Most listing agents have their work cut out for them. They've got to handle offers and juggle various contingencies and contracts as well as marketing. It definitely is a busy job-- and yet a short sale listing agent has even more work to do.
What does a short sale listing agent do?
While a typical home sale involves three parties: the buyer, the seller, and the buyer's lender, a short sale requires the seller's lender as well. The reason a seller is selling short sale is that they owe more on the house than the house is worth, and the bank has agreed to let the house go for an amount less than what the original mortgage was for. While the bank has been cordial enough to allow the sellers to get out of the home, they are not about to let the house go without a fight. Part of this fight involves meticulous paperwork and submitting all of that paperwork lands the listing agent a lot of work.
Preparing The Documents
The listing agent will first gather up all the documents required by the seller's bank and send them on over. This paperwork includes recent pay stubs and bank statements; aCMA put together by the listing agent and a closing statement. They will also work with the bank to put together a Broker Price Opinion (BPO), which helps the bank have a point of reference for the sale price. The listing agent will additionally negotiate the offers with the bank, submitting each offer and counteroffer as they arrive, as well as mitigate the second lien payoffs. A great listing agent will also check with the bank frequently to make sure no new documents are needed, and that there are no updates.
Because the listing agent is also a liaison between the buyer and seller, the listing agent delivers regular updates to them as well.
Beyond complying with each demand as set forth by the bank conducting the short sale, the listing agent will then also order the preliminary title report, reviews the short sale approval letter and delivers it to all applicable parties, works with the home inspector, and looks over closing documents.
As you can see, there is quite a lot going on behind the scenes!
What can the buyer do during a short sale?
The best thing a buyer can do during the short sale process is to sign the required documents as soon as possible and be patient. Buying a short sale property is a long process, and we mean loooooong! If you are ready to jump into a short sale, make sure you are prepared to be in it for the long haul. Remember that patience is crucial when you are waiting for an offer to be accepted.
Many buyers of short sale listings want to poke around on the market and see if they can find anything better. If you feel like you jumped the gun on the house of your dreams, by all means, get out of the sale! But don't look around for backup properties and waste the time of the bank, listing agent and your agent by stopping the process if you are not sure about buying the home.
Something that helps tremendously throughout the short sale process is if the buyer's agent makes sure their prequalifying letter from their lender is up to date. You don't want to be waiting on a prequalifying letter when the timeline for buying a house via short sale is already significantly long.
What should I look for in a short sale listing agent?
There are a few things you should ask your listing agent when going through with a short sale. The first is if they've listed short sales before. Listing a short sale is a complicated process, and even the tiniest mistake could throw off the timeline. Make sure your listing agent knows what they're doing and can prove it with short sales that have gone to closing under their watch. Knowing this won't only protect the sale of the house, it will preserve your sanity throughout the transaction.
The second thing you want to ask is if they handle the short sale or hand it off to a third party. Some listing agents will hand off their short sale listings to a third party who works explicitly with short sales, but this just puts another person into an already full boat. The process works out much better and goes a lot more smooth when you can work with the listing agent directly.
The last thing to ask is how many lenders you are working with throughout the sale. Occasionally, there is more than one lender to appease when working with your short sale. If there is more than one, know that the process may take a bit longer than you originally anticipated, and prepare accordingly. You'll also want to make sure that if there is more than one lender, that your agent has done this before.
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