Avoiding the Dirty Dozen Barriers to Short Sale Success

Here's great blog post on KCM by BRANDON BRITTINGHAM


Short sales often take three times longer than a traditional transaction and sometimes never close at all.  By hiring an agent who knows to avoid these twelve barriers, the process can be less stressful.

1.) Poor short sale candidate

Establish objective criteria
Conduct an extensive interview with homeowner
Ascertain seller is motivated and cooperative
2.) Agent lacks familiarity with the lender’s requirements and procedures to complete the short sale

Harvest and maintain lender and investor guidelines
Secure individual forms required for each lender/servicer
3.) Title exam not obtained in the beginning

Identifies individuals on deed and mortgages
Determines all lien holders
4.) Incomplete package submitted to the lender/servicer

Focus on the quality of the package at time of submission
Detail orientation is critical
All docs completely executed
Complete package allows process to flow faster
5.) Short sale not begun prior to receiving a contract to purchase

Adds 30 to 60 additional days
Lender never looks at buyer contract until seller candidate is approved and market value has been determined
6.) Complete package not maintained throughout the short sale process

Must keep all required homeowner financial information current and forwarded to the servicer every 30 days
7.) Lack of communication with the lender

Most negotiators overwhelmed by the number of individual cases they are working on
Misunderstandings, loss of documents, and/or lack of familiarity with files are very common
Agent must continue to follow-up with the servicer twice a week to reduce unnecessary delays
8.) Poor record keeping /documentation by agent

High probability of changes in processing personnel
New person often lacks familiarity with case.
Has to rely on the quality of notes in the file
Information is often lost or missing
Agent’s role is to help fill in the gaps
9.) Professional relationship with the negotiator never established

Stressful environment
Lots of frustration
Lack of respect and trust are common
Begins with building rapport
Can be a big game changer
10.) Failure to meet BPO/Appraiser at the listing

Without a detailed inspection of the property inside and outside the value will be distorted
Meeting BPO at property provides great opportunity to share information that  might not otherwise be  discovered
11.) Fair market value dispute

Common in most markets
Negotiators lack current relevant information on most markets
Forced to make decisions based on the data provided by BPO and information in the lender package
Agent must be willing to provide additional current, detailed, relevant information (ie. local market, economy, demographics, and property condition) that can have an effect on value.

 12.) Failure to “escalate” to higher authority when communication breaks down

Escalation is part of the short sale process
Escalating to a supervisor can be the key to moving forward
Upper levels of every lender’s short sale department are working toward one goal– avoiding another foreclosure
Avoiding these dozen pitfalls will increase your odds of success while reducing everyone’s time and stress.



The Iron Eagle Realty Team's mission is to assist you, our client, in the sale and acquisition of real estate properties in the state of Idaho, specifically the Boise Idaho Real Estate Market. Whether you are buying or selling a home, whether it is a foreclosure, short sale or equity property, we handle our customers and clients with empathy and honest truths so they can make informed decisions as they advance in the process of buying and selling real estate that meet specific needs.

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Regards, Michael Hon, REALTOR®CEO, The Iron Eagle Realty Team
Associate Broker, Silvercreek Realty Group
Certified Short Sale Specialist®
Investment Property Consultant
Direct: 208.919.0458 Office: 208.939.9033 Fax: 208.514.1422
www.IronEagleRE.com Michael.Hon@IronEagleRE.com