By: Dean Edelson
The key to successful short sale approval is knowing how to negotiate with loss
mitigators. Most new investors and Realtors are inexperienced when it comes to
negotiating with the banks. Here are three of the biggest mistakes they make when
talking with lenders:
The first mistake is submitting an incomplete short sale offer and package to the bank. If you don’t get the bank what they need and require from the seller or homeowner, most likely you won’t even get to talk to a loss mitigator. Banks will rarely call you to tell you that you’re offer is incomplete, so make sure you get it right from the start. A complete short sale offer includes a cover letter, purchase contract, preliminary HUD1 settlement statement, hardship letter, 2 current bank statements, 2 current pay stubs or proof of income, and 2 latest tax returns.
Don’t send any extra documents on initial submission. They’ll only get tossed in the
garbage.Save any repair estimates, BPO valuations, appraisals, crime reports, or
anything extra. Save these types of documents for leverage later on when you counter offer the bank.
The second biggest mistake new short sale investors, Realtors, and negotiators make is lack of follow up. If you fax your short sale package to the bank and wait for the bank to respond or call you to tell you they received it, you’re going to grow cobwebs. This is definitely a case where “the squeaky wheel” will get the attention. So call and follow up often. This alone will move your file to the front of the line.
The third biggest mistake is settling for “no” and “your offer is too low” as the bank’s
response to your offer. Most investors and Realtors accept these responses and give the bank what they want. Keep in mind…no is a detour to yes. “No” in most cases is the bank asking you to counter offer. Never take ‘no’ personally. It’s business. If you do your due diligence, know your market values, know the issues with the house, and can substantiate your offer, then you’re in a position of great leverage and strength to counter at the price you’re willing to pay.
What are your thoughts? Feel free to comment below! Talk soon!
No related posts.