Friday, November 5, 2010

New Florida Short Sale Addendum - What Were They Thinking?




What were the Florida Realtors and Florida BAR thinking when they came up with the new Florida short sale addendum to the purchase and sale agreement? Granted, some of the addendum is an improvement, with a default 90 – 120 days for short sale approval. But here is the paragraph that gives me pause:

"Status of Short Sale Approval Application. Seller hereby authorizes Seller’s Lender to provide Buyer and Buyer’s Broker and Closing Agent with information stating the status of Seller’s application for approval of a Short Sale..."

Let’s dissect this.

•The Seller "authorizes” the Seller’s lender to provide "information”. Just how is this information provided? Obviously, the Buyer or the Buyer’s Broker would have to call the Seller’s lender. Therefore, they would need the seller’s loan number, current mailing address, telephone number, possibly the entire social security number and a password to "verify” they are "authorized” on the account.
How many of your short sale sellers want to give multiple unknown parties their confidential information? It’s a big enough decision for a short sale seller to pick and trust a Florida listing broker to handle their short sale. Now, the Florida Realtors and Florida BAR want to blanket "authorize” the Buyer and Buyer’s Broker?

If such an authorization is issued (not by any of my sellers), how is the lender to know that they are to "only” provide the "status” of the short sale? What exactly does that mean? Does it mean the lender is allowed to say, "the file is in review” or does it mean they divulge "the seller’s medical illness needs a doctor’s statement” or other highly personal data? This is a bit intrusive, is it not?

Lastly, how would the short sale lender know to "limit” authorization of a third party? How many of the thousands of clerks who answer the phone know these limits? What if a Buyer calls and starts "negotiating” terms of the short sale? He is authorized on the loan, right?

It seems to me that the Florida Realtors and Florida BAR went too far with this clause. I suggest they consider a revision.

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

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