This is a question that comes up often. There is really not much different than taking a regular listing except that it takes longer (and more of your time and energy), you've got an extra party to deal with (that isn't really helpful), and you've got to get personal about your client's financial situation that you cannot pass on to a lender. You do NOT need a short sale "expert" (or specialty short sale company) to handle your short sale. Really. You can do this on your own. If it's your first, just be honest with your client.
What to do first? Find out if you're clients want to stay in the house or if they're wanting to let the home go. This is important. There are lots of options for people that want to stay in their homes and you wan to make sure they've exausted all of them before you take the listing. If they're ready to move, are they really ready? Will they do the work it's going to take to get the place sold (fill out and obtain the lender required documents, show the property as needed, sign offers, etc.).
Short sale commissions are all over the place. I personally believe I give great service and especially with the time and energy involved with a short sale I charge 7% in most cases. The lenders will typically draw a line in the sand at 6% (it used to be lower). Few agents want to deal with the headache of a short sale (on either the buying or selling side) so if you're offering a low commission to the buyers agent are you really creating a draw to your short sale listing? Not so much. No reason to add to the market time by having a low commission.
If you're client is ready to let it go be sure they are aware this process will take some time (hopefully less time after 4/5/2010). Give them the additional disclosures offered by OREF (Short Sale Summary and a blank copy of the Short Sale Addendum) in addition to the traditional listing documents. Obtain a copy of the loan document - at least the current mortgage statement with the account number(s) and contact numbers. They are likely already delinquent so get copies of any letters they've received (it will have helpful contact information and maybe even information about how to do a short sale with this particular lender). Have the client(s) sign a third party authorization form (just a letter from the borrower/client stating that you've been given the authority to talk to the lender about their account). If it has not already been done request the "short sale packet" from the lender. Some lenders don't have a packet, just a laundry list of things they want (bank statements, pay stubs, tax returns, a budget, a hardship letter, etc).
So the fun part. You will need to dig into this packet of financial stuff with your client to be sure you have a completed packet to submit to the lender. You will need to know what a budget looks like if the lender didn't provide a form. You may need to explain to them what a hardship letter is and ensure it has all of the components that a lender will want to know (they lost their job, reduction in pay, medical issues, divorce, whatever and how it makes it that they cannot now or into the future pay their mortgage). Depending on the number of loans being affected and the lenders being affected you will need to figure out who to send a completed packet to. Some companies make it really easy, others not so much. We're hoping that after 4/5/10 that it will be more clear and the process more streamlined, but for now you might need to become an investigator. Get the 3rd party authorization form off right away so you can being figuring this out.
Once you send off the 3rd party authorization (at least 3-4 business days later) call the lender and be sure they got it. Then start asking questions. Ask them what their particular process is from start to finish. Get any contact numbers you can and record EVERY contact you make with the lender - date/time, the phone number, their name/id, fax number, email and what they've told you. The stories will change as you go along so you want to be sure your file is well documented with who said what when.
Often lenders want the home listed for 90 days before they will consider a short sale. If the borrower/seller has been making payments all along it's going to be hard for the lender to agree to a short sale - why would they as they're making the payments. It is not your place to consult them on that topic, but it's a reality you should be aware of when taking the listing. Don't start the listing low as the lenders will want to see that an effort was made to get market value, then show the progression to the price that brought in the offer. You may need to provide the documentation to show how you came up with the listing price (copy of the CMA).
Some lenders will not allow you to submit the packet before having an offer. Others encourage you to submit the packet before an offer comes in. Some lenders want all offers, others only want the "best" offer (which isn't always possible because you can have in the only offer and then you get a new offer that is $5k-$10k more in two weeks... after you've already submitted the initial offer that took months to get). Again, with the new processes going into affect 4/5/10 it will hopefully be easier for 85% of the short sales.
Some lenders are moving their processes for the short sales to the same systems they use for REO's. With Bank of America for example, you can use Equator.com and start the short sale process right on line. You claim the listing (report yourself as the listing agent), submit the 3rd party authorization, they contact the borrower/seller and things move forward from there. You can then upload all of your documents online instead of trying to figure out what fax number it needs to go to. We hope to see more of this kind of system with other lenders... especially after 4/5/10.
If you've not already started, you need to take on short sale listings. Do not run. Do not hide. Learn and make money. If you've done listings, you can do a short sale. It will take some extra time and patience, but just do it. If you do half a dozen of them and you still hate them, continue doing them anyway. It's about 1/3 the business that's out there and the process is getting easier.
Take as many classes as you can about short sales, read what you can, and ask lots of questions from people that know what their doing. Once you get going you'll see it's not this big ugly beast - it's just one more thing that you as an agent do for your clients.
You can do this.
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