4. Selling to a flipper. Unless the investor in a flip is prepared to add substantial value by fixing up a property, don’t participate in a flip. Short sale flips benefit only the investor, who’s clipping off money that could go to an already bleeding lender.
5. Shifting funds off the HUD-1. If a junior lien holder or other party to the transaction asks for payment, undisclosed on the HUD-1 statement, as a condition of approving a short sale, say no. That can constitute mortgage fraud.
6. Manipulating the BPO. It’s appropriate to control access to the information that goes into your broker price opinion but not so you can get a house on the market for less than it’s really worth.
The takeaway? The NAR seems to be saying that despite several possible shortcuts to a sale, the real estate agent’s mission is to secure the best deal for its clients. Whether a short sale represents the best deal is an open-ended question.
A giveaway appears elsewhere on the NAR Web site. There, the association takes great pains to steer agents away from short sales, citing the complexities and the potential barriers involved. This from the Web site:
"Limited experience - Many realtors are new to the short sales process; a difficulty which is compounded by many lenders' lack of sufficient and experienced staff to process short sales. Even if the realtors are experienced, most servicers are under-staffed and still not adequately trained, making negotiating a short sale particularly difficult."
And this . . .
"Our members have reported difficulties with: unresponsive lenders; lost documents that require multiple submissions, inaccurate or unrealistic home value assessments, and long processing delays, which cause buyers to walk away.”
If that’s the takeaway for real estate professionals, then it’s definitely food for thought for homeowners — and homebuyers — as well.
Call them an evil necessity or call them a last resort. Either way, short sales may be more trouble than they’re worth — and that sentiment comes from the leading real estate association in the country.
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