The wait. In this stage of the short sale process, there is much that you try to get done and then there is what you are able to get done. This is a continuation of Anatomy of a Short Sale: Part I.
All the critical documents would have been collected though you may have to collect some again depending on the timing of an incoming offer. If significant time has elapsed, then more recent paycheck stubs, bank statements and the like would need to be recollected.
Early on, the short sale package can be put together though not finalized until an offer is received. Once the offer is received, then the short sale package would be sent right to the lender(s) for processing.
It is a good idea to contact the bank at this point. An authorization to access lender information on the client’s behalf would allow the Realtor to do this. The Realtor can then discuss with the lender(s) the specifics on the loan. It is a good idea for the home owner to contact the lender as well to inform them of their desire to short sell and their hope that the lender(s) will approve the short sale. This shows some level of communication and attempted cooperation with the lender(s). Now, the lender(s) may offer plans to help the homeowner to stay in the property. This conversation assumes that the homeowner can’t stay in the property in spite of lender programs that may help to do exactly that.
The reality is that the lender(s) may tell you that they will not discuss or process any short sale paperwork until there is an accompanying offer. However, if the lender is open to discussion on any points of the short sale early on in the process, then it is very wise to take care of it. Circumstances vary with each lender and so contacting them early on can pay dividends.
As for marketing the property to get an offer, time is critical. Some lenders will look for the marketing to show an effort to obtain the highest possible price for the property. As such, showing the effort to do so needs to be balanced with the time constraints of the individual short sale. If the Trustee’s Sale is imminent, then there is not time to market to obtain the highest possible value and more aggressive pricing should be considered.
No matter what the pricing strategy is, the pricing must encompass a steady repositioning over time. So, depending on the overall market conditions, pricing should be adjusted downward based on traffic and comparable activity. For the Phoenix real estate market, price reductions might occur initially every 3-4 weeks to then every 2 1/2 weeks. Pricing should be reduced by significant increments rather than small increments.
A special note, short sales, especially in foreclosure-saturated markets (ex. Buckeye, Surprise, Maricopa, Queen Creek, El Mirage, etc.) , sell on price. It’s the price. The property has to compete with a lot of other properties and price is the predominant factor that has to be manipulated to get the offer. The other marketing aspects of the home are important, but price is first. Condition of the home runs second as the home has to be presentable once the price has attracted buyers.
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