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Permalink Reply by Eric Mieles on June 1, 2011 at 2:38pm

Hello Suzanne. Glad to see you searching for more information to increase your business. Kudos to you for recognizing opportunity and jumping right in. As for your question there are a couple of things to go over.

First, lenders will require some form of documentation to initiate a short sale request. I say that because when you speak of a "complete package" you’re referring to all the normal short sale requested documentation we have all been taught to include in a full package. However several lenders have initiated certain Pre Approval Programs that try to take a little more initiative by pre approving a certain list price or a set of guidelines prior to an offer being received or even when the offer comes in. For example:

Wachovia has a fast track program. You speak with an area manager to see if your property qualifies under the program. They say yes and you begin marketing the home saying 'Pre Approved short sale on Wachovia's fast track program" Once an offer is received all you send in is:

-Fast track form

-Hud

-Purchase agreement

-Authorization letter.

That's it. You get either a counter right away or an approval.

or FHA has what's called a PFS Program that allows you to get a form HUD 90045 and it has a set of guidelines such as List price, deadline to get a contract, net amount they want to receive and a certain relocation assistance amount if completed by certain date.

HAFA can be initiated with or without a purchase agreement if your borrower is eligible.

So Suzanne these are certain programs that you may see agents using to get short sales done with maybe different tactics of different documents rather than your standard package.

You will find an incredible amount of information and resources here to navigate your short sale to a successful closing. I would suggest you read the lender specific sites and take notes on some of the key programs, contacts and ways other agents are getting their deals done. Get as much information as you can when taking a short sale listing.

Know which lenders are involved, who owns the loan, GSE Non GSE, and have a great relationship with a local title company that can do a prelim title search to reveal certain things you may have not known about. The earlier and quicker you get all information out on the table the better off you will be.

Don't forget your HOA's and learning how to structure your HUDS. Sorry to go on and on just wanted to share maybe some information that may help. Good luck!

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Permalink Reply by Suzanne Martin on June 1, 2011 at 3:24pm

Thank you Harry.  I appreciate your opinion and your time!  Very helpful.  Suzanne

Harry Clay said:

This is strictly my opinion, Suzanne.

But I believe you have a lot better chance of success by actively marketing your listing down from a FMV starting point, or even a little above (to start), & searching for the "sweet spot" (by sytematically dropping the price weekly)...

...& then submitting your complete package with a solid offer from a motivated buyer...

...than you do with approaching the lender first for a HAFA approved short sale.

In my experience, they're going to shoot you an "Approved" price that is well above what the market will pay, & doom you to failure.

I establish an MLS Price History, & I tell the lender this is what the house is worth, & then do my utmost to convince them that they better take the deal @ hand, or else be prepared to be the proud owner of another unsold, abandoned REO.

You're the short sale listing agent. You need to lead the dance.

 

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Permalink Reply by Suzanne Martin on June 1, 2011 at 3:27pm

Hi Eric....thank you for all the great information. My next step is learning who are the lenders on the fast track  --- I know BofA is not.  I have two going and equator keeps erasing all of the files and so I have to start all over again.  They don't seem to know why at B of A.  Do you have any experience in dealing with B of A?  Thanks again.Suzanne
Eric Mieles said:

Hello Suzanne. Glad to see you searching for more information to increase your business. Kudos to you for recognizing opportunity and jumping right in. As for your question there are a couple of things to go over.

First, lenders will require some form of documentation to initiate a short sale request. I say that because when you speak of a "complete package" you’re referring to all the normal short sale requested documentation we have all been taught to include in a full package. However several lenders have initiated certain Pre Approval Programs that try to take a little more initiative by pre approving a certain list price or a set of guidelines prior to an offer being received or even when the offer comes in. For example:

Wachovia has a fast track program. You speak with an area manager to see if your property qualifies under the program. They say yes and you begin marketing the home saying 'Pre Approved short sale on Wachovia's fast track program" Once an offer is received all you send in is:

-Fast track form

-Hud

-Purchase agreement

-Authorization letter.

That's it. You get either a counter right away or an approval.

or FHA has what's called a PFS Program that allows you to get a form HUD 90045 and it has a set of guidelines such as List price, deadline to get a contract, net amount they want to receive and a certain relocation assistance amount if completed by certain date.

HAFA can be initiated with or without a purchase agreement if your borrower is eligible.

So Suzanne these are certain programs that you may see agents using to get short sales done with maybe different tactics of different documents rather than your standard package.

You will find an incredible amount of information and resources here to navigate your short sale to a successful closing. I would suggest you read the lender specific sites and take notes on some of the key programs, contacts and ways other agents are getting their deals done. Get as much information as you can when taking a short sale listing.

Know which lenders are involved, who owns the loan, GSE Non GSE, and have a great relationship with a local title company that can do a prelim title search to reveal certain things you may have not known about. The earlier and quicker you get all information out on the table the better off you will be.

Don't forget your HOA's and learning how to structure your HUDS. Sorry to go on and on just wanted to share maybe some information that may help. Good luck!

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Permalink Reply by Eric Mieles on June 1, 2011 at 4:48pm

Your welcome Suzanne. I just want to be clear though. When I was mentioning the fast track program for Wachovia and the PFS and HAFA I was just mentioning different programs and things you may have seen other agents doing or using when you were asking about pre approvals. However I am in agreement with Harry.

That is a great system he uses. The speed at which you close your short sales has many variables and it will take time, skill, desire and knowledge to utilize all the tools you have in order to successfully process, negotiate and close them in a timely fashion.

All things that you possess being that your here learning and getting better.

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Permalink Reply by Jeff Payne on June 2, 2011 at 2:53am

Suzanne, those 2 guys have given you some great advice, they know their stuff when it comes to short sales for sure.  Not much I can add except for the fact that YES You can get short sales done in 60 to 70 days, some even sooner than that.  I recently got a HAFA approval in 28 days.  Follow the advice of those that know how to do these, be detailed and never say never and dont take NO for an answer.  If you hear NO from a bank employee, you are not talking to the right person or you are talking to someone who is not allowed to say YES

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Permalink Reply by Tara Polley on June 3, 2011 at 8:34am

Hi Suzanne,

HAFA short sales are designed to be a PRE APPROVED short sale. All of the homework (hardship letter, financials, listing agreement etc) is done up front, and is submitted prior to placing the home on the market. The servicer will do a BPO and advise you on what your list price should be, and they are required to approve any offer you receive in that price range within 10 days of you submitting it. You will be allowed 120 days to market the property and recieve an offer. They are required to approve a 6% commission if your listing agreement calls for it, and they will offer junior lien holders up to $6000 to incentivise them to agree to participate. Closing should take place between 30-45 days of approval of the offer. This is how agents are getting their transactions completed quickly.

 

Please note that the borrower must qualify to participate in this program, and you should educate yourself about what the requirements are so you don't waste your time or your homeowner's time pursuing a HAFA short sale if they are not qualified. Namely, they must qualify under the HAMP guidelines, meaning their mortgage should be more than 31% of their Gross Monthly Income, and their investor must be participating in MHA.

Hope that helps clarify.

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Permalink Reply by Stephen Thomsen on June 5, 2011 at 5:37am

Keep in mind, ALL PARTIES must agree to the sale. If there is MI or if you have a second that does not participate in HAFA it can go to "traditional" short sale. If the seller is required to come in with money for MI, etc. they are not eligible for the "seller relocation funds". Fannie is backed up and can take longer in some cases to establish a price. It is important to remember HAFA is a set of guidelines, NOT laws. Base your sale price on recent closed comps, and back them up with your offer.

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Permalink Reply by The Negotiator on June 6, 2011 at 4:02am

RUN!!!!!!!!!!!!!!!!!

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Permalink Reply by Trina Gonzales on June 7, 2011 at 6:47pm

Welcome Suzanne;

 

I applaud you for joining this community to get great "best practice" advice.  These folks know their stuff because they're in the trenches.  I can only add... be tenacious, be detailed in your presentation to the servicer and communicate with all parties on a regular basis.  It can get done and it will.  Trial and error unfortunately have been the bulk of training for me.  I have only been licensed for 5 years so this market is "normal" for me.  It's very challenging but anything worth it is...

 

Go get 'em tiger!

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