Often short sale sellers and short sale buyers get confused about “how many cooks are there in the kitchen”.
· A buyer can’t understand how they write a full price offer on a home and yet 60 days later the bank counters above the list price.
· Or, a seller who was told that the short sale was approved by the bank (servicer) and then 30 days later FNMA the “Investor” denies it.
· Sometimes the listing agent tells the buyer’s agent that the short sale was approved with certain terms and after the buyer writes that offer, the bank comes back with completely different terms.
· Another common issue is that the servicer tells the seller that they will get full deficiency release but a week later, the Mortgage insurance company refuses to close without a seller signed promissory note.
· The biggest concern is why are all of these issues taking SO LONG to come to the surface.
As illustrated on this chart. Bank of America, like many servicers are agents to an investor and sometimes to a mortgage insurance company. So the Servicer is not a principal but a middle person. Much like the listing Realtor is a middle person to the seller, the buyer’s agent, buyer’s lender and the buyer.
Step1. The listing agent and the Servicer, like Bank of America, try to broker a deal that all parties can agree to, sometimes even before they have an offer. We do this through negotiations where both agent and servicer present cases on what each of the terms should be and why.
Step2. Once that is agreed upon, the listing agent offers those terms to the buyer’s agent and the seller. If countered, the servicer and listing agent negotiate another settlement. Once agreed by the servicer, seller and buyer.
Step3. Servicer sends the approval to the investor and/or mortgage insurance company
Step 3B. If there is more than one lien/loan on the home, the listing agent will simultaneously negotiate that file as well.
Step 4. Investor will accept, deny or counter the file. Each of these outcomes requires further negotiation. Even an acceptance by the investor may still need negotiation if the terms are unreasonable to the seller. More negotiation is often needed at this phase.
Step 5 once approval is agreed upon, the buyer gets his/her financing and as long as the home appraises, the sale should be fine.
It is critical that the realtor negotiating the short sale has a clear understanding of the process and the parties of the transaction. That realtor has to have a track record of closing short sales. Ask for references and proof that the realtor has closed dozens of short sale before listing your home with them or writing an offer on their short sale listing
Mike Sher
Max Broock Realtors
248 496-1572
2010 results: 75 units sold, over $10,000,000,00 in sales and 365 days of FOCUS!
The Mike Realtor Team sells Homes in Bloomfield, Birmingham, Beverly Hills, Farmington, West Bloomfield. Rochester, Troy, Novi, Huntington Woods, Royal Oak & Auburn Hills. Call us at (248) 644-4700 X 242 or check us out at www.ShortSaleOaklandCounty.com or www.mikerealtor.com Mik
the CDPE designation and lists 
making payments it is a worse idea. In short sales, time is not on your side. So why not try and make some headway with banks before you have an offer. Perhaps the seller can go HAFA (Home Affordable Foreclosure Avoidance) program. This program offers full deficiency release, $3000 seller moving allowance and once approved, the bank is able to make a decision 10 days after they get an offer. Why not try. Sadly, some agents would rather wait to get a buyer before they start the 
