Why Short Sales Do Not Close

Short Sales can and are good deals for both the buyer and the seller. The buyer gets a home at a fair deal and the seller is not subjected to a foreclosure on their credit. So, if the situation is one that is a win for both the buyer and the seller then why do so many short sales not close?

The answer is simple...Communicaton and expectation. In my dealings with short sales I have found two keys to getting the short sale offer accepted and the buyer to wait to get that final approval. The first and most simpliest answer is communication. There is nothing worse than not knowing. I rather have an answer that says do not know or have no updates to day for you rather than have nothing communicated to me. I learned early on that if you want your short sale to close you need to be proactive in communicating to the buyer's agent the status of the short sale. It does not have to be daily but at least once a week you should give some kind of communication that they can relay onto their buyer. Without that, buyers tend to waiver and are not sure if the process is moving along as it should. The listing agent can be one of the best at negotiating short sales but if they fail to communicate to the buyer's agent; they are setting themselves up for a cancelled offer.

for example,if you have an offer on a house that is a short sale; weeks go by and maybe months and you have no feedback form the listing agent as to where the offer stands or where the bank is in the process you will begin to think they do not know what they are doing. Or, you may think they are not going to accept your offer. Either way; you begin to look at other properties and maybe place an offer on a different house and rescind your offer on that one. A lot of that anxiety and frustration can be allievated with proper communication between the listing agent and the buyer's agent. A good rule of thumb is at least once a weeek to give an update or at most every two weeks depending on where you are at with the bank in the negotiation process.

The other main reason so many short sales do not end up closing is the expectations of the buyer. They are not properly briefed upfront that the process can take some time. The quickest I have seen a short sale go from start to finish is 30 days to approval. Generally it takes anywhere from 45 days and longer depending on the bank. Some banks have a great system in place that moves the process along rather quickly. Others do not. So, knwoing what bank you are dealing with and the average time frame that bank takes in processing a short sale can and will make the differnce in whether the house will close....

By telling someone you are very good at it but not relaying the bank's average time will do nothing but frustrate the buyer and the buyer's agent. In the end that frustration will lead the buyer to walk away and go to another house.

If you are selling a short sale or buying one make sure the lines of communication between the realtors is open and that the expectations of the buyer are realistic and you will both have a smooth closing that is beneficial to both of you.

Dave diCecco
Realtor/Broker
www.davedicecco.com