1. Banks will not accept low ball offers just to get a property off of their hands. They get at least one, and sometimes 3 BPO’s or appraisals on a property and will only discount a percent off of the BPO.
2. Which means that you must influence the BPO. This is the most crucial aspect of a short sale. If the BPO/appraisal value does not come in at a favorable number, you will have to wait 3 to 6 months and resubmit your package.
3. Influence the BPO by bringing comparable properties which have sold within the last 90 to 180 days. They must be within a mile of your property. You may show REO and short sale comps since this is what the house will be worth to the bank if they do not accept your offer.
4. Paint a picture for the bank. Get a licensed contractor to give you an estimate of repairs required for the house to support your offer. Highlight those things that are out of the ordinary for a house of that age and in that condition.
5. Banks’ most feared words are “mold” and “foundation issues”. Use these words whenever possible.
6. Show the bank pictures of the damage to the property. Don’t rely on the pictures from a BPO agent. Sending pictures to the bank in a well constructed narrative has gotten banks to reassess the value of many homes.
7. Make sure that your package tells the bank a story. Make sure that all of the elements of your package make sense. The bank will be searching for excuses not to approve the short sale. Don’t give it to them.
8. If you suspect that you are being given less than a completely honest picture from the homeowner, do not submit it to the bank. The bank will try to accuse you of collusion, and may more closely scrutinize any further packages that you send them … on any property.
9. Keep in touch with your clients. You will need new financial data from them on a monthly or bi-monthly basis. Train them to send it to you before you ask. Tell them that most short sales are shot down due to the lack of timely financial data from the homeowner.
10. Call the bank at least twice per week to get a status update on the file. Make sure that it has been submitted to a negotiator, they will often expedite the process if you stay on top of them. Remember that a squeaky wheel gets the oil. Find out what the next step is and when you can expect it to be done.
BONUS TIP:
Always be friendly to any bank personnel that you are dealing with. Many people get on the phone and yell at them, and their work conditions are far from ideal. Remember that when speaking to them. If you are nice to them, they will work with you and at times show you favor.
Devon Ferdinand
Devon M. Ferdinand, CEO
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