In the past 3 years I have successfully negotiated and closed hundreds of Short Sales.  Over the course of this time I have learned several things which if you are embarking on the short sale process you should know.

There is a lot of misinformation out there regarding short sales, the process and the consequences both to ones credit and the taxes owed resulting from the transaction.  Short sale negotiation is definitely not one of the cases where you get what you pay for.  Make sure you align yourself with short sale experts from the listing realtor, to the negotiation specialist to the closing agent.  Each stage of the process requires knowledge and expertise to help achieve a satisfactory result for you *

Most of the people that I negotiate short sales for are not “bad” people.  That is they are not people who bought homes they could never hope to afford with financing they did not deserve under terms that were outrageous.  Most of the people that I encounter were sucked into the black hole of today’s economy.  These are hard working people who pay their bills, have good credit and are responsible members of the community.  People who through no fault of their own find themselves upside down in  homes  they can no longer afford to keep.   I cannot tell you how many people come to me in tears regarding their situation not knowing where to turn for answers.*

Yes banks make unsound business decisions concerning short sales every day.  Case in point: a homeowner received a short sale offer of $300,000.00 (cash I might add).  the bank in questions refused the offer and later foreclosed on the home and sold it for $203,000.00 to the same party who had made the $300,000.00 offer.  Another case in point: a homeowner asked the bank, which held a third mortgage on her home to consider releasing her home from the third mortgage so she could short sale the home. The third mortgage refused to release the property and later foreclosed on the home.  The third mortgage holder now owns the home worth approximately $150,000.00  and they owe the first and second mortgage holders $369,000.00+ which must be satisfied or negotiated down in order for them to be able to sell the property.  Another case occurred when the bank was foreclosing and the homeowners father agreed to payoff the mortgage in order to save his sons credit.  As the foreclosure process had been started it was necessary to contact the bank’s attorneys in order to obtain a payoff letter.  When the payoff was received it contained $11,000.00 in attorney fees and costs.  The father agreed to payoff the mortgage of approximately $250,000 (even though the home was only worth $150,000) but not the attorney fees.  The attorneys said no.  When the father called the bank directly they referred him back to the attorneys. He did not payoff the loan and the bank foreclosed.  The bottom line here is obviously no one with responsibility for the banks bottom line was making these decisions.  It is imperative in short sale negotiations to get to the responsible party.  This is easier said than done as banks are cloaked in several layers of personnel.  Just try calling the 1-800 number for any bank and asking for the CEO.*