Written by our office's transaction coordinator and short sale processor, Jacklyn:
I have been working in short sales for listing agents for a few years now. During this time, I have learned the ins and outs of short sales. Some key elements I have learned about short sales are how to reduce the time a short sale takes and the issues that can be addressed upfront that will assist in getting the short sale approved.
When I first started down this path, short sales typically took 6 to 9 months once an offer was submitted to the short sale lender. Believe it or not, the lenders are improving by shortening those time frames, and also the agents are learning ways to make the process run more smoothly. This reduces the time frame vastly. These days, we can get short sales approved and closed within 3 or 4 months of receiving an offer on the property.
One way to make sure the short sale closes in an appropriate timeframe is to keep the buyer from 'walking away' from the purchase before we get an approval letter. Making sure the buyer stays in the game is essential to cutting the time a short sale will take, and it's a big part of my job here at Kara Homes. Keeping the buyer informed on the process as much as possible ensures them that we're working hard on the file daily and that they're not just wasting their time. In our office, we provide regular and detailed updates to the buyer's side, so they always know what's going on and never feel left out of the loop. Unfortunately, that doesn't mean that we never lose buyers; they still get impatient from time to time and walk away but like I said, educating them is imperative. As long as agents are being up front with their buyers about the expected time the short sale will take and they are getting regular, substantial updates, the buyer will usually wait as long as needed.
Another process we use to help reduce the length a short sale takes is requesting the homeowner (seller) to stay current on their HOA fees or Condo Association fees, if possible. At times we have clients who continue paying these fees even though they haven't paid a mortgage payment in months. Many times, after a few of these association fees have been missed, the association retains an attorney to collect the amount due. Once an attorney is involved, the amount of negotiation required on our part is often doubled or tripled, which will only prolong the short sale process. Once the HOA retains an attorney, the amount tha tis due can double because now there are added attorney's fees. We negotiate these fees for the sellers regularly, and they rarely, if ever, stop us from obtaining approval and getting the home sold, but most people would rather it happen much more quickly. An additional detractor of not paying your HOA or Condo Association dues is that this may force the association to cust costs, which often causes the community and properties less attractive, thus reducing property values and sometimes making it difficult to attract potential buyers.
Overall, I would say that it's primarily because of my experience that I have learned how to counteract these and other short sale hurdles. It's not always easy but when you can learn to avoid the biggest problems before they are a problem, then you have more time to tackle smaller issues as they present themselves. That's one of the things that make the Kara Homes short sale process second to none!
- Jacklyn, Kara Homes & Associates