Chicago IL – I always find it interesting to view a situation from the other party’s point of view. I find that when you understand their mindset, you increase your odds of a successful negotiation. So today, I’m going to discuss the mindset of lenders during a short sale.
In my opinion, lenders craft their short sale policies simply to avoid mistakes. Here is an example of what they would think of a mistake. A short sale gets approved. After closing, they lender finds out that the buyer “flipped” the property for a profit.
The supervisor might chew out an employee. “That guy just made $20,000. We don’t pay you a good salary to make these kind of mistakes”, they tell the employee. Each time something bad happens, they tighten up their policies. Less and less short sales get approved.
(I know from past experience that most approved short sales reduce lender’s losses. Not every single one, but 80-90% do.)
One lender had a month long BPO review process. (A BPO is the Opinion of Value that the lenders use to value the property.) They should look at a BPO and say, “Ok, the BPO says the property is worth X. That means we should approve or deny the short sale based on a value of X.”
Instead of doing that, they have entire departments that “review” these BPOs for accuracy. In my opinion, they are not “reviewing” them. They are only second guessing them. The end result of a policy that takes a month to “review” a BPO is that the short sale process drags out.
Good buyers who want to buy the house lose interest. They cancel their contracts and buy another house. Most of the time, the house is foreclosed upon and sells for even less money as a bank owned sale. Lenders turn down short sales they should approve because one document is missing.
They are trying to avoid a potential “mistake.” Sure, they can avoid that mistake. But, they risk making another, even bigger, “mistake” when the house is foreclosed upon and sells for less money. As you can see, the short sale process is complicated.
If you are researching a short sale, then make sure you hire an agent who understands how it works. If your agent knows how lenders think, then you will have a better chance of success.
Are you interested in selling your property as a short sale? Call me at (312) 953-6725 for a free consultation. When you call, I will explain how the process works in detail and answer any questions you may have. Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Chicago loan modification kit has the instructions you will need to get a loan modification approved with your lender.
Thanks for reading this, Phil Buoscio.
Phil is a Real Estate Agent at Better Living Realty – Buoscio Brokerage, Inc..
Phone: (312) 953-6725. email@example.com.
Phil Buoscio specializes in loan modifications and short sales in Chicago Illinois. Chicago Loan Modification Help. Chicago Short Sales. Chicago Short Sale Realtor. ChicagolandShort Sale Realtor. Chicago IL Short Sales.
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