is because they are unaware of what to send to the lender, so that they are able to respond quickly. There are too many files to work (and not enough time to work them – because the foreclosure process is fast in California). So the reps must be selective, and choose which files to work. The power of our package makes it very easy to get their attention and get them to work our files over other ones.
After we have built the entire package and grabbed their attention the follow-up process begins. Many times the package must be sent 4 to 5 times to finally get the package logged into the system. Getting the package logged is step one. Step two is getting the package assigned to an actual work-out negotiator. Until the file is assigned to an actual negotiator it is not being “actively worked”. It is just sort-of sitting in limbo land until it does get assigned. We follow-up until the file has been assigned to an individual negotiator.
Once the file is assigned, we have an opening discussion with the rep – and the BPO (appraisal) is ordered. After the BPO has been ordered our office will receive a call from the agent performing the BPO (typically within 48 hours). If we do not receive a call from the agent, we follow-up with the lender again to have them re-order the BPO.
After the BPO has been performed it goes from the agent’s hands…into the lender’s office…gets logged in their system…and finally makes its way to the rep’s desk. It takes between 5 to 15 days for this to happen.
Once the rep can view the BPO, they are able to review the file and start making some decisions. The review process can take several weeks. The volume that the lenders are dealing with slows down the process. I was on the phone with a rep yesterday who has 412 files on his desk. If this rep can get 20 files reviewed per day (in addition to all his other tasks) it will take 20 days for the file to get reviewed. Most reps are required to work their files in order…from oldest to newest. This creates a “cue”, where some waiting is involved…until the file has reached it’s turn in the review order. We continue to follow-up with the rep to ensure that our file is reviewed as quickly as possible.
After their review comes the negotiation portion of the process. During which we determine what type of offer the lender will accept, and what type they will not accept. As you can imagine, sometimes the offer that’s on the table is not acceptable to the lender. Sometimes a counter-offer will be issued to the buyer, and other times a new BPO (appraisal) needs to be completed (if the initial value was inaccurate).
After we have reached an acceptable value, the rep will submit the full file for management review. Very seldom does the rep have the authority to make decisions on his own. The file must be reviewed by management to gain final approval. This portion of the process takes 1 – 2 weeks to complete.
Many loans are not “bank owed”. They are owned by a different “investor”. The investor owns the paper and is the ultimate decision maker on the file. If the file is investor owned (instead of bank owned) many times the file must now be submitted for investor approval. Who the investor is (and what their file volume is) determines the length of this portion of the process. Investor review typically takes between 1 to 5 weeks to complete.
As you can tell, the short-sale process is a very lengthy one. It contains many different pieces. It takes a lot of attention for someone to manage this process properly, and ensure that the file continues moving along successfully. We manage this entire process from start to finish, and work to solve all of the issues that pop up along the way.
Hopefully this overview of the process has helped you understand the many different components that are contained in the approval of a short-sale. A common question that our buyers ask is: How long will it take to receive feedback on my offer?
From start to finish it can easily take 90 days to receive feedback on an offer (if not longer). This is why it’s so important for the buyer to pick one home that he/she likes and stick with it. There are a lot of folks running around and putting in “low ball” offers on multiple properties. The lender only wants to work with the highest and best offer. All of the other offers go in the trash. So it’s completely useless to have 5 low-ball offers active. None of them will be accepted. The lender works with one offer only…the highest and best. This is why the best course of action is for the buyer to make a strong offer on one property – and stick with it.
Some buyers need to be in a home in 30 days. This buyer shouldn’t be bidding on a short-sale. This buyer should bid on a home owned by an individual seller – where bank cooperation isn’t needed. When a buyer can wait 60-90 days to get into the home, then he should be bidding on a short-sale. Because the short-sale is going to get him the best price value of all.
Once the file has received final approval from the investor the loan is fully approved for a short-sale. Keep in mind that all liens on a property must be negotiated (not just the 1st mortgage). Most properties have more than 1 lien. Our firm negotiates every lien…regardless of how many there are. 2nd mortgages are very common…including less common liens such as judgments, state tax liens and IRS liens. After the negotiation of all liens has been complete the file has been fully approved. The buyer can now roll forward with his inspections and appraisal, and the rest of the transaction is just like any other real estate transaction.
The short-sale process from start to finish is a very work intensive, time consuming process. But that’s why we’re in business. So that the buyer does not have to be subjected to all of this work himself. All he has to do is sit back and wait. We love what we do, and this shows to our clients. We hope that this overview of the short-sale process has been beneficial to you. We look forward to working with you on your short-sale!
