Massachusetts Agencies

Part III in a Series on Short Sales

Articles from The Massachusetts Focus

Newsletter of Stewart Title Guaranty Company, Massachusetts Offices
Fall 2008, Volume 7, Number 4

Part III in a Series on Short Sales
by Craig J. Celli, Vice President and State Manager

Qualify the Lender

Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose. Some lenders, as a rule, never accept them. You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the “real estate short sale” or “workout” department; you want the supervisor’s name, the name of the individual capable of making a decision. Some lenders will have formal short sale packets with documents unique to the lender’s requirements. If the lender accepts short sales, ask if they have a packet.

Call Question:

“Have you ever accepted a short payoff as a workout prior to a foreclosure?”

If the answer is:

“Yes” in any form; then reply:

“Thank you. I am currently in the process of compiling the proper documentation to submit to you for consideration. Do you have a short sale packet, or shall we submit our own documents? What address can I send this packet to at the end of this week? What is your direct line?”

“Maybe” in any form; then reply:

“I can definitely understand your hesitation. I actually have quite a bit of experience in this area. After meeting with the seller and appraising the house, I believe it would make more financial sense to take this property back now. (Add in any statistical backup you have acquired.) Would it be acceptable if I submitted the client’s documentation for you to consider?”

“Absolutely Not”; then reply:

Thank the person for their time, and consider other options.

Secure a Buyer at Once

Assuming that you have spoken to the lender, and that lender is inclined to accept the short sale, the next and most important ingredient is securing a buyer. Short sale transactions are extremely time-sensitive, and the lender will not be inclined to extend the deal if there are no buyers interested in the property. If you do not have a buyer, the goal is to price the house low enough to receive offers, but high enough so that when the bank sends out an appraiser, both match up. When an offer comes in, notify the lender immediately.