Short Sale Offer Instructions
The Myers Team are Nevada Short Sale Experts. We have closed more short sale listings than any other Realtor in Las Vegas.* We are able to obtain these approvals due to the fact that we have developed a specific process; recognized by most large banking institutions and their investors. Since Bank investors require offers which meet specific guidelines, we only submit offers to the Bank(s) which comply with these guidelines. Therefore, we ask that you review these instructions with your Buyers. This will allow us to quickly submit your Buyers' offer for presentation and gives you a better chance of having your offer accepted by the Seller's Lender.
Myers Team clients have instructed us to filter which offers they are willing to have us present, in order to ensure that offers received meet the approval guidelines of Banks and their investors. An offer will only be submitted to the Bank if it is accepted by the Seller and meets the criteria mentioned in this section. Please review the guidelines listed below with your Buyers. We urge Buyer(s) agents to explain the short sale process to their clients to answer their Nevada Short Sale Questions and Answers. This will minimize frustrations and concerns. We wish to thank you for your time and consideration and look forward to working with you and your Buyer.
The Short Sale Process
Short sales are complex transactions and require special attention. Some industry statistics show that only about 50% of short sales successfully close. In order to improve on this number, we have implemented some specific guidelines.
In general, we follow the standards of the Greater Las Vegas Association of Realtors (GLVAR). The Seller accepts ONE offer and it is forwarded to their lender ("the Bank") for approval. Before committing to one Buyer, we must make certain that the Buyer not only wants the property, but understands the issues in closing this transaction. We invest MANY hours of our time to get each transaction processed from start to finish. Each deal is painstakingly packaged so that at the time of submission, the Bank has everything they need to arrive at a decision in the shortest amount of time.
The Seller still holds title to this property and must be represented fairly. The Bank will never sign the offer, only the Seller. The Bank will only issue a short sale approval letter after the complete package has been submitted, reviewed and accepted. A short sale approval letter is specific to your Buyer and your Buyer's offer.
We make every effort to assist the Seller in selecting an offer that will be acceptable to the Bank. The Bank will ONLY approve a short sale offer, if it is at or near current market value. The Bank might counter the price or other terms of the offer, prior to approving the short sale. We ask that you and your Buyer be flexible and open minded to a reasonable counter offer from the Bank, even after the Seller has accepted the offer. If your Buyer is not flexible with their closing date and other terms, then a short sale might not be right for them. MOST OFFERS MUST BE MODIFIED IN SOME MANNER BEFORE THE BANK WILL APPROVE THEM.
We have found that if your Buyer is properly informed about the short sale process, it enables us to single out a serious Buyer and the Seller can feel comfortable that the Buyer will close escrow.
Nevada Short Sale Experts
The Myers Team is Nevada's #1 Short Sale Team. EXPERIENCE COUNTS!
There are many Realtors trying to do short sales, however, how many have successfully closed hundreds of short sale transactions? The Myers Team is the #1 Short Sale Team in the state of Nevada.* Why would you advise your Buyer to enter into escrow with a listing agent who is inexperienced with actual short sale closings? If you enter into escrow with an inexperienced listing agent, what do you think your chances will be for getting paid ? Additionally, your Buyer will become frustrated, and may take out their frustrations on YOU. Our team has closed more short sale listings than any Realtor or Broker in Nevada since 2007.* Doesn't it make sense to deal with the most experienced short sale listing agents in Nevada? We do all of our own negotiating with banks, and handle every detail of the approval process from listing to closing.
Equator and The Short Sale Process
One of the most important reasons for our success is how we negotiate our approvals. For most Realtors, their strategy for obtaining short sale approval from the Bank is to upload paperwork into the Equator system...then sit back...and wait. Submitting paperwork to "Equator" is NOT negotiation. When you submit paperwork to Equator, your paperwork gets filed and stored with millions of other documents in the endless network of cyberspace. Realtors submit this paperwork hoping they will be contacted by a bank "negotiator." What most Realtors fail to understand is that the negotiator is basically the "middle man." There are many negotiators who are very good, however, many are incompetent. Very few negotiators have the power to approve a short sale. The role of a negotiator is to prepare a file to submit to the investor of the loan. The "investor" of the loan is the owner of the loan and ONLY THE INVESTOR CAN APPROVE A SHORT SALE. This is why we spend the majority of our time dealing with the investor, in addition to the bank servicer.
Las Vegas Short Sale Specialists
When you place an offer on a Myers Team listing, you dealing with the most experienced short sale team in Nevada. All Myers Team listings must meet the following criteria before being entered into the MLS:
1) The work out package is in our possession and is 100% complete.
2) The work out package is updated each month with current paystubs and bank statements.
3) The investors of each loan have been identified and contacted. (in addition to the servicer)
4) The approval criteria has been reviewed with each respective investor group.
5) The preliminary title report has been obtained, reviewed and sent to the servicer and investor.
Please note that written approval cannot be obtained until we have an executed contract, a HUD-1 with the current Buyer's name, and an opened escrow. While other Realtors submit offers and paperwork to Equator, then basically sit back and wait to see what happens....we are in constant communication with both the servicer and the investor of the loan. We leave NOTHING to chance.
What Happens If The Seller Accepts My Offer?
Your offer shall be placed into "C" status within 24 hours once the Buyer and Seller have executed the contract, and the full earnest money has been deposited into escrow. Once your offer has been accepted, then your offer shall be the ONLY offer submitted to the bank. Any new offers shall be kept as "Back-Up Offers" only, and they will NOT be presented to the Seller nor the Bank unless the current buyer should default.
PLEASE SEND ALL OFFERS TO: Please email all offers to the email address listed in the MLS. Be sure to state the property address in the subject line of the email message. Only GLVAR contracts will be considered. Only documents that are emailed in PDF format will be accepted. Other offers cannot be submitted. Offers may also be faxed to the fax number listed in the MLS. Please include a cover sheet with the following information: ATTN: The Myers Team - Short Sale Division. All offers shall be responded to within 1-3 business days.
Communicating With The Myers Team:
Due to the nature of short sales, the Myers Team spend most of their day on the phone with banks, therefore, email is the fastest and most effective way for us to communicate. If you are a Realtor, and wish to speak with The Myers Team, please contact their office via email at NevadaShortSaleExperts@gmail.com Your email will be returned within one business day.
If you have a question regarding a Myers Team property, please email your question to NevadaShortSaleExperts@gmail.com Be sure to include the property address. We will do our best to answer all questions within one business day.
The Seller will ONLY consider offers where the buyer agrees to deposit the required earnest money funds into escrow upon buyer and seller execution of the purchase agreement. Partial earnest money deposits will not be accepted. A short sale escrow is the same as a traditional escrow, however, with a contingency. ANY OFFER WHICH STIPULATES THAT THE BUYER SHALL NOT DEPOSIT THEIR EARNEST MONEY INTO ESCROW UNTIL AFTER THE BANKS FINAL WRITTEN APPROVAL - or - BUYER SHALL DEPOSIT PARTIAL EARNEST MONEY UNTIL FINAL WRITTEN APPROVAL IS OBTAINED, SHALL LIKELY BE REJECTED BY THE SELLER.
GLVAR Purchase Agreement:
All offers MUST be submitted on the GLVAR Residential Purchase Agreement form.
Short Sale Workout Package:
Please do not call or email The Myers Team to ask "Where we are at with the short sale?" Myers Team listings are NOT placed into the MLS until the Seller(s) have provided us with a complete workout package. Additionally, we are constantly asking Sellers for updated financial information each month. All Myers Team listings are approved contingent upon final investor written approval. Final investor written approval cannot be obtained without a fully executed purchase agreement.
PREQUALIFICATION IS MANDATORY ON EVERY TRANSACTION, REGARDLESS OF WHERE THE BUYER INTENDS TO GET THEIR LOAN. Before an offer can be submitted, the Buyer must contact a Myers Team preferred lender and obtain preapproval for a loan. ALL prospective Buyers must provide a written confirmation of preapproval. Not all loan officers are familiar with the short sale process, nor qualified for this area of specialization. Buyers who use loan officers who are inexperienced with the short sale process will be at a disadvantage over Buyers who use lenders experienced with short sales. YOUR OFFER WILL NOT BE PRESENTED TO THE SELLER WITHOUT A PRE-APPROVAL LETTER.
Highest and Best Offer for a Short Sale:
In a short sale transaction, the highest and best offer is NOT solely determined by the purchase price. Other criteria are equally important, such as the strength of the Buyer's financing. In a short sale escrow, it is the Seller's Lender who determines the close of escrow date. Seller's Lenders typically give a Buyer 3-4 weeks to close escrow. If the Buyer's lender is unable to close in 3-4 weeks, then the Seller's Lender is under NO obligation to grant an extension and may foreclose on the property. In the event that the home forecloses, the bank may choose to sue the Seller and pursue a deficiency judgement per Nevada foreclosure law. Therefore, it is critical to find a Buyer, and a Buyer's Lender who have the ability to close on time. Buyers requesting closing costs are not considered to be as strong as Buyers who have the ability to pay for their own closing costs. (even if the closing costs are added to the list price.) We have found that the "cleaner" the offer, the greater chance that it will be approved by the Seller's Lender.
Any proposed purchaser who intends to pay cash for the property will be required to provide proof of funds to close. The proof may be in the form of a current bank statement or letter of funds verification from their bank. PROOF OF FUNDS WILL BE REQUIRED PRIOR TO ANY OFFER SUBMISSION. YOUR OFFER WILL NOT BE PRESENTED TO THE SELLER WITHOUT A PROOF OF FUNDS VERIFICATION LETTER.
FHA and VA Financing:
Due to the time constraints involved with short sales, we have had lengthy discussions with our Sellers to explain the risks associated with FHA and VA loans. In a short sale escrow, it is the Sellers' lender who determines the close of escrow date, NOT the Agents, Buyers' or Sellers'. This close of escrow date is typically 3-4 weeks from the time that the approval letter is issued, and the CLOSE OF ESCROW DATE IS FIRM. Since most FHA and VA lenders are NOT able to close a loan in 3-4 weeks, this places the Seller in a compromising position. If the Buyer's lender is unable to close within the timeframe specified by the Seller's lender, then the Seller's lender is under NO obligation to grant an extension. Therefore, if the Buyer's lender fails to perform, the Seller risks being foreclosed upon and the Buyer risks losing their earnest money deposit. The Seller's lender does NOT work on the timeline of the Buyers' Lender.
In order to present the strongest possible offer to the Seller, it is recommended that the Buyer prequalify with a Myers Team preferred lender. The Buyer is under NO obligation to use one of our preferred lenders, however, the Seller is under no obligation to accept an offer with FHA or VA financing.
There are many incompetent and unethical loan officers out there who will "Pre-Qualify" a Buyer without obtaining a Buyer's credit report, obtaining Buyer's pay stubs, IRS tax returns, Bank Statements, etc. Some lenders will even issue a Pre-Qualification letter without having the Buyer fill out a loan application. Many lenders take "verbal" loan applications over the phone, however, unless a lender has recently run a buyers credit report, how can they be sure that the buyer has no liens or judgements against them? Some Buyers are trying to purchase homes and have recently been foreclosed upon and simply do not qualify. These lenders are failing to properly represent their clients and we cannot afford to enter into escrow with an unqualified Buyer.
OUR SELLERS HAVE INSTRUCTED US NOT TO PRESENT AN FHA OR VA OFFER WITHOUT THE ABOVE CRITERIA BEING MET.
Preferred Escrow and Title Companies
Our preferred escrow companies have been approved by the Bank(s) involved to facilitate this Short Sale escrow work. A Short Sale escrow is more involved than a traditional escrow; therefore, the bank, and the seller have the right to choose experts in this field.
Seller Short Sale Hardship:
In order for the seller to be approved for a short sale, they must be able to prove to their bank that a documented hardship exists. The Seller(s) will be receiving “NO CASH” from this transaction. Any additional funds usually due to the Seller(s) from escrow accounts or from prorations will be paid to the bank(s) which are being affected by this short sale. The Seller(s) have no additional cash, and have provided required documentation to the Lender(s) whom are being affected by this short sale. Therefore, the Seller will NOT be allowed to pay for any reports, treatments, inspections, appraisals and or repair items. Buyers are required to pay for any and all inspections, and or certifications to satisfy due diligence.
As Is/Where Is:
The seller cannot pay for any repairs in a short sale transaction. Buyer understands that in the event that an appraiser should include appraisal conditions which must be addressed before the close of escrow, that buyer shall be responsible for completing and paying for any required repairs and/or items mentioned by appraiser required to close the transaction. Part of the reason that the property is being sold in the proposed price range is due to the condition of the home, taking into consideration the existing repairs needed. YOUR OFFER WILL LIKELY BE REJECTED BY THE SELLER IF YOU ASK EITHER THE SELLER OR SELLER(S) LENDER TO PAY FOR ANY REPAIRS.
Short Sale Property Appraisals:
Buyer to pay for appraisal. Neither bank nor seller will pay for appraisal or reimburse appraisal expense. YOUR OFFER WILL LIKELY BE REJECTED BY THE SELLER IF YOU ASK EITHER THE SELLER OR SELLER(S) LENDER TO PAY FOR APPRAISAL EXPENSES.
Home Warranties For Short Sale Properties:
Buyer to pay for home warranty. Neither bank nor seller will pay for a requested home warranty. YOUR OFFER WILL LIKELY BE REJECTED BY THE SELLER IF YOU ASK EITHER THE SELLER OR SELLER(S) LENDER TO PAY FOR A HOME WARRANTY.
If you are both the Buyer and you are the agent, and/or married to the Buyer and you are the agent, owner/part owner of the corporation or LLC purchasing the property and you are the agent, you may NOT be paid a commission. The lender(s) involved often treat these as they do the REO's and reduce the commission by the amount paid to the Buyer's "Agent" when the Buyer is also the licensee.
The Seller will NOT be allowed to accept any offers that are designated "And/Or Assignee." PLEASE DO NOT WRITE OFFERS IN THIS MANNER AS THEY WILL BE REJECTED IMMEDIATELY WITHOUT REVIEW.
Bona Fide Offers:
Once an offer has been submitted to The Myers Team that meets ALL of the above criteria, the Buyer's Agent shall be forwarded the required addendum which has been approved by the Seller. Once this addendum has been signed by the Buyer, the offer shall be considered "Bonafide" and will be presented to the Seller.
In summary, the Seller(s) have agreed (in writing) that only Bonafide offers shall be presented to the Seller. A Bonafide offer includes the following:
1. Offer to Purchase Agreement (GLVAR form only)
2. Agency Confirmation completed on page 11 of the GLVAR Purchase Agreement.
3. Agent signature under the Earnest Money Receipt as having received it (Page 11)
4. Copy of the Earnest Money check payable to our preferred Escrow and Title Company.
5. Duties Owed with Buyer's Agent name, and signed by the Buyer.
6. Loan Pre-Approval Letter (For New Loans)
7. Written and Verifiable Proof of Funds (Cash Transactions Only)
8. Offer must follow ALL of the above guidelines and criteria mentioned in this web site.
9. Buyer Signed Addendum - This will be sent to buyer's Agent once a Bonafide offer has been received.
If your offer is not Bonafide, you will NOT receive an email requesting the missing documentation. It is your obligation to ensure that your buyer's offer is Bonafide.
What To Expect - The Short Sale Process:
Step 1: Complete and email your offer and paperwork to NevadaShortSaleExperts@gmail.com or fax to (702) 946-1217
Step 2: The Myers Team prepares paperwork for the seller and submits with our recommendations within 1-2 business days of receipt of a "Bonafide Offer." If your offer is not a "Bonafide Offer" (see above criteria) then the Seller has authorized us NOT to present the offer.
Step 3: The Seller reviews the offer(s) and our recommendations. This takes anywhere from 2-3 business days depending on the Seller's availability.
Step 4: The Myers Team receives an email from the Seller with a rejection or counter offer.
Rejection: If your offer is rejected, you will be sent an email from The Myers Team informing you of the rejection. Once again, the Seller has authorized us to only submit "Bonafide" offers. If your offer does not fit the criteria of a "Bonafide" offer, it will not be presented to the Seller, nor will you get a Seller signed rejection.
Step 5: If the Seller accepts your offer, then you must deposit the earnest money into escrow within 24 hours. No offer is considered executed until the earnest money funds have been deposited. Once the deposit of the earnest money has been verified, property shall be placed into "C" status in the MLS. Your offer shall be submitted to the bank within 24-48 hours after execution.
Step 6: With 3-5 business days, we will confirm with the Sellers Lender(s) that the offer has been received (imaged) into the system. The Myers Team does NOT work with negotiators. Due to the large volume of short sales files that we handle, most major banks have assigned us a "contact manager" who handles all of our files with that particular bank.
Step 7: We will confirm within 60 days that the BPO/Appraisal has been ordered. Please be advised that certain investors (such as Fannie Mae) require multiple appraisals in order to grant a short sale approval. You are welcome to email The Myers Team office for updates, however, you will be provided with updates once we receive them. Please do not call the Myers Team office for updates.
Step 8: Once we have received the final investor written approval, you shall be contacted within 24 hours. Escrow shall be provided with a copy of the written approval, and you will be notified via email. Once you have been notified by email that final written approval has been provided to escrow, the due diligence period shall officially begin (based upon date and time of the email)
Thank you for taking the time to read and follow these simple instructions. Short sales are frustrating to many because they do not understand the approval process. The Myers Team are experts in the short sale approval process, and look forward to working with you and your buyer. Please scroll down to read more information regarding short sales.
WARNING: If you place an offer on a short sale listing where the listing agent is inexperienced with the short sale process, or specific investor approval criteria, then it is highly unlikely that your short sale will ever be approved. You will waste your time, and your buyer may become frustrated with YOU. While many Realtors claim to be "Short Sale Experts" or "Short Sale Specialists" we at the Myers Team are experts at SHORT SALE CLOSINGS. If you have any questions about our closings, please have your Broker verify our number of closings in the MLS. The proof is in the results.
The Truth About Nevada Short Sales
Short Sales and "The Matrix?"
When you think of how banks handle short sales, think of the movie, "The Matrix." Banks have worked VERY hard to create a reality that benefits them. Banks want you to believe that they are in control of the short sale process. Banks want you to think that the "ONLY" way to get a short sale approved is to follow the rules, submit the required paperwork to Equator, then sit back and "be patient." Banks threaten that they will "close the file" if Realtors do not follow the directions of the negotiator. The biggest mistake Realtors make when trying to obtain short sale approval is they place unconditional faith with the bank servicer. While this may be the Reality of short sales, it is far from the Truth. Like the movie "The Matrix," we at The Myers Team have chosen to take "The Red Pill" and uncover the truth about the short sale process. The truth of the matter is that short sales save bank investors tens of thousands of dollars versus a foreclosure. The truth is that we, as Realtors, are doing the banks a HUGE favor and saving them money. (Even though some negotiators treat Realtors like dirt.) The truth of the matter is that "Banks" are simply acting as "middle men" for the investors. The truth is that we, as Realtors, have tremendous control once we are able to identify who the investor is, and begin communicating with them directly. The truth is that most servicers' are NOT motivated to help borrowers or approve the short sale. It's NOT their money. As we mentioned before, some negotiators are very good and expedite the process. Unfortunately, they are the exception...not the rule. In order to have control over the short sale process, you must find out who owns the loan and open dialogue with them. This is why we remain in constant communication with the investor...as well as the servicer.
Many Realtors and borrowers do not understand the difference between the "servicer" and the "investor." Homeowners borrowed money from an investor, who hired a bank to offer, service and manage the loan. (Example: Five people can each have a mortgage with Bank of America, however, all five mortgages can be owned by different investment groups.) Most residential mortgages are managed (or serviced) by a servicing company. The role of a servicing company is to send out mortgage statements and collect payments for the investor of the loan. Servicing companies include most major banks such as Bank of America, Wells Fargo, ASC, First Franklin, Citibank, Litton, HSBC, GMAC, Chase, etc. Negotiators work for servicing companies. The negotiator must prepare the short sale file to submit to the investor for approval. (Investors include Fannie Mae, Freddy Mac, AIG, etc.) Most bank negotiators are OVERWORKED, UNDERPAID, and quite annoyed by Real Estate Agents. They are in NO rush to submit your file to the investor for approval. (Remember, it's not their money, plus they continue to receive a monthly servicing fee from the investor. It is in the servicers' best interest to make the approval process as "lengthy" as possible in order to collect the most money from the investor.)
What is a Short Sale?
A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.
In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's loss mitigation or workout department and the actual investor of the loan. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan. The lender has the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower's financial situation.
A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A bank will typically determine the amount of equity (or lack of), by determining the probable selling price from a Broker Price Opinion, BPO (also known as a Broker Opinion of Value, BOV) or through a valuation of an appraisal. For the home owner, advantages include avoidance of a foreclosure on their credit history and avoiding being sued by the bank for the deficiency amount. A short sale is typically faster and less expensive than a foreclosure.
What is the Difference Between Buying a Short Sale vs. a Foreclosure?
A short sale is a pre-foreclosure sale. The current owner is still in possession of the property, and attempting to sell the home with lender cooperation to avoid a foreclosure. A "foreclosure" home is a "bank-owned" sale, meaning that the bank has already foreclosed, and taken possession of the property.
While short sale homes and foreclosure properties are typically priced the same, there are significant advantages of purchasing a short sale home versus purchasing a foreclosure.
It is a sad truth that many foreclosure properties have been vandalized. Read Story When you purchase a short sale home, Federal and State laws require a seller to make certain disclosures to a prospective purchaser. Buyers of short sale homes will be provided with seller signed disclosures, such as the Seller's Real Property Disclosure. Buyers of short sale homes will know exactly what damage, if any, has happened to the home (i.e., roof leaks, plumbing issues, home owner insurance claims, etc.)
Purchasing a bank owned property is the exact opposite. Banks will require you to sign a NRS 113 waiver, which essentially allows banks to sell homes without disclosing defects. Since banks typically do not disclose any defects, this creates a very risky and potentially costly situation for home buyers.
How Long Will the Short Sale Process Take?
Many buyers have become apprehensive about purchasing a "short sale" home due to the perception that the process takes a very long time. Much of this perception is due to the fact that there are many inexperienced Realtors attempting to do short sales, and have no idea how to get them approved. Many "experienced" Realtors, well known in their communities, are trying to do short sale transactions, yet they have little or no experience with these type of sales, and as a result, buyers become frustrated due to the inability to get the bank approval.
The length of a short sale transaction is dependent upon many factors. The most important factor which can determine the length of a short sale escrow is determining who the investor of the loan is. Many banks simply "service" a loan for the actual investor, or benefactor. Most banks must obtain permission from the investor to approve a short sale. Many homeowners who have their loans with banks such as Countrywide, are unaware that Countrywide may simply be servicing their loan. The actual investor of the loan could be Fannie Mae, Freddie Mac, Chase or even Wells Fargo. Many Realtors who take short sale listings have no idea who the actual investor of the loan is, and they wait months and months for an approval with little or no results. We, at The Myers Team, have developed relationships with most major banks. Additionally, we have our own contacts with investors such as Fannie Mae and Freddy Mac. This enables us to communicate directly with the actual investor of the loan, and expedite the approval process faster than other Realtors.
Once escrow has been opened, final investor approval takes approximately 12-24 weeks. Due to the large amount of requests for short sale approvals, banks and their investors are busier than ever, hence the waiting period. If we do not receive ongoing communication from banks regarding the approval process, we have the ability to speak directly with the investor and follow up on the bank.
Placing Offers on Short Sale Properties
Your offer will be reviewed by the seller, however, only the highest and best offer will be executed by the seller and sent to the bank. Please be advised that the price of the property has been carefully determined based upon recent comps and current market value. If your offer is under the list price, please expect the seller to counter. In order to receive final investor approval, we must be able to justify the price of the offer based upon recent closed and recorded properties. Banks will do their own appraisal and have access to the Multiple Listing Service. The seller of the property will ONLY agree to execute a contract and take their home off the market if the value of the offer can be justified by recent comps, and the buyer is willing to open escrow and deposit the requested earnest money funds upon contract execution between buyer and seller. Lowball offers are a waste of time for all parties. Offers which we receive under comp value will be countered or rejected.
Some short sale properties will have multiple offers. You should prepare your buyers for the possibility that their offer will be one of many, and buyers should make their highest and best offer up front. As the buyer's agent, you have the right to inquire whether or not there are other offers on the property, however, the listing agent may or may not have authority from the client to disclose the existence of multiple unaccepted offers. The listing agent may or may not disclose the number of other offers, their terms or conditions.
In many situations, the seller will make multiple counteroffers and/or a request for the buyers' "highest and best" offers. It is each buyer's option to respond to such a request: the buyer should only offer what they feel comfortable with and are qualified to purchase.
Counteroffers and Addenda
In every short sale transaction, you can expect a form counteroffer (sometimes styled as an "addendum" but serving the function of a counteroffer nonetheless) which overwrites numerous provisions of the buyer's offer (purchase agreement) and inserts new provisions not addressed in the purchase agreement. The addendum has been prepared to make your offer fit the approval criteria of most bank investors. There is no point submitting your offer to a bank if it does not fit the short sale approval guidelines set forth by Fannie Mae, Freddie Mac, or other investors. Please prepare your buyer and make sure that they understand the purpose of the addendum. Seller cannot approve the terms of the purchase agreement without investor approval. This is the sole function of the addendum. Both the agent and the buyer should carefully read and understand every provision of the addendum.
There is no one standard for allowable closing costs in short sale transactions. Fannie Mae and Freddy Mac have different allowables, which can very greatly from property to property. Please be advised that our properties are already priced within BPO guidelines. It is recommended that closing costs, if needed, be added to the list price. This should be taken into consideration when writing the initial offer and reviewing any counteroffer or addendum.
Once we have written bank approval, how much time will the bank give us to close escrow?
Typically 30 days. It is critical for buyers to have their financing ready to go and all loan conditions met, (with the exception of appraisal and the preliminary title report) before writing the offer on a short sale. All offers must be submitted to the bank with a buyers' "pre-approval letter." The pre-approval letter should specify that the buyers have already filled out a loan application, and that their credit information has been obtained. (Middle FICO score, DTI information, etc.) Banks are NOT interested in buyers who unable to close escrow within 30 days of receiving the written short sale approval letter. It is recommended to use lenders who are well versed with the short sale process, and who don't wait to start working on the loan until they receive an executed contract in their possession.
Will a cash offer make the short sale process go faster?
Cash offers are only good, if they are "the right amount of cash." Cash offers are stronger, due to the fact that once written bank approval is received, the buyer can close quickly, however, lowball cash offers are NOT strong offers, and will be countered. The bank will still need to perform their due diligence, regardless if the offer is cash, or involves lender financing. Expect a waiting period of 12-24 weeks, even with cash offers.
Communicating with The Myers Team
In order to facilitate short sale approvals, the staff of The Myers Team spends most of their time on the phone with banks and bank investors. Please do not call the Myers Team for updates, for this slows the process. Please communicate via email and direct all emails to NevadaShortSaleExperts@gmail.com You will be contacted as updates become available. It is not uncommon to go several weeks with no news; however, rest assured that your file is being followed up on.
What if the Sellers Lender Does Not Cooperate with the Short Sale?
Due to the large volume of short sale files handled by The Myers Team, we have many loss mitigation contacts with most major banks and their investors. Banks are overwhelmed in this unprecedented foreclosure crisis, so it is critical that files are followed up on. Many bank negotiators are handling up to 500 files each. They are minimally trained, and will not be able to help you beyond what is on their "script." There are also many negotiators who are competent and very effective. While the short sale process is not a fast process, there are certain steps which we follow up on, to ensure that our files are being handled properly, and not getting lost in the shuffle. In the event that the bank fails to keep us informed, there are a variety of procedures which we employ to escalate the situation and ensure that our file is being handled in a professional and expedient manner.
1) If the servicer is not communicating in a manner to which we feel is acceptable, we have the ability to contact the "Beneficiary" of the loan directly. While some investors have given the servicer the full authority to negotiate on their behalf, others do not. We will not hesitate to call or email the investor to see how far our offer has gotten in the maze.
2) Most banks have "escalation" teams who handle "difficult files" and "difficult Realtors." We have the ability to contact the managers of the "escalation teams" of most major banks, should we determine that our file is n ot being handled properly.
3) If negotiators do not answer legitimate questions, or return our phone calls or emails, we will contact the loss mitigation manager or their VP directly. If Senior Management does not return our phone calls or emails, we will then escalate with the FDIC and/or the SEC, Federal Reserve, and OCC by filing as many formal written complaints as necessary.
4) Most banks are motivated to cooperate with the short sale, however, the key is making sure that the right people are handling your file. If we determine that our file is being handled with incompetence, we will be forced to choose one or more of the above options.
Is it harder to do a short sale if there are 2 loans on a home, versus 1 loan?
Yes. There are more steps when two separate banks are involved, however, we deal with this situation every day. Sometimes, it is actually easier to get the approval from the second lien holder than the first. Remember, if the second lien holder does not agree to take a payoff from the first, then they will be wiped out through foreclosure and receive nothing. We have found that lien holders in second position are very cooperative.
* #1 Status is based on production by non-lawyer affiliated Realtors and Brokers from January 1, 2007 through December 31, 2012. (listing ends only) The information provided is obtained from public records, it is deemed reliable but not guaranteed. The Myers Team does not guarantee that all home owners will be able to purchase a new home in one year or less. This will depend upon many factors, including your credit history before the short sale. Not all clients will qualify for a short sale. Not all clients will be eligible for the advertised services contained in this web site. Not everyone will qualify for Government assistance programs such as HAFA. Banks are not required to participate in the HAFA program. Restrictions apply. Nevada state law (NRS116.4109) requires sellers to provide and pay for a homeowners association resale package. If you live in a home with one or more HOA's, there may be state mandated fees required to comply with Nevada State Law, and homeowners will be required to provide a buyer with all CIC disclosures. The Myers Team are NOT lawyers, nor qualified to give legal advice of any nature. The Myers Team are NOT accountants, CPA's nor qualified to give tax advice. This web site is not intended to offer legal advice and all information contained in this web site is for information purposes only. All Myers Team clients are encouraged to seek the advice of a real estate attorney, and/or a qualified CPA. All of the information contained in this web site is subject to change. All site software, design, text, images, photographs, illustrations, audio clips, video clips, artwork, graphic material, or other copyrightable elements, and the selection and arrangements thereof, and trademarks, service marks and trade names (the "Material") are the property of The Myers Team™ and/or its subsidiaries, affiliates, assigns, licensors or other respective owners and are protected, without limitation, pursuant to U.S. and foreign copyright and trademark laws. The Myers Team™ hereby grants you a personal, non-exclusive, non-assignable and non-transferable license to use and display, for noncommercial and personal use only, one copy of any material and/or software that you may download from this Site, including, without limitation, any files, codes, audio or images incorporated in or generated by the software provided that you maintain all copyright and other notices contained in such Material. You agree not to reproduce, modify, create derivative works from, display, perform, publish, distribute, disseminate, broadcast or circulate any Material to any third party (including, without limitation, the display and distribution of the Material via a third party web site) without the express prior written consent of The Myers Team™. Use of http://www.NevadaShortSaleInfo.com and/or http://www.VegasShortSaleInfo.com and/or http://lasvegaslist4less.com and/or its licensors' Material is only permitted with their express written permission. You further agree that you will not disassemble, decompile, reverse engineer or otherwise modify the Material. Any unauthorized or prohibited use may subject the offender to civil liability and criminal prosecution under applicable federal and state laws.