<!– /* Font Definitions */ @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:1; mso-generic-font-family:roman; mso-font-format:other; mso-font-pitch:variable; mso-font-signature:0 0 0 0 0 0;} @font-face {font-family:Verdana; panose-1:2 11 6 4 3 5 4 4 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-1593833729 1073750107 16 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”,”serif”; mso-fareast-font-family:”Times New Roman”;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> Commercial and residential short sale opportunities await every qualified investor. However, completing a short sale takes experience, patience and incredible drive. It is a difficult process to bring the primary lender, the secondary lien holders and the seller together to consummate the sale. Surprisingly, the most difficult component can often be keeping the seller in the game.
Experienced investors perform their due diligence. Part of that due diligence should include an assessment, including as much financial background as is available, of the seller. If the short sale seller is not truly motivated, the investor and the investor’s team can go through many hours of effort for naught.
Investors can benefit from a frank interview with the seller before arriving at an agreement. Sellers can be bitter about a short sale and can sometimes actually be benefiting from their hardship. Many sellers are collecting rental income and not making mortgage payments. Be weary of these sellers as their motivation is lacking.
The ideal short seller has assets and very possibly other real estate holdings that are worth protecting or is facing an unexpected hardship such as unemployment and does not want their credit destroyed for an extended period. The investor should seek proof of the hardship.
In conventional acquisitions, the buyer is evaluated by their “ready, willing and able” disposition. This is a good formula to apply to short sellers. If the shirt seller is not ready, willing and able, you could be wasting your time.
Sellers need to know that delays and unexpected events can surround hardship sales. Sellers may need to perform repairs, pay outstanding utility bills and a host of other stressful possibilities. These sellers need to know and often be reminded that concluding the short sale is to their advantage.
To protect themselves, many investors have had their attorneys insert clauses in the contract. If the seller backs out of the agreement without just cause, they must reimburse the seller for lost time. This can raise issues but protecting one’s self is always worth a try.
