Art Lee

The timeline for the short sale process can be extremely long and will test your patience. Once a file is submitted to the lender, it is processed according to the bank timeline. While you may be limited in your ability to try and speed up the process, you do have the ability to avoid items or circumstances that cause delays in processing time.

For all of our short sale transactions, we log the date and details of every conversation, fax submission, and commitments made. Keeping meticulous records show the level of professionalism that you bring, and inspire the trust and cooperation with your bank representative.

Too many times, we approach the phone call with a request for something we want from the bank representative: assignment to a negotiator, escalation to management, speeding up the processing time, better terms on the approval letter. Because the short sales process takes a long time, we tend to be very results driven, and focus on achieving milestones as fast as possible so that we don't lose the buyers in a short sale.

One of the responsibilities of a listing real estate agent is to evaluate the strength of the offer. In a retail transaction, this would involve examining the financial details of the offer: the amount of the earnest money deposit, the amount of down payment, the credit score and potential for qualifying for the loan needed to finance the purchase. A secondary consideration may be the ability to close quickly.

Before every single call, remind yourself of your intention to set a tone of collaboration. It is too easy to jump right into a conversation, where it becomes a simple mechanical exchange of information. Of the hundreds of calls that a lender's representative takes in a week.

When reviewing a short sale application, the bank representative will only look for a few things on the purchase contract: the purchase price, a short sale addendum, for all signatures and initials, and a date indicating the validity of the purchase contract. As long as these items exist, the purchase contract will be marked as received, and they will move on to analyzing the other pieces of documentation.

As a realtor, you have a scope of services that you can provide to a seller: listing the property, marketing and showing the home, negotiating with buyers, filling out the purchase contract. However, short sales transactions have tax, credit, and legal consequences. A good place to start would be to have your seller look for answers from trusted sources, such as the HUD web site: www.hud.gov. This website has general information about the consequences of a short sale.

The short sale process is lengthy, and each day that goes by gives a potential buyer an opportunity to back out of the transaction, to look for another property, to have their personal circumstances change affecting their ability to qualify for a loan. When the buyer walks, you may see weeks or months of effort being potentially wasted. If there is a scheduled trustee sale, you are now faced with a difficult situation of finding another buyer before the home is foreclosed.

In this article we wanted to share some insight into how the HAFA program is being processed by Saxon. When we spoke with Saxon's Short Sale Department, it was clear that the process is still very new to them as they have yet to work through a short sale to closing. What we did gather from Saxon is the current process with closing HAFA transactions. We wouldn't be surprised if Saxon makes changes in the future to improve HAFA transactions.

A couple of months ago, I wrote the blog "Bankruptcy, Foreclosure, or Short Sale? What happens to my Credit Score?" This month, I'd like to give an update on Short Sales and Credit Scores.