In our world there are two types of Short Sales:
Regular Short Sales (what's regular about a Short Sale?) where the only hurdles to jump are getting a fair market value offer and approval(s) from the Seller's Lender(s) to accept less than the balance of the lien(s) on the property, and
Hail Mary Short Sales - which have the hurdles above plus one or more of the Short Sale "Killers" listed below. Keep in mind that some of these "Short Sale Killers" may exist when taking the listing - automatically classifying it as a Hail Mary Short Sale, while some of these might occur during the Short Sale process.
For Regular Short Sales our list to close rate remains at 100% - and we've closed many dozens of them. That means that every Regular Short Sale we have listed has been put under contract with a Buyer, navigated the Short Sale approval process, and closed escrow.
In subsequent posts we'll be covering Hail Mary Short Sale case studies.
Here is the list of Short Sale Killers:
- File Bankruptcy, which puts an Automatic Stay in place blocking the sale of the property. We have closed a Short Sale when a Seller did this after we had a contract. It wasn't easy - but we made it happen!
- Fail to pay HOA dues, which results in fines, late fees, attorney's fees and a lien on the property - sometimes for several thousands of dollars. If the property goes to foreclosure, the HOA debt follows the previous homeowner - so whatever you do - if you have an HOA - KEEP IT CURRENT!
- Cause other liens to be attached to the property. One of our listings had an IRS Personal Income Tax Lien surface during the Short Sale process. We were able to get the Seller's Lender to pay it! Read more about this in our upcoming Short Sale Case Studies. In another, a Child Support Lien surfaced - even though the Child Support had been paid in full and was up to date. Again - we were successful in getting that lien removed and will discuss in more detail in our Short Sale Case Studies.
- Allow a tenant to extend their lease. A kiss of death. It's difficult enough to get Buyer Agents to bring their Buyers to a tenant occupied property, let alone allow a tenant to remain a roadblock after having told us the tenant would vacate by a certain date!
- Move a tenant into a vacant property. See above - but this move is even worse......
- Fail to respond to requests from your lender for updated documentation in the time frame specified. Yes - we know it seems like forever until your file is in the hands of a negotiator. If you're not prepared to respond with the requested information within 24 hours of their request - GO TO THE BACK OF THE LINE AND START OVER - IF THERE IS TIME BEFORE YOUR TRUSTEE SALE DATE!!
- Fail to advise the listing broker of "problems" with the property. This would include failing to disclose any of the items on this list - either at the time of listing the property - or if they occur during the listing.
- Fail to respond to Buyer offers in a timely manner. This is a Short Sale. You need a Buyer to make it work for you. No - it's not a good idea to take off on a cruise and be out of touch while Buyers are making offers on your property that you need to respond to in order to secure a contract!
- Fail to provide reasonable access for Buyers to view the property. See tenant occupany above - they are entitled to 48 hours notice per the AZ Landlord Tenant Act. If you are living there - an hours notice should be plenty - if you are serious about selling the property.
- Fail to accurately disclose information required by your lender. Here's how this works. Fail to disclose relevant information to your Lender. Your Lender approves the Short Sale.
Your Lender discovers your failure to disclose before close of escrow and cancels their approval. BAD!
Your Lender discovers your failure to disclose after close of escrow and cancels their approval. WORSE!
Be prepared to pay the entire forgiven difference and/or face jail time for mortgage fraud!
If you are considering a Traditional or Short Sale of your home in Phoenix, Scottsdale or any location in Maricopa County Arizona, you owe it to yourself to talk with the BVO Luxury Group @ Keller Williams Arizona Realty to determine whether Tony and Suzanne Marriott are the best real estate Brokers in the Phoenix and Scottsdale metropolitan area to help you with the Successful Sale of your home.
Tony and Suzanne have personally Listed, Sold and Closed more than a hundred Short Sales with the highest list to close rate in the Phoenix Metro Area!
Tony Marriott - Chief Operating Officer - BVO Luxury Group @ Keller Williams Arizona Realty
Suzanne Marriott - Chief Learning Officer - BVO Luxury Group @ Keller Williams Arizona Realty