Frequently Asked Questions

We Specialize in Handling Short Sales. What is a Short Sale?
A Short Sale is a win-win solution for the home owner and the lender. The lender gets the highest price for a quick sale at a market price. The borrowers get their credit restored and generally get relief from possible future legal actions and deficiency judgments. Short Sales occur when borrowers sell their property for a sales price less than the amount owed to their lender(s) after all sales expenses, including brokerage fees. In order for this to take place the lender(s) must accept a discounted payoff; meaning the bank(s) get paid less than the full loan amount owed. In a short sale, the home owners can get complete relief from all of their mortgage debt. The end result is the home is sold, the mortgage is satisfied (paid off) and home owners avoid a foreclosure or a bankruptcy. Perhaps even better, credit ratings will almost immediately improve because credit reports show that the mortgage was settled in full.

Does It Matter Who Does a Short Sale?
Very much so. Traditional real estate agents only get about 15% of their short sales approved. By having experienced negotiators that handle short sales all day, every day, and, by limiting the short sales we handle, we should get through almost every short sale. Toward this end, we have developed a brochure to either print out or email to homeowners that explain our services. To download it, click here.

What Do We Charge the Home Owner to Do a Short Sale?
Our short sale processing is FREE to the home owner.

Do you do Home Affordable Foreclosure Alternatives (HAFA) Short Sales?
Yes we do. The HAFA rules have been eased and more homeowners than ever are qualifying. It can be a good deal if a seller qualififies as they can get up to $3,000 is relocation assisance and should not have a deficiency afterward. HAFA may be available for mortgages that are owned or guaranteed by Fannie Mae and Freddie Mac or serviced by over 100 HAMP participating servicers. A list of HAMP participating servicers can be found by clicking here.

How do we see if the Home Owner is eligible for HAFA?
Send us the Short Sale Submission form with with the listing agreement, the Short Sale Processing Agreement, Authorization(s) to Release information, and the Homeowner Document Checklist and we will submit the package and get the process started. You should list the property and start getting offers. Whether or not the property is HAFA eligible, your homeowner will be in the best position to get the short sale approved. Also note that several servicers do not participate in HAFA, but they follow the HAFA guidelines.

What are the Benefits of a Short Sale?
When a Short Sale is achieved, there will not be a foreclosure. A foreclosure damages credit up to 7 years and bankruptcy up to 10 years. Many experts believe that a foreclosure is much worse than a bankruptcy.

Protect credit. Foreclosure damages credit up to 7 years and bankruptcy up to 10 years. Many experts believe that a foreclosure is much worse than a bankruptcy.

Our Short Sale Service is FREE to homeowners; the lender generally covers all the costs involved.

Controlling future costs. If a property is sold at an auction, owners may owe deficiencies and other expenses to the lender. Under most short sales we process, the homeowner will be relieved of this possible future burden.

How Much of a Discount Will the Bank Take?
That is a common question. However, it is the wrong question. The real question for lenders is: What is the house worth today so I can determine how much money lenders can salvage out of a bad situation? Remember that you represent the homeowner and are trying to get the highest price possible for the lender.

Can Investment Properties be Short Sold?
Most definitely. Any type of property can be sold through a short sale.

Can you do Short Sales Anywhere in the County?
We have done short sales all over the country.

What Happens If I Don't Do a Short Sale or a Short Sale is Unsuccessful?
The result is the same: A foreclosure. Our goal is for home owners to avoid foreclosure, which will affect credit more than a short sale. Generally a foreclosure is one of the most damaging occurrences in a credit history. Most likely most homeowners will miss mortgage payments through the course of a short sale and this will show on their credit history. But at the end of the day, when a short sale is completed, most credit reports will show that the mortgages has been "satisfied" and typically credit scores should almost immediately rise by 65 points, because of a vastly improved debt-to-income ratio.

What is the Short Sale Process?
Upon receipt of a complete short sale package, (you can download the file here), if like most lenders, the lender does not take electronic paperwork, we will fax the complete Short Sale Package to the lender and confirm receipt in 3 – 7 days. Why 3 – 7 days? This is the amount of time it takes for the bank to upload the packages onto their system. Once they receipt is confirmed, we ask the lender with the first mortgage to order an appraisal or a Broker Price Opinion (BPO), and request that a negotiator be assigned. It is important that agents meet the appraiser to tell him or her why your short sale is a good offer for the bank. This means giving them the listing history, comparables that show that the offer is fair and point out all flows that the property has.

Once a negotiator is assigned they have 30 business days to review the offer. During this time we continue to check back regularly to get a status so that we can keep everyone informed. Once they deem the offer as Bona Fide, they submit the offer to the investor (the actual owner of the mortgage) for final approval. This can take up to 30 business days.

After an Approval is Issued, How Do We Close?
Once the approval is received, the lender's approval will give the parties a maximum of 30 days to get the deal closed (it is occasionally shorter). Sometimes, if you are getting an FHA loan you will get additional time with no penalty towards commission. If you need an extension banks usually charge the agents 1% of your commission. For this reason, it is very important to close on time. We will give you an indication that an approval is forthcoming so that everything can close in the time allotted.

Neither the lender nor the title company can close overnight. The title company must get the HUD-1 to us for approval 72 hours before the closing. This allows us time to submit the file to the lender so that there are no surprises at the closing table.

How Much Will My Commission Be?
Generally 5%. We ask that you get a 7% commission on your listing agreement, or go back to the homeowner to get the commission increased to 7%. This will generally get reduced to 5 percent. Occasionally, especially if there are delays or a large number of liens, the commission can, in a few instances, be reduced further.

What is the Most Important Thing that an Agent Can Do?

Price the property correctly and to explain how and why the market responded to that price. The lender will not take anyone’s word that any contract price is a “fair” price. They will verify the price by sending out an appraiser or an agent they hire to do a Broker Price Opinion or BPO. It is imperative that agents research the property value and get the best info on the value. Then meet the BPO agent at the house with your CMA, using low price comparables. As the property is being sold in “as is” condition, show the BPO agent the repairs and improvements that need to be made that might not be so easily seen in a quick inspection. Finally, explain to the BPO agent how you ended at this sales price, and that it NOT an investor flipping the house.

Why Do Agents Have to Use Our Title Company?
Our title company is involved in the process from the start. When we receive the contract, our title company does a preliminary title search to find all the liens on the property. Since many homeowners who do short sales are experiencing financial difficulties, it is not unreasonable to assume that there may be some undiscovered liens on some properties. All liens need to be released in order to close.

By doing a preliminary title search, after a lender approves a short sale and agrees to a pay-off, we do not have to go back and reprocess and take the chance that the short sale fails due to a lack of due diligence. In addition, our title company will figure all fees due for taxes, homeowner association fees and interest costs, in order to figure out how much it costs the lenders not to approve the short sale on a daily, weekly and monthly basis. We have found that lenders have no idea what their holding costs are. In addition, we have fewer problems getting payments to agents by having a title company that understands the short sale process.

How Much Does Title Cost?
The title company charges standard rates, and, the lender generally pays most title charges!

How Do You Get Paid?
We get compensated by charging the buyer a Buyer Processing Fee (download here) of $1,500 or 1% of the purchase price or by having the agents pay us 1% of their commission (download here). The Buyer Processing Fee is listed on the buyer's side of the HUD-1 and is fully disclosed to the lender. We strongly recommend that the seller's agent put in the Agent's Remarks of the MLS that the buyer is responsible for paying a 1% Processing Fee at closing (subject to a $1,500 minimum), and that any offers should take this fee into consideration. We will ask the bank for a credit for our fee, but this cannot be guaranteed. We also might get some paperwork administrative fees that will be listed on the HUD-1, which are also paid by the bank.

Can’t You Get Paid By the Lender?
Perhaps. Outside of California, the buyer can ask the lender for a 3% Seller Concession. If the lender grants any concession, the buyer agrees to transfer any concession to us at closing. This option is not available to buyers who need any outside funds to close. For legal reasons, it is not available in California. To download this payment form, Click Here.

How Are Short Sales in California Different?
California, like other states, is extremely concerned with fraud in Short Sales. As with every other state, we are fully compliant with California law. We are properly licensed. Our California License ID Number is 01883778. We properly disclose all contracts and fees to lenders. Finally we are properly compensated; all of our fees are listed in all documents and HUD-1s that are sent to lenders. Unfortunately, due to our reading of DRE regulations, we cannot get compensated by being paid out on any seller concessions for any property located in California.

What Forms do you need From the Seller/Home Owner?
From the homeowner we will need a hardship letter, a financial information form, and the last two years of federal income tax returns (first two pages only), the last two months' bank accounts, and the last two pay subs of each borrower. If the homeowner does not have any of these statements, they will need to provide a short separate note stating why they do not have these documents. For a letter that outlines what we need from the homeowner, please click here.

What other forms do you need?
From the homeowner(s) we need all the items on the homeowner's submission form (Click Here). From the homeowner we will need a hardship letter, a financial information form, and the last two years federal income tax returns (first two pages only), the last two months' bank statements (all pages even if blank), and the last two pay subs of each borrower. If the homeowner does not have any of these documents, they will need to provide a short separate, note stating why they do not have them. For a letter that outlines this, please click here.

From the homeowner(s), we need a Mortgage/Lien information form. This gives us the name, account number and the relevant telephone number of all lien holders. We also need the same information for a homeowner's association where dues are paid, if there is one.

From the homeowner(s), we need an Authorization to Release Information form for each lien. This allows us to speak on the homeowner's behalf.

We need a Short Sale Facilitation Agreement. This is the basic contract between us and the homeowner. The agreement also explains that a successful short sale is not guaranteed. It also should protect real estate agents if a short sale is not successful.

We need a listing agreement for the property with a 7% commission. You will end up in almost every case with 5%. In order to get that, we have to start higher and go down.

We need a listing history for the home. Your MLS will allow you to print this out.

We need a clean, executed real estate sales contract - the simpler, the better.

We need to determine whether the buyer is qualified. We need to hold onto buyers. Lenders have toughened lending standards so we need assurance that the buyer is real. For this reason, we do not accept buyer pre-qualification letters where the buyer has not gone through credit review. Instead, we will only accept pre-qualification letters with credit review, pre-approvals or approval letters. If you have a cash buyer, we will need proof of funds. If you cannot get this easily, please click here to get a buyer pre-approved.

We need an executed Contract Modification form. If the Buyer is paying our fee (Click Here) or if the Realtor is paying our fee (Click Here). Besides indicating who is paying us, these forms clearly indicate that the contract is on a complete "as-is" basis and that no repairs will be made. These forms clearly tell the buyer that the transaction is a short sale and short sales do not always get approved. The forms indicate that if there are any shortages, the buyer may have to pay an additional amount of up to 2% of the contract price or $2,000, whichever is greater, buyer has the right to cancel the contract. A seller closing cost credit will be asked for, but may not be granted, to offset any seller shortfall or any other Buyer expenses. The buyer also commits purchase the property within 30 of lender acceptance, as long as the approvals come within 120 days of contract. Otherwise, the buyer may be release from the contract. These provisions help us close files and get everyone paid. The provisions mean that buyers do not have to be committed forever, yet keep them obligated for a reasonable period of time.

From the agent, we also need a contract submission form. When filling it in, please fill in the contact numbers for you, the buyer, the seller, and the buyer's agent. Also please check off each item to insure a complete package. Remember, we will not process incomplete packages.

Why Isn't a Normal Buyer Prequalification Letter Good Enough for You?
We need to hold onto buyers. Lenders have toughened lending standards so we need assurance that the buyer is real. For this reason, we do not accept buyer pre-qualification letters where the buyer has not gone through credit review. Instead, we will only accept pre-qualification letters with credit review, pre-approavals or approval letters. If you have a cash buyer, we will need proof of funds. If you cannot get this easily, please click here to get a buyer pre-approved.

What is an Acceptable Hardship??
Need to move from a home.
Reduced Income or Unemployment.
Inability to work due to health reasons.
Separation or Divorce.
Medical Bills.
Business Failure.
Death of a Spouse.
Adjustment in mortgage payment or unforeseen increase in monthly expenses.
Any other circumstance that cripples someone's ability to repay their mortgage.

Can you explain all the paperwork and how do I submit it?
All the paperwork is described and explained in the following attachment (click here). Complete sets of paperwork should be faxed to 888-257-1007 or E-mailed as a single PDF to submissions@Short-Sale-Negotiations.com

Does There Have to be a Contract on the Property?
The answer used to be “yes,” but no longer. Lenders are starting to accept complete paperwork on listed properties in order to guide the pricing of the short sale and to qualify the financial paperwork of the Seller(s). Once a property is listed, please send us the complete paperwork, without the contract, and we will submit it to the bank. Moreover, we will work with everyone to expedite and coordinate the process.

Can You Help Me Convince Homeowners That Using Your Services Will Help Them Get Out of Trouble?
We have a brochure that will help market Agents who use our services. Click Here to download it. The brochure tells homeowners that to give themselves the best chance to get out of trouble they need to use trained agents who use professional negotiators with the best track record.

Will Short-Sale-Negotiations.com Help Train Me?
While certification training can help, no bank or governmental body recognizes any piece of paper that calls any agent an “Expert.”  To become a real expert, all you need to do is to get the highest price possible, on an “as is” basis and let Short-Sale-Negotiations.com handle the rest of the transaction. You will need to meet the appraiser or the person doing the Broker Price Opinion (BPO and tell him or her why your short sale is a good offer for the bank. This means giving them the listing history, comparables that show that the offer is fair and point out all flows that the property has  In addition, we suggest that you Join our weekly Conference calls every Tuesday at 4:00 pm EST. Dial (308) 344-6400 and enter the participant Access Code 778862#. We will be looking forward to hearing from you. For any questions or concerns, please call us at 212-482-0000 or email us at info@Short-Sale-Negotiations.com.

Can I Download All You Documents in a Single Click?
Yes. To download them click here. They are zip files. If you have any questions about any of these forms, or why they are necessary, please look above where each form is explained. To submit a short sale, please fax the package to 888-257-1007 or email them to submissions@short-sale-negotiations.com

Have Any Other Questions?
Please email us at info@short-sale-negotiations.com and we will answer them promptly.

How Do I Call You?
Please call us at 212-482-0000 or 866-499-3399.

How Do I Submit Forms?
Our Fax is 888-257-1007. You can also E-mail us at submissions@Short-Sale-Negotiations.com.