The ART of Short Sale Negotiation in Massachusetts and New Hampshire

The ART of Short Sale Negotiation in Massachusetts and New Hampshire


So, I’ve had SO many people ask us how we get all the approvals we get? I’d like to say we have it down to a science, or a special protocol for every sale, but to be truthful, each sale approach is different. I guess the one thing I’d advise anyone doing short sale negotiation would be to make sure you do your research up front! By that I mean, pull title, research the investor of all the loans, have a LONG conversation with the homeowner, find out their story, are their assets, etc. You can’t approach a traditional sale, and a FHA sale the same way. Knowing what type of sale you have will help you with how to attack it.

• I usually know at the beginning of a sale whether or not a homeowner will need to pay a cash contribution or have to sign a promissory note, but I prep every homeowner that that could be a possibility. We also address that in our contracts. I’ve also seen every reason why a sale could or would fall through, and we also try to address those issues in our contracts.

• I think being well prepared and well informed will help you negotiate the sale. The days of getting great lowball prices are over. Anyone dealing with a Fannie or Freddie backed property these days knows a great deal about over inflated values. Freddie and Fannie are trying to recoup and they are winning. Prepping a buyer WAY ahead of time that it’s likely their offer will be countered UP will save you in the long run.

• Short sale negotiation is not for the faint of heart. It’s long, tiring, cumbersome, and paperwork ridden, but if done well, will give you great satisfaction.

Knowing that the lender’s goal and the buyer’s goal are inherently different, will also help you facilitate a plan. The true accomplishment is to TRY to get everyone to meet in the middle and come to an agreement.

Be prepared that secondary lien holders can give you even more of a headache than the primary decision maker if they want more money and be prepared to have the buyers or sellers contribute to Jr. Lien holders to get the sale done.

• No two sales are alike, therefore the same approach to every sale won’t work. YOU MUST BE FLEXIBLE and understand that wanting to kill the bank’s negotiator isn’t going to solve any issues. Julie, Liz, Nick and I have all had to bite our tongues and sit back to digest a phone call. Sometimes it’s extremely hard to see what the lender needs when you have facts in front of you that completely contradict what the negotiator wants. It’s your job to get to that middle ground that everyone can live with.

Be realistic with your expectations. It’s not normal to get a short sale approved in 30 days. It’s NORMAL to see an approval from 60-90 days, OR LONGER if it is an FHA loan. Understand there are a lot of moving parts. You should be negotiating all liens at once, and NOT one at a time. If you can’t get to a price that everyone can live with, you have to relist the property and try to attempt to get a higher offer. It may take time, but you have a duty to your seller to try.

Work with a reputable attorney, preferably one that has closed LOTS of short sales, as I can’t tell you how many times we’ve had sales unwind because an attorney didn’t follow instructions on an approval letter. YOU CAN’T CHANGE A FINAL HUD without having to go through re-approval.

• Know who the BPO agent/Appraiser is, by pulling their license, making sure it’s active, making sure they don’t list a LOT of REO’s which could be considered a conflict of interest. Have them bring a photo ID to the appointment. We’ve run into a lot of “picture takers” who weren’t necessarily doing the valuation end of things.

My biggest tip is COMMUNICATE COMMUNICATE COMMUNICATE! You can’t leave buyer’s agents out of the loop. They should get weekly updates, even better, do 72 hour updates, EVEN if nothing has changed.
Short sales are still a strong part of the Massachusetts / New Hampshire market, and being educated will eliminate a lot of headaches. The reason we’ve closed so many and have such a high success rate is because we’ve seen the difficult side of short sales. A short sale is not an easy process, but many of the homes are well worth the wait for the right buyer.

Maryann Little, VP Short Sale Mitigation
New Hampshire Short Sale
Massachusetts Short Sale

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