Fairfax VA – I always find it interesting to watch a situation from the other party’s point of view. I find that when you fully grasp their mindset, you increase your odds of a successful negotiation. So today, I’m going to talk about the mindset of loan companies during a short sale.
In my opinion, lenders craft their short sale policies simply to avoid mistakes. Here is an instance of what they would believe is a mistake. A short sale gets accepted. After closing, the lender finds out that the buyer “flipped” the house for a profit.
The supervisor might chew out an employee. “That guy just gained $20,000. We don’t pay you a good salary to make these kind of mistakes”, they inform the worker. Each time something undesirable happens, they tighten up their procedures. Less and less short sales get authorized.
(I know from past experience that most approved short sales minimize 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 loan companies use to value the property.) They should look at a BPO and say, “Ok, the BPO says the property is really worth X. That indicates we should approve or reject the short sale primarily based on a worth of X.”
Instead of doing that, they have whole 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 persists.
Good buyers who wish to obtain the house lose interest. They cancel their agreements and invest in another residence. Most of the time, the residence is foreclosed upon and sells for even less money as a bank owned sale. Lenders reject short sales they should accept because one document is missing.
They are attempting to keep away from a potential “mistake.” Sure, they can stay away from that mistake. But, they risk making another, even bigger, “error” when the residence is foreclosed upon and sells for less money. As you can see, the short sale process is complex.
If you are researching a short sale, then make sure you hire a representative who fully understands how it operates. If your representative is aware of how lenders think, then you will have a greater opportunity of good results.
Are you serious in selling your Fairfax VA area home as a short sale? Call me at (703) 322-0600 for a free consultation. When you call, I will describe how the Fairfax VA area short sale process works in detail and answer any questions you may have. Visit my website to discover how other home sellers successfully completed a short sale and request a free consultation.
Thinking about a loan modification? Our Fairfax loan modification kit has the instructions you will need to get a loan modification approved with your lender.
Many thanks for reading this, Thierry Roche.
Thierry is a Real Estate Agent at RE/MAX Premier, and Host of Talk Radio’s, ‘Inside Real Estate’
Phone: (703) 322-0600
Thierry Roche specializes in loan modifications and short sales in Fairfax Virginia. Fairfax Loan Modification Help. Fairfax Short Sales. Fairfax Short Sale Realtor. Fairfax County Short Sale Realtor. Fairfax VA Short Sales.
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