I see a number of posts on short sales and it seems that the majority of people doing short sales, collect all these offers and send them to the bank. The other thing I see are agents that try to get approval for a short sale prior to listing or before accepting offers.
In our area, my partner and I list the property 10% below market value (based on the last sold comp and based on the subject property specifics). Based on the sellers criteria of late payments we determine how aggressive we must be in lowering that price to get a solid offer. Once we receive a solid offer that the bank will find attractive, we accept the offer and open escrow. We educate the buyer's agent and hopeful through them the buyer on the process that will be going forward. We usually obtain approval within 5/15 days. We submit a BPO, a hardship letter (you must be able to prove hardship), market analysis of our declining market, 2 pay stubs, 2 bank statements, 2 tax returns and a financial statement for the seller (assets/liabilities/income/expenses). You include the Listing Agreement and all Addenda for a Short Sale and the Purchase Agreement and all Addenda for a Purchase Agreement.
Once you receive the offer, you notify the bank of your intention to send them a complete short sale package. I usually overnight the package....safer than faxing. I then follow-up daily until I am assigned a Loss Mitagator. I then call daily until a BPO is schedule. Once I accept an offer, I take the lock box off, so that I am the main point of contact and can meet the BPO provider at the house. I try to ascertain if their market knowledge will get the job done, and if not I provide my BPO.
Within one week of the BPO, you should get approval. Our shortest approval has been 5 days, with COE in 14 days. We have been successful in all of our short sales to date. We have not done that many....we only want it to be about 15 percent of our business and we interview our clients to make sure we can get it done. There are circumstances where you cannot.
The bank will typically accept 80% of market value for the property. The 10% below market gets your buyer and the other 10% is your commissions and closing costs. We try to keep our sellers from paying any out of pocket costs. They usually do not have money for commissions or closing costs. The banks will accept and approve these short sales.
Also, you should be striving to get back up offers. It is still hard to keep the buyer.
Note: The criteria for determining that we cannot help the seller are based on original purchase money, second lien holders and PMI.