You Cannot Squeeze Blood from a Turnip
We all know that short sale processing can be very frustrating. It’s often tough to get bank employees to acknowledge that they have your documentation. It’s even tougher to get many of them to respond to your emails and phone messages. One key to a successful short sale is to acknowledge that you cannot squeeze blood from a turnip.
What I mean by this is that the short sale listing agent (or short sale processor) must recognize when there is room to negotiate or take a stand (when blood can be squeezed). The same short sale listing agent must also recognize when there is no blood to be squeezed: when one must work the bank’s systems in order to obtain short sale approval.
Here are two examples of dicey short sale situations:
- Questionable Hardship. Many short sale lenders have guidelines with respect to hardship. Some lenders want to see a verifiable hardship because they are not permitted to accept or approve a short sale without a hardship, default, or imminent default. Often times these lenders are simply servicers that are working through their checklist to see whether the borrower’s package meets their guidelines for approval. If the lender tells you that the borrower does not meet the hardship guidelines (perhaps because s/he is current on payments) and the borrower’s information is accurate, there is little to nothing you can do to get that short sale through the system. Instead of prodding, simply ask the negotiator: Is there anything that we can do differently in order to get this short sale approved? (If there is, then you will be told.)
- Extensions on Approval Letters. Given the current loan guidelines for buyers’ loans, it is sometimes difficult to calculate the closing date with certainty. As such, it is not uncommon for short sale approval letters to expire and extensions on those approval letters to be requested. However, the short sale lender is not required to generate an extension (usually they do). And, often times, the lender/servicer needs to petition the investor in order to obtain the extension. This process takes time. Even if loan documents are signed and the buyer is ready to close, the speed with which the short sale lender works may not speed up. This is one of those times where there is little that you can do. Be patient. Instead of calling the negotiator daily (which is an empty task), simply ask: Exactly how long do you think it will take to obtain the extension? (If s/he knows, they’ll tell you.)
Both of the situations described above can be very frustrating for agents working short sales. But, they are just part and parcel of the short sale process. When a difficult situation arises, consider whether blood can be squeezed from the turnip. And, instead of fixating on glitches, use the extra time you would ordinarily spend worrying about the short sale to take another short sale listing and grow your short sale pipeline. After all, we are in for a few more years of this wacky short sale biz.