The REALTOR®’s Impact on a Successful Short Sale

  • List property at close to or Fair Market Value.  The lender will perform their own property valuation.  If the Contract sales price does not closely match the lender’s property valuation, the lender could counter-offer the contract, reject the contract, or reduce fees and commissions to meet their minimum net.

  • As the listing agent is the first point of contact for a seller, inform the seller that a Platinum Group Services coordinator will be contacting them to assist them with getting their short sale transaction approved with their lender. Inform the seller that time is of the essence in responding to our coordinator’s initial call and throughout the entire process.
  • Assess the condition of the property. If there are any significant repairs that need to be completed, be advised that the seller’s lender will not pay for the cost of such repairs. Therefore, it will be necessary to obtain a cash offer on the property, or the buyer will need to obtain 203k financing so that the transaction can settle without the repairs being made.  This is due to the fact that most times the seller is unable to afford the cost of repairs.
  • Reductions in list price when there has been no offers are viewed favorably by the lenders
  • Time is of the essence at every stage of the short sale transaction.  Please respond to all requests for information and documentation in a timely fashion.
  • It is imperative that all fees on the preliminary HUD 1 that the lender views during the decision making process do not vary significantly from the final HUD 1.  Any and all seller charges (HOA dues, delinquent taxes, condo doc fees, title fees, etc.) should be on the preliminary HUD 1 that the lender views. If additional fees are added to the HUD after the lender has approved the transaction, the lender can either cause significant delays to re-review the HUD or the lender can decrease other fees so that their Net remains the same. Platinum Group Services will order the preliminary HUD once the ratified contract of sale and the settlement Agent’s contact information has been received.
  • It is imperative to keep the buyer engaged during the short sale negotiation. It is important that the buyers are aware that the short sale decision can take on average 60-120 days after the contract of sale is received and the short sale package is submitted to the lender. The short sale addendum to the contract of should state a minimum timeframe of 60 days for third party (lender) approval.  This timeframe should also be verbally communicated to the buyers. The listing Agent is responsible for communicating all critical status updates to the Buyer’s Agent.
  • Lenders will not pay more than a 3% seller concession for buyer’s closing costs. If the seller has an FHA loan, the lender will approve a 1% seller concession or less.
  • The lender will pay customary closing costs on behalf of the seller. This typically does not include delinquent HOA dues or personal liens and judgments.
  • Our negotiators will be negotiating with the lender on the seller’s behalf through a signed Third Party Authorization. It is critical that only ONE Authorization be submitted to the lender. Submitting multiple Authorizations could result in communication errors and could jeopardize the approval of the short sale.
  • Agent commissions paid by the lender on behalf of the seller can vary, generally between 5-6%. However, in some cases, investor requirements or guidelines can reduce the commission even further.
  • Best efforts should be made to settle the transaction within the lender’s approval expiration date.  It can be a lengthy process to obtain an extension from the lender and extensions are not guaranteed. Extensions are sometimes not granted due to the level of delinquency of the loan or investor guidelines.  In addition, some lenders will grant an extension but reduce fees, including commissions, in order to keep their Net equal to what was approved originally.

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