Over the past 12 months we have taken many short sale listings. We've worked hard like other Short Sale Superstar agents to call the banks weekly to get the latest update on the status of the their Short Sale listings, resubmit lost paperwork, stay on hold for hours on end, only to call back because you get disconnected and the list goes on and on.

We patiently wait on the banks to go through their process while staying on top of the files. Then comes the phone call from the Seller..."Oh, my bank has just agreed to do a loan modification. I'm going take the house off the market. Sorry."

A common theme among many of these Sellers is they tried to do a loan modification and were denied. Subsequently they decided to do a Short Sale. And then after all the time and effort we spent trying to get bank approval we get the dreaded phone call. So we need your help.

What qualifying criteria do you use to decide to accept or reject a short sale listing? Or is it just best to put up as many listings on the board as you can and expect to have a high fall out rate?
Do you take the listing while a homeowner is still trying to do a loan modification?

Your input is appreciated.

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Hi Diane, I make sure sellers have the loan mod out of their system before I take the listing. Most of my sellers however are absentee investors so loan mods are not an option anyway. If legal in your area you could also charge an upfront fee. Nothing big. Just enough to help gauge their motivation and offset some of your costs if they cancel the listing.
Diane and Doug - I interview the potential sellers to make sure they are certain they want to do a short sale. If there is any question- I tell them to finish any loan mod request first, then come back to me if that doesn't work. Also, if they are contemplating going directly to a deed-in-lieu 90 days after listing, I won't take the listing. They have to be committed to a short sale.
Bryant & Wendy, thanks for your comments. Do you have a set of pre-qual questions you can share?

Wendy, how often do you follow up with those Sellers who decide to finish the loan mod process so they won't forget you?
Diane, We have complete questions, etc on our course, available on this site! I do not usually re-follow up. If they forget about me, they are not motivated enough IMO.

Diane and Doug Briggs said:
Bryant & Wendy, thanks for your comments. Do you have a set of pre-qual questions you can share?

Wendy, how often do you follow up with those Sellers who decide to finish the loan mod process so they won't forget you?
We have a different method. We tell them that we encourage them to try to get a loan modification up until the time we have a contract with a buyer. We don't have a cancellation penalty. I tell them that after their house goes under contract, however, they have to be committed because they are agreeing to sell their house to a particular buyer who is ending their search to purchase their house. I know this method bears some risk of doing work for nothing...but I just feel like this is the way I personally need to do it. I haven't lost a listing yet to a loan mod, but think I would be okay with it since it would mean a seller being able to stay in their home. I have lost a short sale listing to another agent who made unrealistic promises...I am not okay with that...but that's an entirely different issue. At the same time we heavily prequalify listings before we agree to take them. We don't take every listing.
Daine and Doug,

You should definitely sign up for Wendy and Bryant's class as they go into this in great detail. I typically represent buyers but I do have about 6 short sale listings and a couple are under contract.

I run if some one has a loan with Bank of America and tell them to call Wendy, LOL. I always suggest loan mods first and I have helped many people have success with the Loan Modifications. I successfully completed 3 loan modifications on my personal deals so I have good personal experience with this.

The main issue is cooperation of the seller. Example: Will they let you control the price and handle the negotiations. If not, you may be off to a bad start.
Diane, the best thing is to qualify them first. On a few occasions where I had submitted an offer for my buyer on a listing, the listing agent informed me after 3 months of our offer submission that the seller has decided to take the property off the market to re-try the loan modification again. It is a waste of everyone's time involved when things like this happened.

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