OUR SHORT SALE PROCESS Dear Real Estate Professional: As agents have different methods of handling short sales, we would like to acquaint you our process. We have two paths we typically take. METHOD A – our typical short sale process: Stage 1: * We receive one or more offers.  * All are presented to the seller as they are received.  * At least one is negotiated in writing using a Russell Shaw form similar to the Multiple Counter form.  We have it here for your information.  Any terms negotiated with the buyer and seller are placed on “Addendum #1” simply due to space constraints on our form.  Both buyer and seller sign this form once.  * Then the offer along with an estimated Hud-1 is submitted to the lender for review. * The property remains active as the contract is not fully executed until the seller signs a second time.   Therefore, this is in compliance with ARMLS rules. * Any other offers received are presented and held until completion of stage 2. Stage 2: * Loss mitigator is assigned * BPO’s are obtained by the lender(s). * Once the bank has completed the BPO and is ready to make decisions, we will check in with all buyer agents that have submitted offers to determine if their buyer has withdrawn.  Any buyers still remaining are asked for their highest and best offer.  * Once highest and best has been determined; we submit the highest and best to the lender(s) in writing for final approval. During stage one and stage two of the short sale process, the property remains active and we continue to receive and present all offers to the seller. Stage 3: * The property goes off the market (TOM).  Should the highest and best offer withdraw, the second highest remaining buyer is put in writing and submitted, and so on. * We now wait for the submitted final offer to receive the agreement notice from the lender(s). * Once we receive the agreement notice and all parties accept in writing, we move into a traditional escrow with the MLS status then being updated to pending.   Why we use this process: This process may be different from what most other agents do, but we have found it effective in giving all buyers a chance to purchase the home while minimizing the loss to the bank and seller.  Additionally, it creates a level playing field between seller and buyer, as per the AAR short sale addendum the buyer has the right to withdraw anytime prior to bank approval.  If the seller fully executes an offer they cannot remain active per ARMLS rules and yet the buyer can unilaterally withdraw.  The intent of our process is to not bind with a buyer who is not binding to us.  Sadly we have found very few buyers who wait the time necessary to obtain bank approval without withdrawal, which hurts a seller if they have removed themselves from the market and foreclosure is looming. With this process the buyers who are willing to wait through these stages have an opportunity to put their best foot forward in competition against real buyers (not buyers who submit only to withdraw in a few weeks).  Often the patient buyer simply wins through attrition. METHOD B or “Non Refundable Earnest Money” method: * For buyers who wish to bind with our seller (be in “1^st position”) * For homes where one or more loans are Countrywide/ BofA loans Stage 1: * We receive and negotiate an acceptable offer.  * The offer is negotiated using a Russell Shaw form similar to the Multiple Counter Offer form.  We have it here for your information.  Terms are negotiated with the buyer and seller and placed on “Addendum #1”, simply due to space constraints on our form.  Both buyer and seller sign this form once.  * Earnest money is deposited by Buyer agent at the title company. * Then the offer along with an estimated Hud-1 is submitted to the lender for review. * The property is placed into “TOM” status in MLS until we receive the agreement notice(s). * Any subsequent offers are then held in back-up position and are not presented to the lender(s) unless the buyer withdraws. Stage 2: * Loss mitigator is assigned * BPO’s are obtained by the lender(s) During stage one and stage two of the short sale process, the property remains TOM and any offers received are presented as “back up offers” to the seller only.  They are not submitted to the lender.. Stage 3: * Waiting for counter or the agreement notice from the lender(s). * Once we receive the agreement notice and all parties accept in writing, we move into a traditional escrow with the MLS status then updated to pending. Why we use this process: For buyers who wish to bind with our seller, you have the option of presenting an offer with non- refundable earnest money.  Some sellers are agreeable to this option, some are not - we cannot guarantee that the seller will accept any offer submitted with these terms.  But, it is an option!  On Countrywide/ BofA loans – this is our preferred method.  We have found it to be most effective due to this lender’s inefficient system of closing a file if another offer is submitted.  On short sales involving one or more loans with BofA, we do bind early on with a single buyer and remove the home from the market. In these scenarios, if the parties agree, the earnest money is made non-refundable during the waiting process for the bank to issue an agreement notice.  Once the bank gives the agreement notice, the earnest money is refundable to the buyer if the agreement notice does not match the terms of the contract, or in the event of an unacceptable home inspection, etc. Click here to see the non refundable language.