Finding a company to do short sales is easy, but be warned that there are a number of scams in this field. In the October, 2007 issue of Florida Realtor magazine, a number of “foreclosure scams” are detailed in the article “Whose Behind the Smiling Face?” Among them:
1) Ensure that the sole service of the company is Loss Mitigation.
2) See if they have a referral network of other professionals they work with.
3) Where does the company’s focus lie? Are they just in it for money for themselves are they focused on helping those who really need their help? An ethical company will have the desire to make you as the realtor a “Hero to your homeowners.” And most importantly of all the primary mission of the company will be to save homeowners from foreclosure and get a fresh start in life.
4) Ask the company if there are any other alternatives besides a short sale. A morally-sound company will help you explore other foreclosure-stopping alternatives besides just a short sale.
5) Does the company require your homeowner to deed their house to a trust? If they do understand why to the fullest extent.
6) Will the company let you and your homeowner see the HUD? Will they tell you exactly how much they stand to make or will they tell you “it depends.” (An ethical company will disclose all fees in advance, will put everything in writing, and will let both you and your homeowners examine all short sale documents at any time).
7) How will the company keep you informed during the long process? Will they give you a way to track your file’s progress as it progresses?
Will the company fight for your homeowner to get a Waiver of Deficiency or Satisfaction of Mortgage? If the homeowner’s lenders don’t agree to such a request, then your homeowner could end up still owing the difference between the short sale proceeds and the balance of the mortgage(s). The result, your homeowner really didn’t benefit from the short sale at all!. (An ethical company will make it the purchase contract contingent upon all lien-holders agreeing to provide a Waiver or Satisfaction. Yes, it will make the loss mitigations more difficult for them, but to do anything less would be a disservice to the homeowner).
9) An ethical company will admit that there are no guarantees. And a better one will tell you WHY sometimes deals don’t work out and what they are doing differently to continually improve. The market constantly changes, your loss mitigation company must be able to adapt to the ever-changing lender requirements.
10) Examine the company’s website. It’s hard for a tiger to hide his stripes. When you look at their website, it will become pretty evident where their focus lies. If they are really about helping others, the site will be more focused on providing information and solutions versus just about making money.
These are just a few of the questions you might ask, if you interview a company to handle your Loss Mitigation negotiations. No matter who you work with, hopefully you now understand that while it’s true that “Anyone can do a short sale,” it’s the smart realtors who don’t “do short sales” on their own, but instead add a Negotiations Specialist to their team to “do” it for them!