Challenges in the Short Sale Process

As with everything, Short Sales will present their share of challenges. In Part Four of our series on short sales, Wendy Shaw, of The Russell Shaw Group along with attorney Mark Windsor of Winsor Law Group addresses some of the most common challenges you’ll face.

Challenges in the Short Sale Process:
Held back by the fear of liability? Don’t be. The fear of being sued is the same as with traditional markets. Do everything in your power up front to mitigate loss. Educate yourself. Read everything and anything you can on short sales. A seminar on short sales? Be there. Be proactive and connect with a good attorney. For a nominal fee, attorneys will conduct an initial consult looking at the big picture, and then lay out your client’s best options. To be successful you must find a GOOD attorney – one who is driven by the client’s best interest.

Bad BPO’s are something everyone who is involved in short sales will face at one time or another. The banks want you to escalate - DO NOT unless absolutely necessary. If you have time on your side, this is the easiest and most effective solution. Even better, avoid them in the first place by blocking access to property. You want to head off the agent so that you can have a dialogue. Realistically you may not be able to literally remove the lock box, but you can put this in the MLS listing which means they have to contact you directly to gain access, thus = dialogue. When you get the dialogue going, remember that empathy and respect go a long way in making things happen. Agents are often underappreciated – don’t do the same.

When it comes to strategic default you want to take a two-pronged approach –front end and backend. Let them know up front it’s going to be a difficult process and they have to commit. Address the fact that there are 3 parties involved – the servicer, the investor and the mortgage insurance company. And of course follow up at the end of the process.