The most crucial component of a short sale transaction is having a successful closing. All of our time and compensation is worth more than the potential headaches that can result from neglect during the closing process. Dealing exclusively with short sale closings, I see major differences between conventional closings and short sale closings. As Closing Coordinator at BGS3, I would like to offer a few tips that could help you and your title companies execute a smooth short sale closing:

1. Educate your buyer. Communicate to all parties clear expectations of the entire process as soon as an offer is presented. Be sure the buyer and their agent understand that this is not a typical transaction and that patience is crucial. The buyer should be given a realistic timeframe for how long the short sale process could last.

2. Open escrow as soon as the Purchase & Sales Contract is submitted. The Title Company will then prepare for the closing by ordering title, ordering the appraisal, and contacting the buyer's lender to make sure the buyer is prequalified not simply preapproved. Most lenders will grant up to 30 days to close from the date of the short sale approval. Opening escrow as soon as possible will ensure the buyer's preparation once the short sale approval is received.

3. Maintain communication between your Transaction Coordinator (TC) and their team. Once the short sale approval has been received your TC will contact you to discuss the agreed to terms. Your TC will give you the breakdown of fees that have been approved, the realtor commission, any seller concessions being paid, etc.

4. Make sure your title/escrow company follows the instructions on the approval letter verbatim. The approval letter must be followed exactly as written. Remind your title company that the final HUD must be faxed for approval in the timeframe stipulated on the approval letter. Keep in mind the lender is holding BGS3 accountable for fulfilling all stipulations published in their short sale approval letter.

5. Send your Closing Coordinator a copy of the final HUD prior to the Title Company sending it to the lender for approval. As the processing party throughout the transaction, it is our job to confirm all lender guidelines have been met on the settlement statement since it is ultimately our reputation on the line, should the property fail to close. There can be no changes or additional fees after the fact. If this happens, we run the risk of having the wire rejected and losing the deal. The wire, or certified funds, must be received by the lender along with a signed and certified copy of the final HUD prior to the expiration date indicated on the approval letter. Once all of these stipulations have been met it is safe to say you have had a successful closing.

As a real estate professional working with short sales, you should be committed to assisting homeowners and making the most of their situation. It is imperative that you not only submit clean files to the lender but that you close in the exact same manner. Failure to do so may result in the file being rejected and the homeowner being foreclosed on.