The “short” in short sale simply means that the amount paid at the sale of a property on behalf of the borrower for an outstanding mortgage is less than the amount owed. But the short sale process in itself is time consuming for Real Estate Agents. In fact real estate professionals who specialize in short sale transactions are well aware that – patience, diligent follow up and a long wait – is the name of the game.
The current Real Estate Market
The numbers of distressed homeowners has been increasing. Leading to an upsurge in the number of potential short sales available to real estate agents. Many of these homeowners need someone to negotiate their short sale once they have decided that it’s the best option for them to use to avoid foreclosure. The sheer amount of documents to be prepared as well as the time spent on the phone going back and forth with lenders during a short sale negotiation makes investing in a Virtual Assistant (VA) a strategic decision.
Now, “How can hiring a VA efficiently and effectively assist in each short sale negotiation?” To answer this question, let’s go through the short sale process and then point out crucial areas where a virtual assistant can complement the agent’s efforts.
The Short Sale Process
Short sales follows the same sequence of steps for those real estate agents who handle the entire process from start to finish. It begins with the agent marketing for prospective clients, screening them, signing up the listings, getting the lender’s specific short sale requirements and instructions, sending in the Authorization to Release Information document to the lender, listing the property on the Multiple Listing Service (MLS), scheduling showings and following up with potential buyer agents, preparing and submitting the short sale packet, following up with the lender once the short sale has been initiated, getting the short sale approved by the lender and finally, getting the buyer to close on the transaction.
1.) Marketing for clients: Agents have various ways to find clients such as sending out direct mails, going door knocking, internet marketing and so on. The VA can assist the agent by handling all the calls that come in as a result of the marketing effort. The VA can also schedule time for the prospects to speak with the agent in order to get all their real estate specific questions answered as well as follow up with them prior to an appointment to confirm their availability.
2.) Screening potential clients: To start off the process, the VA can do the screening process for the agent, to find out if they meet certain conditions that qualify them to sell their property as a short sale. These conditions are:
a. The home owner is experience a financial hardship.
b. The current value of the property is less than the amount owed to the lender.
If the potential client passes the VAs screening, the agent can spend time explaining the entire short sale process to the client and the steps to be taken.
3.) Preparing the listing documents: Once the homeowner has decided to move forward with a short sale, the VA then prepares the listing documents. This step frees the agent from spending time putting together the required paperwork. Once the paper work is done, the agent can meet with the homeowner to sign them up as a client.
4.) Getting the lender’s short sale requirements: During the first call to the lender the VA can get all the necessary information such as the fax number to send the authorization, the fax number to send the complete short sale packet, the status of the loan and pending foreclosure and so on. Since the lender may not have already received the “Authorization to Release Information” document from the homeowner giving them the authority to speak with the agent and the VA, hence the VA can set up a three-way call whereby the lender gets to speak with the VA while the homeowner is on the line. The VA can be on the phone to do all this, instead of the agent, because it’s usually the same set of questions that each lender will be asked so this can be systemized and delegated to the VA.
5.) Sending in the Authorization to Release information: After the first call to the lender the VA can immediately get this document from the homeowner and send it in to the lender’s designated fax number. The authorization has to state that the homeowner has given both the agent and the VA the authority to talk to the lender on their behalf, its also necessary for the VA to send it in as soon as possible because it takes time for the authorization to take effect with the lender.
6.) Placing the property on the MLS: This step is self explanatory; essentially the VA enters in the listing information into the MLS along with the pictures of the property in order for it to be exposed to buyer for offers. The agent sets the property price at a level that will bring in a flood of buyer quickly, while the VA can takes care of all the time consuming data entry required to list the property on the MLS.
7.) Scheduling showings and following up with potential buyer agents: Assuming the agent listed the property at the right price, it won’t take long for buyer agents to start calling to take their buyers to see the property. The VA can take these calls and give the buyer agent all the necessary information for them to get access to the property. If the property is not vacant, the VA can find out from the homeowner the best time for the buyer agent and their client to come out to see the property. If the selling agent needs to be at the property during the showing, then the VA can make sure that the showing is scheduled at a time that is convenient for all parties. Also the VA can follow up with buyer agents after the showings to get instant feedback from them to see if their client is interested in buying the property.
8.) Preparing and submitting the short sale packet: Once the agent gets a suitable offer from a buyer and the homeowner accepts it, the VA can prepare all the necessary documents required by the lender for the short sale and then send it to the designated fax number. This process can be very time consuming because it is of utmost importance that the complete short sale packet is turned in. Hence it can be a benefit to the agent to know that they don’t have to be bugged down by this task because the VA can handle it.
9.) Following up with the lender once the short sale has been initiated: A couple of days after the short sale packet is submitted the VA can begin the process of regularly calling the lender to find out the status of the short sale. This is a very monotonous process because it involves being on hold for quite some time until someone picks up the phone. When this happens the VA can then transfer the call to the agent to find out the current status of the short sale. The initial follow up process continues for another period of time until the lender assigns a Loss Mitigation officer to the case. It is at this point that the agent actually begins the negotiation process. The loss mitigator then orders a Broker Price Opinion (BPO) to determine the value of the property and establish the amount the lender is willing to net as a result of the short sale. The entire short sale negotiation process can take typically between one month to four months (or more) depending on the lender hence the VA can handle all the follow up calls so the agents only gets on the calls once someone representing the lender is available.
The most productive activities for agents is getting new listings, negotiating contracts and closing transactions. As a short sale specialist two additional activities needs to be added to the three above which is ethically influencing the BPO so that the final value reflects the the current value of the property and also negotiating with the loss mitigator to approve the short sale in a timely manner in order for the buyer to close on the deal. Everything else in the short sale process should be delegated to the Virtual Assistant. By dividing the short sale process into those task that are most important and those that the VA can handle, it allows the agent to focus on what matters most – developing a track record as the “go to” agent for getting short sale negotiated and approved successfully.
Published on March 20, 2010
by Owen McGab Enaohwo