It is important to understand who is involved in a typical short sale. As an agent or investor, you will be dealing with each of these players.
- Sellers. They are also referred to as the Borrower or Homeowner.
- Lenders. These are the banks or investors with liens against the property. In many cases, the loan may have been sold from one lender to another. In other cases, a loan servicer may be handling the collection of payments for the lender.
- Loss Mitigation Officers. The loss mitigation specialists of a lender or servicer help determine an acceptable payoff.
- Real Estate Agents. Typically the property will be listed with a real estate licensee. Another agent may represent the prospective buyer.
- Short Sale Consultant or Negotiator. There are many legitimate and experienced Short Sale consultants who act as third-party liaisons or negotiators to help sellers and agents. There are also many illegitimate or inexperienced people claiming to be Short Sale consultants. Having a professional consultant work the short sale is what can make or break a deal.
- Contractors and Inspectors. Many distressed properties face deferred maintenance or neglect. An estimate from a licensed contractor and a report from a certified inspector may be powerful negotiating tools in convincing a lender to accept less money.
- Appraisers or BPO Agents. In the latter stages of a short sale, the lender or servicer will likely pay for an appraisal or a Broker’s Price Opinion (BPO) from an agent. The lender will determine a payoff based upon the valuation established by the appraiser or BPO agent. It is imperative that the listing agent and/or short sale consultant meet the appraiser or BPO agent when they visit the property.
- Attorneys. The lender or servicer will hire a law firm to represent them in the foreclosure action. The seller is strongly encouraged to have legal representation too.
- Accountants. The seller is strongly encouraged to consult with their accountant in any short sale or potential short sale transaction.
- Credit Restoration Specialists or Counselors. The seller is strongly encouraged to speak with a credit counselor prior to a short sale transaction. After a short sale, it may be a good idea for the seller to hire a credit restoration service to help clean up their damaged credit record.
