Over the last few weeks I heard quite a few of my fellow realtors in Silicon Valley complaining about the fact that they had put an offer on a short sale property and out of the blue received a phone call a few days or weeks later from the listing agent informing them that the home was sold in auction!
For those of you who experienced this unpleasant event, here are some insights directly gathered from dealing with lenders over the past few years.
Most likely, two different departments of the same lender work on the same file without synchronizing.
Many lenders pay other lenders to service their loans and/or hire subcontractors to handle the auction of the property. As a listing agent, you can end up dealing for one single loan with as many as 7 or 8 distinct interlocutors: the loan modification processor and negotiator; the short sale processor and negotiator, the original investor (when it is not a portfolio loan), the closing officer and the in-house person or the subcontractor in charge of sending the notice of default and selling the home in auction if applicable.
The key task for any Realtor dealing with short sales is to identify all relevant stakeholders and get in touch with them ASAP. The most important step though is to identify the person that has the power and/or the will to help you keep the short sales file on track and take the lead in handling the short sale process.
Is it always doable? No. Even if you escalate the case, call, fax, there is no guaranty that you will finally connect with a person willing or able to help. So, if persistence of real estate agents and the goodwill of at least one of the lender's representatives is not enough, what is to be done to try to avoid the problem?
Here are some tips from my experience as a short sale agent:
- Fight and communicate every day to ensure that the lender won’t send a Notice of Default (aka NOD) to your clients. The reason is simple: if there is no notice of default, there is no auction date.
- Whether or not your clients already received a notice of default, read and know the law. To take an example, I for instance found out that for non-GSE loans (loans not owned by Freddie or Fannie Mae), a servicer is prevented to initiate a foreclosure and/or schedule a foreclosure sale in certain circumstances
It does pay to consult a lawyer when and if you consider short selling your home
- Keep tabs on progress of the double tracking law in preparation from the legislator.
At the end of the day, if you are interested in buying a short sale, make sure your real estate agent knows enough about the short sale process and is able to ask the listing agent the right questions.
© Sophia Delacotte CDPE, SFR, CHS
San Jose Realtor
Cell: (408) 717-2575