Today we will discuss just for a bit one of the most vital parts of a short sale and where most transactions are won or lost. The HUD and how it's prepared and by who. When dealing with short sale you need to be sure that you have a reliable team in place. This means an escrow company that understands short sales and the hurry up and wait pace that they can take.

     What I mean is first your escrow company should be able to provide you an updated HUD within 30minutes to an hour at the most. That means the very first time and any additional time that changes are requested your escrow should be able to provide you with those changes to the HUD quick.

     Your escrow must understand that the bank does not pay a lot of the junk fees that sometimes are thrown in on a HUD by both escrow and title and must be willing to negotiate their fees to be willing to cut them if the lender so request it. This is of vital importance.

     Your escrow must be willing to not charge a buyer if a transaction is cancelled and a deposit is returned because a buyer has changed their mind. This is also important because a buyer must put a deposit in to escrow but know that if for some reason the transaction does not work out for them that their deposit is safe and free of any fees as long as they have acted in good faith.

     Your HUD must be clear and always have the buyers and sellers names on it clearly printed on it. It should also clearly have the name or names of all the agents and or brokerage companies involved in the transaction.

     Your HUD should have money allocated to all lenders and clearly define where the money is coming from and who is getting what net. This is EXTREMELY important because if anything is missed you will have to go back and get your deal re-approved by the lender.

     Your HUD is for negotiation purposes and always should be submitted with 10k for the second lender and 5k to the third and 3k to any additional lender and your file should be submitted only to the first mortgage first for negotiation and approval. We will discuss why in a later post. If anyone has questions before then please don't hesitate to contact me with them at any time.

     Your HUD should include the starting amounts I mentioned for the Jr. lenders always sometimes they'll be approved and most of the times they won't but having them in the initial HUD in the initial short sale package will insure that the first is aware of the other lenders and gives you a starting point to negotiate.

     Your HUD should always be correct when it comes to taxes/HOA dues/outstanding liens. You must work with a title company and escrow company that know how to make sure that nothing is missed before submitting for negotiations. This will insure that you don't have the whole deal blow up at the end.

     Your escrow should always include an amount for termite if you didn't happen to get a termite inspection before submitting your package to the lender. You should always get a termite report before submitting to the lender. Again this is to insure that nothing is missed and gives you a starting point of negotiations. $2,500 is a good amount to start at for termite.

     Your HUD should include any and all cost of repairs that you think might be needed to get the transaction closed. This means get contractors to get you bids and include them in your HUDS.  Also make sure to include any city laws or rules or codes that state if a property must be repaired before close of escrow may happen. This will let the lender know that regardless they will be paying for these repairs either now during the short sale or later when they have the property as an REO.

     Your HUD will make or break your transaction and your escrow and Title Company will either help or hurt you. So please work only with people who are experienced in short sales and are willing to do the extra work it takes to insure that a deal closes with the least problems possible. If you'd like to know who I use just shoot me a message and or an email and I'll be happy to send you their info. I'm not promoting to use my preferred escrow and title people just telling you the escrow officer who has been great on regular transactions for years for you isn't always the best one to go with when it comes to short sale transactions. Also the title rep that you've been friends with for years may not be the best person to help you protect yourself during short sale transactions.

P.S.  Always work with escrows that are willing to reword a HUD and make it fit what a lender wants. Sometimes escrow companies are set in their own ways and don't want to meet what a lender is asking for because they don't understand it. The escrow should be willing to do what needs to be done even if they think it's crazy or doesn't make sense.

P.S.S. Don't is swindled out of your commissions by negotiators or attorneys charging huge fees to get your deals approved. We chart a flat fee of $795 per transaction regardless how many lenders are involved and regardless what is the list price. If you don't close you don't pay. Also we will do no cost in office training for your entire office or teem at no cost. We will be there to help from before listing to after close. All, at no cost. The other thing I've noticed is too many coaching companies getting in agents and brokers pockets to teach things that are basic and should be part of the negotiation help provided when hired to negotiate a transaction. See the better we get you at short sales the easier our job is.

Guillermo Serafin

Asset Management & Liquidation Solutions, INC.

DRE: 01900987

Toll Free: 855-GET-AMLS

Fax: 866-408-0563

Email:  g@amlsonline.com