The #1 Factor to Successfully Completing a Real Estate Short Sale
One of the most important factors of completing a short sale successfully is Managing Seller Expectations. Whether you are a real estate agent or a real estate investor, upon initial contact with a potential seller, you must set proper expectations up front! What I mean by that is you need to immediately let them know how long the short sale process can take, that there are absolutely no guarantees that your short sale will be successful, and finally that you will keep them updated on the process throughout the short sale negotiation. It is crucial to be transparent and let them know what you can and can’t do for them. This is extremely important on so many levels! It not only aids in building rapport with the seller, but it is also necessary when setting accurate expectations so if the short sale is unsuccessful for whatever reason, your seller understands why.
If you are a real estate agent and your goal is to list their property and get the highest and best offer that market will bear, then let them know that. Let them know the good and the bad. Make sure you know your state’s foreclosure laws and timeline, how long the short sale process can take, and finally the potential of their property being taken back by the foreclosing lender if you can’t find a buyer or the bank doesn’t accept the short sale offer.
If you are an investor and your goal is to buy it and resell it for a profit, buy it and rent it out, or buy it and rehab it, then tell the seller. Investors also need to know their state’s foreclosure laws and timelines, the effect that short sales can have on the seller(s), the length of time a short sale can take, etc. As I said before “be transparent!” And just like I mentioned above, whether you are a real estate agent or investor, you need to know the good and the bad of what you are trying to accomplish.
In addition to being explicitly clear on what you are looking to do with regards to their property, you’ll also need to explain what they can expect once you start working on their property. Explain the entire process of a short sale and what they can expect if there is one lender, or two, or more. For example: When I am working on a short sale my typical short sale takes between 2 to 4 months, sometimes longer depending on the foreclosing lender. So when I meet with the seller I tell them right up front the typical time it will take from the day an offer comes in to when I submit the short sale to the time the property closes. I also let them know that there are no guarantees the foreclosing lender(s) will accept the offer and finally I manage their expectation by giving them access to our online short sale management tool (www.ManageMyShortSale.com), which gives them real time updates on my short sale negotiations.
The most important factor in successfully negotiating a short sale is managing seller expectations. Always keep in mind that your sellers are turning to you to get their properties sold and they do not need any other added stress in their lives. The best thing you can do is be transparent, tell them the good and the bad, and finally keep them updated on your progress.
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