Short sales can get done!  I talked with a successful agent in Southern California yesterday and she told me she refuses to show clients short sale listing and will not take one herself because they are impossible to get done.  We would be out of business here in the Sacramento and Roseville area if we adopted that attitude.  Fortunately she is wrong.

Short sales are difficult, time consuming and can be frustrating for everyone involved but they can be completed.  We have been doing them successfully for two years and during that time we have seen evolutionary changes in how lenders approach them.  Lenders like Wells Fargo have gone from being one of the least responsive to one of the best and easiest to deal with.  The exception with Wells Fargo is if you have a second loan with them, then they revert to a nightmare, particularly if the first is also held by Wells.  Can you believe they haven’t figured out how to let one part of the bank handle both loans and more often than not the negotiators for the second will kill the deal because they demand more money than the other part of the bank is willing to pay for the release of the second lien.  When this happens they look stupid and it should be embarrassing to them.

The key elements in a successful short sale negotiation are communication and persistence.  Lenders are swamped with short sale and loan modification requests.   Sending a complete, well organized request to the correct department is vital.  Following up to make sure the package has been received and entered into their system is a must.  We can’t tell you how many times we have had to fax packages multiple times to get it to the right place.  Too many lenders think the junior lien holder is not big part of a short sale and they wait to deal with them until the first is ready to approve.  The junior lien holders can and often are the main negotiation element of a short sale.  Find out what their requirements are and deal with them early, particularly if the loan was made after the purchase of the home.  Non purchase money transactions provide the junior lender with some powerful negotiating tools.  Encourage the negotiators to talk to each other and remember there are at least four parties who want to see a particular transaction closed.

Given the choice maybe we wouldn’t work short sales either but when the market is loaded with them it is best to look at them as a way to help clients who one day will recover from their financial hardship and want to buy a house again.