Do You Tell The Short Sale Lender "Buyer Walked"?

Karla Leahy started an interesting discussion on http://www.shortsalesuperstars.com/. She asked "Do you inform the short sale lender when you no longer have an offer?"

From what I've seen the thought process behind not divulging the buyer walked is:

1. The lender will complete an appraisal or BPO that will speed up the next approval
2. The seller's pre-qualification may be completed and ready for the next attempt
3. With some lenders, you can sneak in a substitute buyer

Bottom line, it "saves time" for the next buyer, the one you hope closes.
BUT-- IS IT RIGHT TO NOT DISCLOSE THE BUYER WALKED? Why should the short sale system be clogged because you are trying to speed up your next offer? Is it right to allow the lender to continue to work on an approval when there is no longer a contract? Sometimes there is another twist on trying to speed up an approval. "Fake" or "starter" offers are sent in to the lenders to get an appraisal ordered, when the "buyer" has no intention of closing. The "buyer" might even be the real estate agent.

Some of the lenders have a few hundred thousand offers in process. HOW MANY ARE LEGITIMATE OFFERS? The "real" buyers (and the sellers) suffer through longer wait times because others have tried to game the system, "dead" deals are being processed or offers with no hope for approval have been submitted. If lenders were only processing contracts that could actually close, all short sales would be speeded up, right?

So, I ask "Would YOU call the short sale lender and tell them to stop working on the sale if your buyer walked?"

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Destin FL Real Estate

Destin Short Sales

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

Notes From A Short Sale

Notes From A Short Sale
I just had another Destin Florida short sale approved. Following are my notes starting with the most recent going back to the beginning of the Short Sale Approval Process with Countrywide. This might be useful to show buyers' agents and potential buyers to help them understand some of the processes the listing agent goes through to get approval.

7/29/2008 4:22 PM Sara from COUNTRYWIDE Calling she is faxing APPROVAL!
7/29/2008 3:42 PM CALLING COUNTRYWIDE looking for approval letter if hear nothing by Thursday will escalate to team leader...
7/28/2008 2:40 PM CALLING COUNTRYWIDE no update
7/28/2008 11:26 AM CALLING COUNTRYWIDE we said OK on July 24.... no approval letter faxed yet... ? Wendy is following on where it is?? I emailed Sara looking for it, too
7/23/2008 4:52 PM Homeowner said will take promissory note
7/23/2008 4:02 PM Sara from COUNTRYWIDE called usually they try to work with homeowner... with 0% interest rate... $10,000 72 pmts $138.89 beginning OCT 1... 0% interest.... default if payments not received after 10 days... email 167052@countrywide.com ALL APPROVED JUST NEED PROMISSORY NOTE
7/23/2008 12:56 PM CALLING COUNTRYWIDE "Diane" Fannie Mae approval July 11 why taking so long?? On July 2 I was told two weeks ON JULY 21 COUNTRYWIDE received email from TRIAD- FANNIE MAE require a promissory note to be signed... Owed $400,000.... sale price $198,000 NO PAYMENT ARRANGEMENT OR ANYTHING IS NOTED IN THE FILE, rep will email supervisor as ""urgent"
7/22/2008 4:04 PM CALLING COUNTRYWIDE transferring to another department because it's a Fannie Mae loan? Tried to reach... negotiator for me... cannot reach, emailing her again for me... for her to call me
7/21/2008 4:15 PM CALLING COUNTRYWIDE CHRISTINE trying to help me... cannot find any clues...
7/21/2008 2:30 PM CALLING "TAMI" was submitted on July 11 to investors for approval... will try to contact negotiator On July 11, received approval from FANNIE MAE Sara's line is busy will email her....
7/18/2008 12:07 PM CALLING COUNTRYWIDE "Lynette" no dates as to when approval letter will be sent out... she can no longer contact negotiator for me... Got email from selling agent buyer is looking at other houses....
7/17/2008 3:47 PM CALLING COUNTRYWIDE just waiting for approval letter to be sent out...
7/16/2008 5:04 PM CALLING COUNTRYWIDE wrote a memo on July 11, file is under review for "second"
7/15/2008 10:57 AM Calling COUNTRYWIDE "Alicia" for status...no new updates... wants us to refax HUD to 800-658-0395
7/14/2008 1:27 PM Calling COUNTRYWIDE to follow up, faxed them a new HUD this a.m., tried to reach negotiator by phone, will email her for me...
7/14/2008 10:00 AM COUNTRYWIDE says Fannie Mae sent approval Friday with conditions. I am trying to get conditions
7/11/2008 12:10 PM CALLING COUNTRWIDE "Aman" still at the PMI company COUNTRYWIDE checked into it today...
7/8/2008 12:49 PM CALLING COUNTRYWIDE "Sandra" submitted for approval on July 2, went to Fannie Mae/Triad... for approval...
7/3/2008 12:50 PM Calling COUNTRYWIDE to make sure file was sent to PMI company SUBMITTED TO BOTH MORTGAGE COMPANY AND INVESTOR for approval...
7/2/2008 9:55 AM Calling COUNTRYWIDE cuz buyer says he'll walk if no close by July 8I called Countrywide just now. Negotiator cannot guarantee July 8 -need secondary approval from PMI company- which could take 1-2 weeks more. Negotiator said she will get it to PMI company this morning. Negotiator said only needs approval from PMI company! She said 198,000 offer looks good to Countrywide, and they do not need to run this by the end-investor on the loan. I feel it could take three weeks more, but this looks very positive. Negotiator said to advise buyer "everything looks great". Just need authorization from mortgage insurance company.
7/1/2008 2:17 PM CALLING COUNTRYWIDE to check on status again... said previous rep's discussion re: Fannie Mae did not matter?! On June 20, she should have sent file for review to investor, however, no notes on the file as of yesterday.... said negotiator has 3-5 biz days to call me back, Won't know anything until July 7th on the account? Negotiator should be contacting me between Monday and Wednesday of next week....
6/30/2008 2:16 PM Called. said they would email negotiator
6/25/2008 11:12 AM I should call Home Retention division as this is a Fannie Mae type product DIRECT NUMBER1-800-669-6650 FOLLOW up if I don't hear within 2-3 biz days.
6/25/2008 10:57 AM CALLING COUNTRYWIDE showing.. file not reviewed let, passed "confidence test" based on appraisal... looking for assistance on review... REP said he will ESCALATE, sees no reason for delay
6/25/2008 10:06 AM CALLING COUNTRYWIDE got hung up on...
6/20/2008 11:56 AM CALLING COUNTRYWIDE no updates
6/10/2008 12:29 PM CALLING COUNTRYWIDE no updates
6/4/2008 11:33 AM CALLING COUNTRYWIDE negotiator assigned on May 30 Sara Kane negotiator ext 2339 all docs were scanned in May 1, everything there. Need 10-15 biz days to review whole account MAY Get back to me June 13 to June 20
6/4/2008 10:50 AM CALLING HEART TEAM she cannot find receipt of appraisal CONTACT COUNTRYWIDE, this is home retention management....HEART team is only workout, said to call short sale line
5/28/2008 10:23 AM CALLING Countrywide. no negotiator assigned yet. Referred to Heart Team 877-643-2788
5/22/2008 12:24 PM Appraisal came back May 13 may take 15 biz days to assign negotiator
5/8/2008 10:11 AM CALLING Countywide just referred on the 29th no updates until May 29 (still has in 30 day review process)
5/6/2008 11:18 AM Appraisal Company doing appraisal 5/5, Sterling Appraisals LLC...
5/6/2008 11:11 AM CALLING Countrywide, not assigend to a negotiator yet
4/30/2008 10:08 AM Package Recieved.
4/29/2008 2:27 PM Faxed Package to Countrywide
4/28/2008 4:47 PM Called Countrywide to tell them of offer. Sean told me sellers must call to review financials... I am calling back to get new rep, this one was a pain.
4/18/2008 3:20 PM Offer negotiating
4/4/2008 8:34 AM LOA acknowledged
3/25/2008 9:56 AM LOA faxed for #114995265

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Search Destin Florida real estate.
Short Sale Pre Foreclosure Help.

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *NOTES FROM A SHORT SALE* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

Short Sales: For Buyer's Agents

Are you the selling agent in a Short Sale market? Arm yourself with information for a successful transaction:

1. Prepare your buyer by going over steps in Buying Short Sales.
2. Ask the listing agent if he has gathered the information necessary to submit the Short Sale package, including: letter of authorization, financial statement, recent pay stub or last quarter profit and loss, recent bank statement, last year's tax returns, hardship letter, and payoff if more than one lender. If the listing agent has not already done so, prepare the buyer for a longer wait. I would also ask what the hardship is. If the listing agent will divulge that information, it may assist you in determining whether it would be a viable short sale situation. The hardship should be loss of income, medical, divorce, etc. where they might be a reasonable expectation for approval by the lender.
3. Decide with the buyer whether to make the contract effective date, depending on your board of Realtors, the date the seller signs the contract, or the date the offer is finally approved by the seller's lender. The contract effective date is normally the trigger from which other actions are based. For example, if it is customary in your market to conduct inspections within two weeks, your buyer may wish to wait for bank approval before proceeding. Conversely, if the buyer conducts inspections early, that shows strong intent to complete the transaction.
4. Advise the buyer regarding potential valuations of the Short Sale property by the lender. If the buyer is going to make an unreasonable offer that you know may not be approved after several months of waiting, it is better to inform him at the beginning. Look at the property in the eyes of an appraiser. If recent comparable sales don't come close to justifying the buyer's offer, this may not be a transaction worth pursuing, for you, the buyer or the seller.
5. Once the contract is signed by the seller, follow up gently with the listing agent. A call every two weeks to check on the status of the offer with the lender should be enough of a reminder, and should satisfy your buyer's anxiety during the long wait toward approval.

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Sandestin, Santa Rosa Beach, Blue Mountain Beach, Dune Allen, Watercolor, Rosemary Beach, Seaside, Niceville, Bluewater Bay, Freeport, Crestview, Navarre, Fort Walton Beach, Mary Esther, Shalimar and vicinity. Call 1-877-487-9639.

www.ShortSaleForeclosureHelp.com