3 Keys to Successful Short Sales

The success of short sales can be determined before the property comes onto the market.

We continually see nightmare scenario’s with sellers attempting to sell properties through short sales, where properties are listed for sale that have not been approved by the lender. There are properties on the market that will not qualify as a short sale, and sellers with assets that will not qualify them as a short sale seller.


1. The Customer Should Engage an Attorney.

The short sale process is extremely challenging for all parties involved in the transaction. An attorney should be engaged prior to a customer buying a property or the seller offering a property for sale. Many of the sellers are facing financial challenges and do not have the extra funds for an attorney, but not engaging an attorney could become far more costly.

The lenders are slow to communicate and are holding contracts for extended periods of time, hoping for better offers. The result is a very slow approval process where both the sellers and buyers become frustrated with the process and are holding the real estate professionals accountable for the delays.

Both the buyer and seller need the expertise of an attorney to negotiate with the lender and attempt to speed the process up and furnish legal advice.

The real estate professional’s role is to facilitate the transaction. The attorney’s role is legal expertise and negotiating with the lender.


2. Seller/Attorney should Contact the Lender.

Once the seller starts to consider the possibility of the short sale the buyer needs to contact the lender.

Request the required paperwork to determine if the seller and the property will qualify for a short sale.

The role of the attorney becomes critical at this point to negotiate with the lender on the behalf of the seller. The attorney can either work with the lender to sell the property as a short sale, or renegotiate the terms and conditions of the mortgage and have the sellers retain ownership.

3. Determine if the Property can be Successfully Sold as a Short Sale

Many short sales issues can be overcome initially by an attorney representing the customers and negotiating with the lenders. In working with buyers, determine that the listed property is qualified to be sold as a short sale. In working with sellers, determine prior to marketing the property that the lender has approved the property for a short sale.