A short sale can make the difference between foreclosure and a brighter future for the homeowner, but the short sale process can be laborious. Completing a successful short sale demands a great deal of time and attention from the realtor. Proper planning is everything, and the first meeting at the seller’s home is the best opportunity to complete most of the ‘heavy lifting’ so that the rest of the short sale goes smoothly. Here are the key issues to cover during your time together at the kitchen table:
Gather all documentation. After your client has agreed to do a short sale, you should make sure to get all of the required documents completed and signed at the initial meeting. Obtaining documents at a later date can be difficult, for various reasons. Often, a client is in emotional turmoil because of the short sale and may be unmotivated to look for documents you need. In other instances, the client may be packing for the move and has packed their files, or the client has already relocated.
Putting together complete documentation at the initial meeting is also important because many lenders will ask for documents at various stages throughout the short sale process. The bank may surprise you with a request for updated financials or an unusual document that the investor wants. The bank will provide a deadline – often only 72 hours – within which you and the seller must produce the documents. If you have compiled these documents up front, you can send them to the bank quickly. If you miss the deadline, the bank could cancel the short sale.
Know your client’s lenders. If your client has two mortgages, make sure you get paperwork for both banks prior to meeting at the client’s home. Visit the website of each bank and look for the Short Sale section to determine what paperwork the lender will require. Print out all documents and bring them with you to the meeting at the client’s home, so you have everything you need.
Build a library of forms. As you work short sales over a longer period, you can save time with each client by compiling a library of the forms that lenders require. Some forms will be common to all banks, while others are exclusive to specific lenders. Even if a form is used by only one lender, we recommend creating a generic version of the form and adding it to your collection. For each short sale you do in the future, have the client sign every document in your library of short sale forms, regardless of whether the form is required by the client’s lender. Although you are having the client sign a lot of forms that will never be used, you’re better off having too many documents on file than having to chase down the client later. By keeping every form you could possibly need, you can save lots of time when you get a surprise request from the bank.
With a little advanced planning and preparation, you can navigate the details of the short sale process more smoothly and increase your track record of success. Completing a short sale takes time and patience, but a successful transaction can make a world of difference for your client, which will benefit your business over the long term.