LOTUS REALTY GROUP

Short sales-Things NOT to do

 (To get a lender to commit to a price)

Here are some troubling trends to watch out for........

 1.    False investor offers-   Some listing agents create contracts or have a buyer write up a contract to send to the seller's lender to commit to a price. Lenders want to know listing agents are not depriving them of achieving the highest sales price. If you are ahead of the curve then the listing sales date will be more than a month away giving you time to "create a listing history". You can increase your chances of a price commitment in your favor by showing the lender this history.

2.      Not informing the bank that the buyer has cancelled to get the bank to commit to a price- Some listing agents do not inform the seller's lender that the buyer has cancelled. This is done order to keep the long process moving forward, or to get the bank to commit to a price. We owe a duty of honesty and fair dealing. There is always going to be a risk of losing the buyer in a short sale transaction, however, here are some prevention tips: a) Have all buyers prequalify through your lender of choice and make sure you get more than just a 5 minute prequel letter.  b) Have buyers sign a commitment letter.  c) Keep lines of communication open on a weekly basis between the buyer and the buyer's agent, informing them of any new breakthroughs. Even if there isn't anything new to report, a weekly update keeps them hopeful.

3.      Advertising that a lender has approved a short-pay price- Some listing agents advertise that the lender has already approved a short sales price to drive in a new buyer once one has fallen out. . As tempting as this may be, DON'T! When the lender approves a price and it's advertised, you could have deprived the lender from higher offers, and there are no guarantees that the lender will approve the same terms with the new buyer.

4.    Not accepting back up contracts, or not sending back up contracts to the lenders- Ask the negotiators what they want to see. Some want one fully executed contract. Some want to see all offers. MOST want to see all offers. Make sure all buyers' agents understand the Lender's procedure and what position their offer is in.