Have you ever been to a racetrack and made a modest wager on a horse? Selecting the right short sale listing to buy can be just like picking the right horse to win a race. The more knowledgeable you are, the better your odds of success.
Studies on racetrack betting suggest that most small bets are for fun, so bets are placed based on the horse’s name, color, etc. Because we don’t actually expect to win, our choice is not tied to the outcome of the race. The serious race fan, however, takes a more scientific approach to improve their odds of success. They start by systematically reviewing all the variables, such as track condition, competition and track record of the horse and jockey before finally selecting their horse.
This same strategy applies to helping your short sale buyers pick the right house. Like the serious race fan, we must…
• Look at current market conditions
• Study the best homes in the field (race)
• Examine their condition (ability)
• Determine fair market value (odds)
• Examine the listing agent (jockey)
Just like having the right jockey/mount in the race increases the odds of winning, working with a short sale listing agent with the skill, knowledge and experience to get the job done will dramatically increase your chances of getting your short sale buyer’s contract across the finish line before the house goes to foreclosure.
Over 90 percent of short sales never get completed because:
• The seller doesn’t meet the lender’s short sale candidate criteria.
• The seller/lender package is incomplete and/or not current.
• The listing agent lacks the ability to overcome a dispute with the bank’s negotiator over fair market value.
When the stakes are high, before you let your buyers fall in love with the wrong house that is listed with an agent who lacks the ability to win the race for your client, you should first ask the listing agent these interview questions:
• Is the home currently under contract?
• How many short sales do you currently have on the market?
• Are any of your short sale listings currently under contract?
• How many short sales have you successfully closed?
• How long does it usually take from start to closing?
• Who is the lender(s)?
• What type of hardship is the seller dealing with?
• Is the seller current on their mortgage payments?
• How many payments are they behind?
• Are the sellers in default?
• Have they received a formal default notification?
• Has a foreclosure/sale date been established?
• Have you done a preliminary title search?
• Are you currently communicating with the lender(s)?
• Have you submitted the short sale lender package?
• Has the lender ordered the BPO/Appraisal?
• Has fair market value been determined?
Instead of a losing day at the races, by choosing the right listing agent, you will greatly increase your short sale buyer’s chance of winning the race.
George “Gee” Dunsten, president of Gee Dunsten Seminars, Inc., has been a real estate agent and broker/owner for almost 40 years. Dunsten has been a senior instructor with the Council of Residential Specialists for more than 20 years. To reach Gee, please email gee@gee-dunsten.com.
