C.A.R News line came out with an article yesterday stating that the Senior Vice President of CITI Mortgage, the mortgage servicing arm of Citigroup, has announced they will be offering borrowers an average $12,000 in incentives to complete a short sale. CITI has a little over 16% of delinquent loans in a short sale program. Adding that has increased from 4% from 2 years ago.
In 2009, CITI offered an average of $1500 to qualified borrowers. In 2010, CITI increased incentives between $3000 and $5000. Present day, $12,000 for 2011.
Not only has CITI reached out to the borrowers instead of waiting for the borrowers situation to get worse and get them involved in their short sale program; Increased the amount of money at the close of escrow to help borrowers get back on their feet, they have also streamlined there short sale process. In 2009 the process was an average of 120 days from the listing to close. The average turn time in 2011 is 83 days.
I wanted to lay this out for those who did not read the article and explain how some of this can be misunderstood and can cause one to give misleading information to the borrowers but in the same return, may be a great way to encourage a borrower to take action.
As a short sale negotiator I see a lot of different programs out there banks are trying to implement. But keep in mind that there is still a pre qualification process.
To ensure the following:
a) Borrower is eligible to be in the short sale program
b) Receives the $12,000 incentive
c) Turn time of 83 days
The following needs to take place:
1. Borrower has to be pre qualified and fit the parameters of a short sale with proper expectations set.
2. Short sale has to meet the NET requirements the bank is looking for.
3. Have a complete short sale package submitted with all applicable documents.
The banks have definitely been pro active in completing short sales however, the deal still needs to makes sense. If you do not have a qualified borrower, that will kill the deal right away. The bank has a certain NET in mind. If you cannot meet the net requirements with the offer you submit, a listing history is necessary to negotiate with the bank. If you submit a short sale package that is in complete how successful do you think you will be getting an approval in 83 days if the bank is constantly tracking down documents, fighting the value of your offer or questioning your clients hardship? The goal is to streamline your own process before it hits the negotiators desk at the bank. This will help you achieve what you want in the time you want.
These incentives are a great way to encourage borrowers to take action and get involved in the short sale program but it is important that you do not over promise and under deliver. We preach about this a lot at Lotus Realty Group. I get a lot of calls about these types of incentives from borrowers and it becomes apparent very quickly that they do not understand the process in which it takes to get them there. And it all starts with asking the right questions and Pre Qualifying.
Extra Tip:
Before marking your calendar from 83 days to start, please keep in mind that if you do not follow the suggestions in this blog you will most likely run into longer time frames. Here is a typical time line:
1. File submitted
2. 7-10 days to upload into the system
3. 2-3 weeks processing time
4. Order BPO
5. 7-10 days for BPO to be submitted and assigned to a negotiator
6. Negotiator can take anywhere from 2-4 weeks to negotiate the file
7. Submit to the investor for final approval
8. Investor can take anywhere from 1-3 weeks ( plus or minus)
(Quote) You can't move so fast that you try to change [a situation] faster than people can accept it. That doesn't mean you do nothing, but it means that you do the things that need to be done according to priority.
“Eleanor Roosevelt”
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Thursday, June 30, 2011
Thursday, June 23, 2011
Who is a potential candidate for a short sale?
There are three types of homeowners that are candidates for short sales. Each one has its set of expectations and guidelines. It is important to determine which type you are dealing with so you are able to set the proper expectations up front and determine if this is a listing you want to take on. As each will have their own set of battles you will want to choose your battles wisely.
The first type of homeowner is one who has a true hardship and has become delinquent on their mortgage. They have had a change in income or lost their job all together. There may be a divorce or illness. There may be significant damage to the property and they are unable to repair it back to a livable condition. This homeowner has very little or NO money in the bank and may be living off their credit cards which are close to being maxed out. Due to their delinquencies they are already in foreclosure status and a sale date is approaching. This homeowner could be experiencing one or more of these hardships or all of them. Sounds like they could use some help, yeah?
This type is a no brainer. The homeowner will have a lot of questions and concerns. They will need a Real Estate Professional to guide them through the process.
Here are some important things to do while on your listing appointment:
1. Ask all the right questions. You still need to pre qualify them and get all the key pieces of information to help you while negotiating with the bank.
2. Bring your short sale package with you. Go through the short sale package with them and explain the importance of filling it out properly and gathering all the applicable documents.
3. Bring your listing agreement. Have in place the set listing price and 3 price reductions. The financial institutions like to see the home listed within 24-48hrs of taking the listing.
4. Set proper expectations in regards to timelines, the importance of getting requested documents over to you as soon as possible and the possibility of the bank asking for a small cash contribution or new promissory note. The possibility of a contribution request from a homeowner who has a genuine hardship and has NO money is not likely but it is possible. It is negotiable but you do not want your client to have any surprises. This lessens their anxiety level and they will definitely appreciate that.
5. Advise them to speak with a Real Estate Attorney and a CPA for any questions pertaining to deficiency and tax ramifications.
6. If the sale date is a week or two away and the homeowner is 12 months or greater delinquent on their mortgage, you may not be able to help this homeowner.
The second candidate is the homeowner that has not missed a payment yet but knows they are headed that way due to the downturn in the economy. They can see the train coming and want to get off before the impact hits. This homeowner does have some money in savings but it is dwindling down slowly due to having to draw from it every month to cover their bills. They may have some other assets. They may have to take a job in a different location that promises to pay more and for that reason they have to leave. The home cannot be sold traditionally due to the declining values in the neighborhood and they owe much more than the home is worth. I can appreciate these circumstances.
This type is also a no brainer. These circumstances are still considered a hardship and will give you a good argument when negotiating with the bank.
Consider this:
This home owner is NOT delinquent so you are not fighting against foreclosure timelines. Make sure you are marketing this property for a substantial amount of time to show the bank a listing history.
The third type you will run into is the home owner that is NOT delinquent and CAN afford to make their payment along with all of their other monthly bills and have a nice surplus left over. They have a nice checking and savings account. They may have other properties that are cash flowing. The main reason for wanting to short sale is because he or she owes more than the home is worth and they want out. This type is tricky. The bank may or may not work with this type.
Here are some important things to consider BEFORE taking this listing:
1. Clearly this is not a traditional homeowner in foreclosure status.
2. The bank may approve this short sale but it will most likely be on the following terms:
a) The bank may ask for a cash contribution. The amount requested will most likely be more than it would be for a homeowner with a true hardship.
b) The bank may ask for a new promissory note. This may be anywhere between $10,000 to $40,000.
c) The bank may ask for both.
What you want to determine is if the homeowner is willing to do A, B, or C. If they are not willing to do any of them you may not want to take the listing. You will only be wasting your time.
We are not just pre qualifying homeowners on paper but we also want to feel their level of cooperation. If they are not willing to do what it takes to get the job done everyone will lose in the end.
Extra Tip
You cannot give advice on tax ramifications. You need to direct them to a CPA but after evaluating all three sets of circumstances, which type of candidate would MOST LIKELY experience tax ramifications?? Think about it.
(Quote) Working hard and working smart sometimes can be two different things.
Byron Dorgan
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
The first type of homeowner is one who has a true hardship and has become delinquent on their mortgage. They have had a change in income or lost their job all together. There may be a divorce or illness. There may be significant damage to the property and they are unable to repair it back to a livable condition. This homeowner has very little or NO money in the bank and may be living off their credit cards which are close to being maxed out. Due to their delinquencies they are already in foreclosure status and a sale date is approaching. This homeowner could be experiencing one or more of these hardships or all of them. Sounds like they could use some help, yeah?
This type is a no brainer. The homeowner will have a lot of questions and concerns. They will need a Real Estate Professional to guide them through the process.
Here are some important things to do while on your listing appointment:
1. Ask all the right questions. You still need to pre qualify them and get all the key pieces of information to help you while negotiating with the bank.
2. Bring your short sale package with you. Go through the short sale package with them and explain the importance of filling it out properly and gathering all the applicable documents.
3. Bring your listing agreement. Have in place the set listing price and 3 price reductions. The financial institutions like to see the home listed within 24-48hrs of taking the listing.
4. Set proper expectations in regards to timelines, the importance of getting requested documents over to you as soon as possible and the possibility of the bank asking for a small cash contribution or new promissory note. The possibility of a contribution request from a homeowner who has a genuine hardship and has NO money is not likely but it is possible. It is negotiable but you do not want your client to have any surprises. This lessens their anxiety level and they will definitely appreciate that.
5. Advise them to speak with a Real Estate Attorney and a CPA for any questions pertaining to deficiency and tax ramifications.
6. If the sale date is a week or two away and the homeowner is 12 months or greater delinquent on their mortgage, you may not be able to help this homeowner.
The second candidate is the homeowner that has not missed a payment yet but knows they are headed that way due to the downturn in the economy. They can see the train coming and want to get off before the impact hits. This homeowner does have some money in savings but it is dwindling down slowly due to having to draw from it every month to cover their bills. They may have some other assets. They may have to take a job in a different location that promises to pay more and for that reason they have to leave. The home cannot be sold traditionally due to the declining values in the neighborhood and they owe much more than the home is worth. I can appreciate these circumstances.
This type is also a no brainer. These circumstances are still considered a hardship and will give you a good argument when negotiating with the bank.
Consider this:
This home owner is NOT delinquent so you are not fighting against foreclosure timelines. Make sure you are marketing this property for a substantial amount of time to show the bank a listing history.
The third type you will run into is the home owner that is NOT delinquent and CAN afford to make their payment along with all of their other monthly bills and have a nice surplus left over. They have a nice checking and savings account. They may have other properties that are cash flowing. The main reason for wanting to short sale is because he or she owes more than the home is worth and they want out. This type is tricky. The bank may or may not work with this type.
Here are some important things to consider BEFORE taking this listing:
1. Clearly this is not a traditional homeowner in foreclosure status.
2. The bank may approve this short sale but it will most likely be on the following terms:
a) The bank may ask for a cash contribution. The amount requested will most likely be more than it would be for a homeowner with a true hardship.
b) The bank may ask for a new promissory note. This may be anywhere between $10,000 to $40,000.
c) The bank may ask for both.
What you want to determine is if the homeowner is willing to do A, B, or C. If they are not willing to do any of them you may not want to take the listing. You will only be wasting your time.
We are not just pre qualifying homeowners on paper but we also want to feel their level of cooperation. If they are not willing to do what it takes to get the job done everyone will lose in the end.
Extra Tip
You cannot give advice on tax ramifications. You need to direct them to a CPA but after evaluating all three sets of circumstances, which type of candidate would MOST LIKELY experience tax ramifications?? Think about it.
(Quote) Working hard and working smart sometimes can be two different things.
Byron Dorgan
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Thursday, June 2, 2011
Important Q&A in a Short Sale transaction
I was recently asked by the AREAA foundation to be one of speakers on a short sale panel with a few other short sale negotiators and two attorneys one in which is my Real Estate attorney and friend David Bright. Many of you know and respect him. Those of you who do know him understand along with my company Lotus Realty Group that we are very passionate about educating REALTORS on all facets of the short sale market.
I wanted to share with you some of the questions that REALTORS were inquiring about and give you some of the feedback David and I shared with the group.
1. In regards to a homeowner’s financials, what should we not submit? Do we not show the stocks, bonds, 401k, and checking accounts with large balances?
I want to remind you of what a true hardship is.
a) Change in income due to a pay cut
b) Job loss
c) Divorce
d) Illness
e) Insurmountable damages to the property
If we have a true hardship most likely there will not be huge balances in a checking account or stocks and bonds that are worth much so there is nothing to worry about as you have pre qualified your seller and asked all the right questions. If you have a situation where your homeowner does have stocks and bonds, etc. I would not hide that from the lender. If you do there is a good chance they will find out anyway and you will kill your chances. For example: If your client does not list his assets properly and some are showing on his tax returns as residual income then clearly the lender will question why it was not listed on his or her expense sheet. You want a clean proposal. What I would do is set proper expectation with your client. Explain that the short sale lender may ask for a cash contribution or a new promissory note at a lesser amount. Personally if a homeowner in this situation is not willing to contribute when there financials clearly shows they can, I would not take that on.
2. Can a short sale lender make the homeowner draw from their 401k to pay down there principal balance?
No, they are not allowed to force a homeowner to draw from their 401k however; it will be one of the determining factors when considering the ability to contribute a cash contribution or new promissory note.
3. What do you do when the 2nd lien holder wants more money than the 1st lien holder will allow and the 1st will not allow any other parties to contribute?
It has been my experience that the offer that you submit is going to be one of the determining factors in that decision. I would first make sure you have a strong listing on the property so you have all of your data to support your value. If you submit to low of an offer the 1st lien holder most likely will not be very gracious. 2nd lien holders typically want 10% of the balance.
If you have done this properly and you still cannot get the 1st to cover the full amount the 2nd is requiring then some STRONG negotiating is necessary. You can always go back to the first and argue to at least allow other parties to contribute. At that point, buyers and agent’s may have to come together to make it work. My suggestion would be to set expectation upfront with the homeowner and the buyer that money may need to be brought to the table. This will save REALTORS from pulling from their commissions.
4. Would it be okay to offer 1.5 to 2%% to a buyer’s agent in the MLS on one of my listings especially if I have to pay a negotiator fee?
Well, you can offer whatever you want but this could be very problematic in a couple different ways:
a) The idea is to get agents to bring clients to your listings. If you offer to low of a commission split you may steer buyer’s agents elsewhere. Is it worth that risk in this market?
b) In regards to the negotiator fee you can do it a couple different ways. You can put 2.5% to the buyer’s agent and 3.5 % to the listing agent but you may still run into the issue of buyers agents taking their buyers elsewhere. I always offer 3% on my personal listings. I would simply have a conversation with the buyer’s agent and see if they would be willing to split the negotiator fee with you. I have REALTORS who are very successful in doing that. The idea is not to focus on an l% negotiator fee if you are outsourcing. It is hard to prospect and get listings and do all the negotiating yourself. I have tried it. It is nearly impossible to fully serve your clients this way. Get 30 short sales in your pipeline where you are closing 2-3 listings monthly and I guarantee you the 1% to a negotiator will not be that big of an issue as the negotiator will allow you to focus on getting more listings and expanding your business, close deals and give your clients the best customer service possible.
5. Can I ask for 10% commissions to be granted from the short sale lender?
Short sale lenders are paying out 5-6% in commissions. I have never seen a short sale lender approve that high and quite honestly you do not want to start out the process frustrating the negotiator at the bank.
Extra Tip:
In the confidential remarks I would put the following verbiage:
All lender commissions are subject to lender approval. Any commissions below 6% are to be split 50/50 between agents.
There is no doubt that there are many techniques out there on how to negotiate and put short sale transactions together. My personal experience is that it is an art. A strategic approach with so many moving parts that it is imperative that we are structured, organized and have the proper legal counsel to ensure integrity and ethics for all parties involved.
I have done a lot of growing up in this business. Personally and professionally and I have not done it perfectly. One of the most valuable lessons I have learned recently is we cannot let how others are operating affect you and how you do business or how we show up in life in general. I always know when I am out of alignment. It has an effect on everyone around me. It is easy to get caught up in the currents of life and other affairs.
Insanity, doing the same thing over and over again and expecting a different result. Well, unfortunately many of us learn the hard way but as for me it is much easier and less painful to stay centered in what I know to be the most effective way. The easier and softer way. Everyone around will benefit from that. In a short sale transaction, doing what I know works and not veering off that path will only help to remain effective and efficient.
(Quote) Life brings what it brings. I might be young but I've learnt this: prepare for each blind corner with your strongest shoulder dropped, ready to smash through whatever is thrown at you next. Once the dust clears you will be standing tall, a champion, and a victor. NOTHING will be able to knock you down once you've taken the biggest hits this life has to offer, so come on life, BRING IT!"
Adam Johnson
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
I wanted to share with you some of the questions that REALTORS were inquiring about and give you some of the feedback David and I shared with the group.
1. In regards to a homeowner’s financials, what should we not submit? Do we not show the stocks, bonds, 401k, and checking accounts with large balances?
I want to remind you of what a true hardship is.
a) Change in income due to a pay cut
b) Job loss
c) Divorce
d) Illness
e) Insurmountable damages to the property
If we have a true hardship most likely there will not be huge balances in a checking account or stocks and bonds that are worth much so there is nothing to worry about as you have pre qualified your seller and asked all the right questions. If you have a situation where your homeowner does have stocks and bonds, etc. I would not hide that from the lender. If you do there is a good chance they will find out anyway and you will kill your chances. For example: If your client does not list his assets properly and some are showing on his tax returns as residual income then clearly the lender will question why it was not listed on his or her expense sheet. You want a clean proposal. What I would do is set proper expectation with your client. Explain that the short sale lender may ask for a cash contribution or a new promissory note at a lesser amount. Personally if a homeowner in this situation is not willing to contribute when there financials clearly shows they can, I would not take that on.
2. Can a short sale lender make the homeowner draw from their 401k to pay down there principal balance?
No, they are not allowed to force a homeowner to draw from their 401k however; it will be one of the determining factors when considering the ability to contribute a cash contribution or new promissory note.
3. What do you do when the 2nd lien holder wants more money than the 1st lien holder will allow and the 1st will not allow any other parties to contribute?
It has been my experience that the offer that you submit is going to be one of the determining factors in that decision. I would first make sure you have a strong listing on the property so you have all of your data to support your value. If you submit to low of an offer the 1st lien holder most likely will not be very gracious. 2nd lien holders typically want 10% of the balance.
If you have done this properly and you still cannot get the 1st to cover the full amount the 2nd is requiring then some STRONG negotiating is necessary. You can always go back to the first and argue to at least allow other parties to contribute. At that point, buyers and agent’s may have to come together to make it work. My suggestion would be to set expectation upfront with the homeowner and the buyer that money may need to be brought to the table. This will save REALTORS from pulling from their commissions.
4. Would it be okay to offer 1.5 to 2%% to a buyer’s agent in the MLS on one of my listings especially if I have to pay a negotiator fee?
Well, you can offer whatever you want but this could be very problematic in a couple different ways:
a) The idea is to get agents to bring clients to your listings. If you offer to low of a commission split you may steer buyer’s agents elsewhere. Is it worth that risk in this market?
b) In regards to the negotiator fee you can do it a couple different ways. You can put 2.5% to the buyer’s agent and 3.5 % to the listing agent but you may still run into the issue of buyers agents taking their buyers elsewhere. I always offer 3% on my personal listings. I would simply have a conversation with the buyer’s agent and see if they would be willing to split the negotiator fee with you. I have REALTORS who are very successful in doing that. The idea is not to focus on an l% negotiator fee if you are outsourcing. It is hard to prospect and get listings and do all the negotiating yourself. I have tried it. It is nearly impossible to fully serve your clients this way. Get 30 short sales in your pipeline where you are closing 2-3 listings monthly and I guarantee you the 1% to a negotiator will not be that big of an issue as the negotiator will allow you to focus on getting more listings and expanding your business, close deals and give your clients the best customer service possible.
5. Can I ask for 10% commissions to be granted from the short sale lender?
Short sale lenders are paying out 5-6% in commissions. I have never seen a short sale lender approve that high and quite honestly you do not want to start out the process frustrating the negotiator at the bank.
Extra Tip:
In the confidential remarks I would put the following verbiage:
All lender commissions are subject to lender approval. Any commissions below 6% are to be split 50/50 between agents.
There is no doubt that there are many techniques out there on how to negotiate and put short sale transactions together. My personal experience is that it is an art. A strategic approach with so many moving parts that it is imperative that we are structured, organized and have the proper legal counsel to ensure integrity and ethics for all parties involved.
I have done a lot of growing up in this business. Personally and professionally and I have not done it perfectly. One of the most valuable lessons I have learned recently is we cannot let how others are operating affect you and how you do business or how we show up in life in general. I always know when I am out of alignment. It has an effect on everyone around me. It is easy to get caught up in the currents of life and other affairs.
Insanity, doing the same thing over and over again and expecting a different result. Well, unfortunately many of us learn the hard way but as for me it is much easier and less painful to stay centered in what I know to be the most effective way. The easier and softer way. Everyone around will benefit from that. In a short sale transaction, doing what I know works and not veering off that path will only help to remain effective and efficient.
(Quote) Life brings what it brings. I might be young but I've learnt this: prepare for each blind corner with your strongest shoulder dropped, ready to smash through whatever is thrown at you next. Once the dust clears you will be standing tall, a champion, and a victor. NOTHING will be able to knock you down once you've taken the biggest hits this life has to offer, so come on life, BRING IT!"
Adam Johnson
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Thursday, May 19, 2011
Questions to ask a homeowner attempting a loan modification
REALTORS, you will inevitably come across a homeowner while prospecting who says; I am not interested as we are trying to do a loan modification. The homeowner attempting to do a loan modification is going to run into some problems especially if they are already in pre-foreclosure meaning that there has been an NOD (Notice of Default) filed against the homeowner with a projected sale date.
It has been my experience there are three reasons a homeowner is motivated to do a loan modification:
1. Reduction in wages
2. Owe more than the home is worth and selling is not an option.
3. They want to SAVE their house.
Most homeowners will start by calling their lender. Here are some complaints I have heard out in the battlefield from homeowners who are frustrated with the process:
1. I submitted my paperwork weeks ago and when I finally got a hold of a representative I was told they have no record of our modification on file.
2. I cannot get anyone to call me back.
3. I am not successful on my own so I was thinking of hiring an attorney or someone from a loan modification company who will work with the lender on my behalf.
Keep in mind that these are people that are stressed out and do not know who to trust and they need a professional to explain to them what is about to unfold.
First off, truth be told, most homeowners approved for a loan modification in this market ARE NOT truly qualified for a loan modification and are a foreclosure waiting to happen. More than half of loan modifications are re-defaulting. I can appreciate them wanting to save their home as no-one wants to uproot their families but the reality is we are also in an economy where employment has been challenged. If they are experiencing a wage reduction the questions to ask are the following:
1. Do you see your financial picture improving or staying the same over the next year?
2. Is this a temporary fix?
3. When taxes and insurance adjust and your payments increase yet again, are you going to be able to continue to make your mortgage payments for the life of the loan?
4. If the lender does approve your loan modification is it going to be lowered enough to make sense for you to accept the terms?
5. Are you aware that most loan modifications will only lower your payment by roughly $200?
6. Are you aware there is a sale date on your property and that not hearing from you lender is not a good sign?
7. Are you going to be able to avoid your home from going to foreclosure?
8. Did the person working on your case charge you an upfront fee?
Depending on the answers that you receive from your potential client to these questions will assist you in encouraging them to look at all their options as their answers to these questions could show HUGE red flags that they are in trouble.
Most homeowners owe more than their home is worth. They actually do want to sell but that is not possible traditionally. Most home owners do not realize all of their options. Their first thought is to try a loan modification. That is fine to try, but that does not really solve their problem and they need to have a plan B. Though a short sale is a long process, foreclosing would be much more damaging to their credit.
The number one motivator for families is to SAVE THEIR HOUSE. Most homeowners are devastated and are clinging to some sort of hope that the lender will have their best interest in mind. REALTORS, we all know that could not be farther from the truth. As a short sale negotiator I have the opportunity to hear both sides. I know what is most important to the homeowner and the lender. Neither parties are wrong, but at the end of the day it comes down to numbers. Everyone is going to lose something so the idea is to make sure we are meeting in the middle.
As Real Estate professionals you have the opportunity to help them stop the bleeding and find a solution that will best fit their needs and help them get back on solid ground.
(Quote) When one door closes another door opens;
but we so often look so long and so regretfully upon the closed door,
that we do not see the ones which open for us.
-Alexander Graham Bell
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
It has been my experience there are three reasons a homeowner is motivated to do a loan modification:
1. Reduction in wages
2. Owe more than the home is worth and selling is not an option.
3. They want to SAVE their house.
Most homeowners will start by calling their lender. Here are some complaints I have heard out in the battlefield from homeowners who are frustrated with the process:
1. I submitted my paperwork weeks ago and when I finally got a hold of a representative I was told they have no record of our modification on file.
2. I cannot get anyone to call me back.
3. I am not successful on my own so I was thinking of hiring an attorney or someone from a loan modification company who will work with the lender on my behalf.
Keep in mind that these are people that are stressed out and do not know who to trust and they need a professional to explain to them what is about to unfold.
First off, truth be told, most homeowners approved for a loan modification in this market ARE NOT truly qualified for a loan modification and are a foreclosure waiting to happen. More than half of loan modifications are re-defaulting. I can appreciate them wanting to save their home as no-one wants to uproot their families but the reality is we are also in an economy where employment has been challenged. If they are experiencing a wage reduction the questions to ask are the following:
1. Do you see your financial picture improving or staying the same over the next year?
2. Is this a temporary fix?
3. When taxes and insurance adjust and your payments increase yet again, are you going to be able to continue to make your mortgage payments for the life of the loan?
4. If the lender does approve your loan modification is it going to be lowered enough to make sense for you to accept the terms?
5. Are you aware that most loan modifications will only lower your payment by roughly $200?
6. Are you aware there is a sale date on your property and that not hearing from you lender is not a good sign?
7. Are you going to be able to avoid your home from going to foreclosure?
8. Did the person working on your case charge you an upfront fee?
Depending on the answers that you receive from your potential client to these questions will assist you in encouraging them to look at all their options as their answers to these questions could show HUGE red flags that they are in trouble.
Most homeowners owe more than their home is worth. They actually do want to sell but that is not possible traditionally. Most home owners do not realize all of their options. Their first thought is to try a loan modification. That is fine to try, but that does not really solve their problem and they need to have a plan B. Though a short sale is a long process, foreclosing would be much more damaging to their credit.
The number one motivator for families is to SAVE THEIR HOUSE. Most homeowners are devastated and are clinging to some sort of hope that the lender will have their best interest in mind. REALTORS, we all know that could not be farther from the truth. As a short sale negotiator I have the opportunity to hear both sides. I know what is most important to the homeowner and the lender. Neither parties are wrong, but at the end of the day it comes down to numbers. Everyone is going to lose something so the idea is to make sure we are meeting in the middle.
As Real Estate professionals you have the opportunity to help them stop the bleeding and find a solution that will best fit their needs and help them get back on solid ground.
(Quote) When one door closes another door opens;
but we so often look so long and so regretfully upon the closed door,
that we do not see the ones which open for us.
-Alexander Graham Bell
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Monday, May 9, 2011
Set up your revenues for the future by giving back in a depressed market!!
I work with a lot of REALTORS who are targeting homeowners who are defaulting on their mortgage. One of the main questions that is asked is how do you approach a home owner who is in default and going through one of the most stressful and difficult times of their life?
Let me share with you my experience. Two years ago I was an active and aggressive door knocker. DAILY I would pick ten homes in Foreclosure Radar all within a 5 mile radius and with a sale date of at least 2 months out and I would visit these houses in the afternoon when most people are getting off work. I quickly learned a few things and had to adjust my approach accordingly:
1. These are not expired listings or FSBO'S, meaning this is not a traditional market and my ways had to soften in order for someone to want to hear what I had to say. The traditional “Sign the contract” was not going to work.
2. These homeowners were inundated with mailers from REALTORS claiming they were short sale experts but the majority of them were charging an upfront fee which led to distrust within the Real Estate market.
3. Some of the homeowners were trying to do a loan modification and were in complete denial about the reality of their situation. They were unaware that most loan modifications fail and foreclosure was therefore imminent.
4. Most homeowners were not educated about all of their options and were not aware of the California foreclosure timeline.
I realized that in order for me to be successful in getting the homeowners to speak to me I needed to consider the following:
1. I needed to remain open, compassionate, non judgmental and KNOW that my job is to build a relationship and trust. Listen first and then ask questions.
2. I did not want to sound like I was reading a script. Although that works well when you are calling expired listings and FSBO'S, in a delicate matter such as this where a lot of negative emotions are flying around coming from the heart is where I knew I would be most effective.
3. I needed to know my content in order to handle objections as there are many in short sale transactions. There is a level of distrust so the more professional, compassionate and knowledgeable I was, the more I would be able to get through to them.
4. I needed to EDUCATE the homeowner on all of their options. Help them to decide on their own what the best choice would be in order for them to achieve their goals.
What I sense from home owners who are losing their homes is a level of fear, shame and guilt. That’s a lot of energy to hold space for. The question to ask yourself is can you be still and listen, really listen? That’s what they are looking for along with a solution. Here are “3 ways of giving” I like to use when I am on a listing appointment:
a) Give them reality
b) Give them their options
c) Give them hope
They are looking for you to tell them the truth not what they want to hear. By listening and asking all the right questions you will be able to intelligently explain what is about to unfold.
Go over the pros and cons of all options for a homeowner in default and then put the ball in their court so they can feel a sense of empowerment that they made this decision and it was not forced upon them.
Lastly, offer to help. Help them find a rental at the end of the short sale or offer help with a credit recovery program. If all is done properly, in 18-24 months they could be in the market to buy a home again.
What does this do for you as agents?
These homeowners are not broken; they just need the proper guidance. If you allow yourself to give back to the community and to people that truly need help you are creating 3 things:
1. Build strong relationships.
2. When you help them through this process and break through to the other side they will come back to you therefore setting up your revenues for the future.
3. You will be the first person they think of when they are in a position to refer you to others who could benefit from your services.
It is no secret that we are in a time where our entire livelihood has been challenged but one of the greatest gifts I have learned in this market is the more I slow down and take the time needed to connect with people and listen the more effective and efficient I am. I have great connections with wonderful people and the feeling I get when I am able to help someone through this time and make it a win for them is something that money can’t buy yet I am rewarded anyway. How does that happen?
(Quote) The place to improve the world is first in one's own heart and head and hands.
Robert M. Pirsig
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Let me share with you my experience. Two years ago I was an active and aggressive door knocker. DAILY I would pick ten homes in Foreclosure Radar all within a 5 mile radius and with a sale date of at least 2 months out and I would visit these houses in the afternoon when most people are getting off work. I quickly learned a few things and had to adjust my approach accordingly:
1. These are not expired listings or FSBO'S, meaning this is not a traditional market and my ways had to soften in order for someone to want to hear what I had to say. The traditional “Sign the contract” was not going to work.
2. These homeowners were inundated with mailers from REALTORS claiming they were short sale experts but the majority of them were charging an upfront fee which led to distrust within the Real Estate market.
3. Some of the homeowners were trying to do a loan modification and were in complete denial about the reality of their situation. They were unaware that most loan modifications fail and foreclosure was therefore imminent.
4. Most homeowners were not educated about all of their options and were not aware of the California foreclosure timeline.
I realized that in order for me to be successful in getting the homeowners to speak to me I needed to consider the following:
1. I needed to remain open, compassionate, non judgmental and KNOW that my job is to build a relationship and trust. Listen first and then ask questions.
2. I did not want to sound like I was reading a script. Although that works well when you are calling expired listings and FSBO'S, in a delicate matter such as this where a lot of negative emotions are flying around coming from the heart is where I knew I would be most effective.
3. I needed to know my content in order to handle objections as there are many in short sale transactions. There is a level of distrust so the more professional, compassionate and knowledgeable I was, the more I would be able to get through to them.
4. I needed to EDUCATE the homeowner on all of their options. Help them to decide on their own what the best choice would be in order for them to achieve their goals.
What I sense from home owners who are losing their homes is a level of fear, shame and guilt. That’s a lot of energy to hold space for. The question to ask yourself is can you be still and listen, really listen? That’s what they are looking for along with a solution. Here are “3 ways of giving” I like to use when I am on a listing appointment:
a) Give them reality
b) Give them their options
c) Give them hope
They are looking for you to tell them the truth not what they want to hear. By listening and asking all the right questions you will be able to intelligently explain what is about to unfold.
Go over the pros and cons of all options for a homeowner in default and then put the ball in their court so they can feel a sense of empowerment that they made this decision and it was not forced upon them.
Lastly, offer to help. Help them find a rental at the end of the short sale or offer help with a credit recovery program. If all is done properly, in 18-24 months they could be in the market to buy a home again.
What does this do for you as agents?
These homeowners are not broken; they just need the proper guidance. If you allow yourself to give back to the community and to people that truly need help you are creating 3 things:
1. Build strong relationships.
2. When you help them through this process and break through to the other side they will come back to you therefore setting up your revenues for the future.
3. You will be the first person they think of when they are in a position to refer you to others who could benefit from your services.
It is no secret that we are in a time where our entire livelihood has been challenged but one of the greatest gifts I have learned in this market is the more I slow down and take the time needed to connect with people and listen the more effective and efficient I am. I have great connections with wonderful people and the feeling I get when I am able to help someone through this time and make it a win for them is something that money can’t buy yet I am rewarded anyway. How does that happen?
(Quote) The place to improve the world is first in one's own heart and head and hands.
Robert M. Pirsig
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Monday, April 25, 2011
Perseverance and determination in the current state of the market
I trust you all had a nice and relaxing holiday weekend. Personally, I feel a sense of renewed strength and re-direction in my priorities, purpose and possibility. I have met with a lot of REALTORS to help them with their short sale businesses and I always like to ask a lot of questions in the beginning:
1. What is your main focus? Buyers, listings, short sales or all three?
2. How much time do you spend prospecting?
3. How much time do you spend with lead follow up?
4. When do you typically go on listing appointments?
5. How much marketing if any are you doing?
6. Are you currently time blocking and following a schedule?
What I hear the most from REALTORS in regards to these questions are the following:
1. Types of clients: I have been spending more time with buyers as a majority of the listings out here are short sales and I do not want to deal with a short sale.
2. Prospecting: I try to spend a little time here and there but I get pulled in different directions during the day and end up going with the flow of whatever comes up and needs attention.
3. Lead follow up: I usually get in 20 minutes to an hour.
4. Appointments: When ever my client is available.
5. Marketing: I do not have the money to spend on a lot of marketing.
6. Time blocking: I have a family and it is hard to keep a schedule.
I wanted to share a story with you. Before I started my business I was blessed with the rare opportunity to be a part of one of the top Real Estate teams in San Diego led by one of the top leaders in our industry today. I had a vision to help people in the current state of the market and I focused all of my attention on cracking the short sale code. At that time not many people were aware of how to approach this side of the Real Estate market. While I was on this team I had learned a lot of valuable lessons on how to be successful but I was also told something that has stuck with me: “Run your real estate business but don’t let it run you.”
Wow! There is a lot of truth and power in that statement. When I left and started my company I was eager to be successful and eager to get out there and knock on doors and help home owners who were in default. I quickly learned a few things:
a) I could not knock on enough doors nor could I get enough people to respond fast enough.
b) My time was spent in too many directions that was causing me to be in-effective and in-efficient and at the time I only had an assistant helping me.
c) I was slowly losing sight of what my true goal and purpose was for starting this company in the beginning.
I wanted to help people. I wanted to offer something special to home owners who were suffering and needed direction. That was my original motivation. The same person said something else that was very profound to me at the time however it was not remembered until I desperately needed direction. “Instead of focusing on one person to help, find a way to help many.”
Lotus Realty Group was born and I decided that I was going to put all my focus on helping REALTORS expand their business, take listings and close their short sale transactions. By putting my focus into ONE thing, one thing I knew I was good at and mastering that has allowed me to do the following:
1. Develop a system that runs like a well oiled machine for me and for REALTORS.
2. Receive 3-5 of my OWN listings monthly just through referrals and my newsletters thus keeping marketing costs down and saving the time it takes door knocking. The majority of my business is helping REALTORS close their short sale transactions therefore I am reaching more homeowners who need help than I could get to on my own.
3. Manage my time so I can work smart, effective and efficient!
By re directing my priorities, purpose and possibility, all the other parts of my business just started falling into place. We are in a time where there is a lot of uncertainty in the market and a lot of people that need your help. Some questions to ask yourself are:
a) What is your passion in this industry?
b) Where would your time be best spent?
c) Are you involved in a part of the market (short sales) that are going to be around for quite a while? If not, why?
d) Where do you see yourself in 5 years?
e) What is your desire for the future?
f) How can I help others right now that are suffering in this economy with the tools that I have and are readily available to me?
My possibility for the future is to offer a solid platform, foundation and culture for REALTORS at Lotus Realty Group. To offer extensive training, support and accountability and continue to help REALTORS expand their business, take short sale listings and close their short sale transactions. Well oiled machines. Imagine how many people we can help together.
Here are some tips that I have learned that have helped me tremendously grow my company:
1. Surround yourself only with people who share your possibility. People who uplift you and support you no matter what.
2. Pick one thing and with all your heart approach it with 100% commitment and determination to persevere in whatever obstacles may come your way.
3. Have a longing, a desire and be willing to do whatever it takes to achieve your goal.
4. Self mastery, discipline is necessary to give your very best.
5. Time management. To be effective and efficient time block for prospecting, appointments and lead follow up. When done properly you will be able to accomplish everything you need to accomplish with ease and grace.
6. Be willing to deal with all types of personalities.
7. Never, never, never, give up. (Guess who said that and you get a Starbucks card!!!!)
Now is just as good a time as any to put your business plan, your hopes and dreams for the future in motion. What’s your dream? Think about it.
(Quote :) Life is not easy for any of us. But what of that? We must have perseverance and, above all, confidence in ourselves. We must believe that we are gifted for something, and that this thing, at whatever cost, must be attained.
~ Marie Curie
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
1. What is your main focus? Buyers, listings, short sales or all three?
2. How much time do you spend prospecting?
3. How much time do you spend with lead follow up?
4. When do you typically go on listing appointments?
5. How much marketing if any are you doing?
6. Are you currently time blocking and following a schedule?
What I hear the most from REALTORS in regards to these questions are the following:
1. Types of clients: I have been spending more time with buyers as a majority of the listings out here are short sales and I do not want to deal with a short sale.
2. Prospecting: I try to spend a little time here and there but I get pulled in different directions during the day and end up going with the flow of whatever comes up and needs attention.
3. Lead follow up: I usually get in 20 minutes to an hour.
4. Appointments: When ever my client is available.
5. Marketing: I do not have the money to spend on a lot of marketing.
6. Time blocking: I have a family and it is hard to keep a schedule.
I wanted to share a story with you. Before I started my business I was blessed with the rare opportunity to be a part of one of the top Real Estate teams in San Diego led by one of the top leaders in our industry today. I had a vision to help people in the current state of the market and I focused all of my attention on cracking the short sale code. At that time not many people were aware of how to approach this side of the Real Estate market. While I was on this team I had learned a lot of valuable lessons on how to be successful but I was also told something that has stuck with me: “Run your real estate business but don’t let it run you.”
Wow! There is a lot of truth and power in that statement. When I left and started my company I was eager to be successful and eager to get out there and knock on doors and help home owners who were in default. I quickly learned a few things:
a) I could not knock on enough doors nor could I get enough people to respond fast enough.
b) My time was spent in too many directions that was causing me to be in-effective and in-efficient and at the time I only had an assistant helping me.
c) I was slowly losing sight of what my true goal and purpose was for starting this company in the beginning.
I wanted to help people. I wanted to offer something special to home owners who were suffering and needed direction. That was my original motivation. The same person said something else that was very profound to me at the time however it was not remembered until I desperately needed direction. “Instead of focusing on one person to help, find a way to help many.”
Lotus Realty Group was born and I decided that I was going to put all my focus on helping REALTORS expand their business, take listings and close their short sale transactions. By putting my focus into ONE thing, one thing I knew I was good at and mastering that has allowed me to do the following:
1. Develop a system that runs like a well oiled machine for me and for REALTORS.
2. Receive 3-5 of my OWN listings monthly just through referrals and my newsletters thus keeping marketing costs down and saving the time it takes door knocking. The majority of my business is helping REALTORS close their short sale transactions therefore I am reaching more homeowners who need help than I could get to on my own.
3. Manage my time so I can work smart, effective and efficient!
By re directing my priorities, purpose and possibility, all the other parts of my business just started falling into place. We are in a time where there is a lot of uncertainty in the market and a lot of people that need your help. Some questions to ask yourself are:
a) What is your passion in this industry?
b) Where would your time be best spent?
c) Are you involved in a part of the market (short sales) that are going to be around for quite a while? If not, why?
d) Where do you see yourself in 5 years?
e) What is your desire for the future?
f) How can I help others right now that are suffering in this economy with the tools that I have and are readily available to me?
My possibility for the future is to offer a solid platform, foundation and culture for REALTORS at Lotus Realty Group. To offer extensive training, support and accountability and continue to help REALTORS expand their business, take short sale listings and close their short sale transactions. Well oiled machines. Imagine how many people we can help together.
Here are some tips that I have learned that have helped me tremendously grow my company:
1. Surround yourself only with people who share your possibility. People who uplift you and support you no matter what.
2. Pick one thing and with all your heart approach it with 100% commitment and determination to persevere in whatever obstacles may come your way.
3. Have a longing, a desire and be willing to do whatever it takes to achieve your goal.
4. Self mastery, discipline is necessary to give your very best.
5. Time management. To be effective and efficient time block for prospecting, appointments and lead follow up. When done properly you will be able to accomplish everything you need to accomplish with ease and grace.
6. Be willing to deal with all types of personalities.
7. Never, never, never, give up. (Guess who said that and you get a Starbucks card!!!!)
Now is just as good a time as any to put your business plan, your hopes and dreams for the future in motion. What’s your dream? Think about it.
(Quote :) Life is not easy for any of us. But what of that? We must have perseverance and, above all, confidence in ourselves. We must believe that we are gifted for something, and that this thing, at whatever cost, must be attained.
~ Marie Curie
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Tuesday, April 12, 2011
Financial institutions expectations in a short sale transaction
REALTORS, there have been a lot of frequently asked questions in regards to some of the requested documentation that the financial institutions are asking for when submitting a short sale package. We are all experiencing changes in the industry constantly, from the rules and guidelines to the paperwork. Experience has taught me that if these expectations are not met up front it will only hold up the process in the end when we are trying to push these through.
Let’s start with one of the biggest challenges we are facing today in short sales.
Submitting the right offer.
What we are seeing with some of the major financial institutions this year is that they are paying close attention to low ball offers. A rule of thumb to keep in mind is they generally want to see 90-95% of the balance owed. Is that realistic? NO. So how do we remedy that and show the financial institutions we are bringing them the highest and best? We simply create a listing history. Hopefully REALTORS, you are not taking on listings with sale dates less than 3 weeks away, 12 months of delinquencies and excessive HOA balances. These types of deals will be nearly impossible to push through. But if you have a qualified seller who fits the parameters for a successful short sale transaction then you have time to create a realistic picture for the bank.
1. Price the property close to what is owed on the loan for 30 days.
2. Set 3 price reductions on the 1st and 15th of the month moving forward. By the time you get to the 3rd price reduction you will have created a listing history for the financial institution to show them that you actively and aggressively marketed this property for a substantial amount of time and you will have all your data to support the value of the offer you submit.
I can share with you from experience that moving forward the financial institutions wants the homeowner to call and inform them that the home will be listed as a short sale. Bank of America will now send an appraiser out to the property before the home is listed and tell the listing agent what to list the property at based on their value. You will be asked to give them a weekly update and price reductions will occur every 21 days. If you have not experienced this yet, you will. We at Lotus Realty Group have been educating you for over 2 years to follow this system. Now the financial institutions are starting to implement this. I had a Bank of America representative call me on one of my listings in Carlsbad that I actually listed quite high to start my listing history. I was told to raise the price by nearly $25,000 and schedule a price reduction in 21 days even after I told him that it was listed at my price for 3 weeks and I had not received one phone call from a buyer.
The financial institutions are really going to start cracking down on this so it is my suggestion that we all work smart:
a) Prequalify the seller and do not take on a listing that does not make sense.
b) Have an addendum that has the listing price and the dates and prices of your reductions signed by your seller so you do not have to keep going back to your seller to modify the terms of your listing.
c) Mark all price reductions on your calendar as reminders to stay on task.
d) In the mean time, make sure you are gathering all documents and have a solid short sale package ready to go so that by the time you get the right offer you can submit it right away. I would tell your sellers to automatically send updated financials every month.
e) Use counters and addendum’s to set expectation with buyers. They need to understand short sales are sold as is. There are fees a bank may or may not cover. I would also make sure buyers are DU approved, not just pre qualified through a letter through their lender.
f) Submit the short sale package with your listing history, 3 active, 3pending and 3sold MLS listings and a comparative market analysis with a nice cover letter to explain your circumstances.
g) Set expectations with all parities in regards to timelines to keep everyone on board.
h) Follow up tenaciously.
Here are some other requirements that will save you time if you request them up front:
1. Financial institutions are requiring 4506 T’ s to be completed. I have made this part of my short sale package.
2. There have been a lot of inquiries on whether or not the Equator system requires buyer information. Social security numbers, date of birth, phone numbers and addresses. YES. There may have been occasions where you can get by with generic information but a majority of the time it is required so I would get into the habit of requesting it up front.
3. We have seen a lot of offers come in without proof of funds and pre-quall letters. Equator will not accept an offer without it so make sure you request it up front. We receive a lot of incomplete packages and it really does slow the process.
REALTORS, we at Lotus Realty Group has worked hard to tighten up our systems and keep all of you up to date with all the changes in this ever changing industry. It is my hope to help you move through this frustrating and tedious process in an effective and efficient manner to help get you what you want in the time you want.
(Quote) We must use time wisely and forever realize that the time is always ripe to do right.
- Nelson Mandela
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
Let’s start with one of the biggest challenges we are facing today in short sales.
Submitting the right offer.
What we are seeing with some of the major financial institutions this year is that they are paying close attention to low ball offers. A rule of thumb to keep in mind is they generally want to see 90-95% of the balance owed. Is that realistic? NO. So how do we remedy that and show the financial institutions we are bringing them the highest and best? We simply create a listing history. Hopefully REALTORS, you are not taking on listings with sale dates less than 3 weeks away, 12 months of delinquencies and excessive HOA balances. These types of deals will be nearly impossible to push through. But if you have a qualified seller who fits the parameters for a successful short sale transaction then you have time to create a realistic picture for the bank.
1. Price the property close to what is owed on the loan for 30 days.
2. Set 3 price reductions on the 1st and 15th of the month moving forward. By the time you get to the 3rd price reduction you will have created a listing history for the financial institution to show them that you actively and aggressively marketed this property for a substantial amount of time and you will have all your data to support the value of the offer you submit.
I can share with you from experience that moving forward the financial institutions wants the homeowner to call and inform them that the home will be listed as a short sale. Bank of America will now send an appraiser out to the property before the home is listed and tell the listing agent what to list the property at based on their value. You will be asked to give them a weekly update and price reductions will occur every 21 days. If you have not experienced this yet, you will. We at Lotus Realty Group have been educating you for over 2 years to follow this system. Now the financial institutions are starting to implement this. I had a Bank of America representative call me on one of my listings in Carlsbad that I actually listed quite high to start my listing history. I was told to raise the price by nearly $25,000 and schedule a price reduction in 21 days even after I told him that it was listed at my price for 3 weeks and I had not received one phone call from a buyer.
The financial institutions are really going to start cracking down on this so it is my suggestion that we all work smart:
a) Prequalify the seller and do not take on a listing that does not make sense.
b) Have an addendum that has the listing price and the dates and prices of your reductions signed by your seller so you do not have to keep going back to your seller to modify the terms of your listing.
c) Mark all price reductions on your calendar as reminders to stay on task.
d) In the mean time, make sure you are gathering all documents and have a solid short sale package ready to go so that by the time you get the right offer you can submit it right away. I would tell your sellers to automatically send updated financials every month.
e) Use counters and addendum’s to set expectation with buyers. They need to understand short sales are sold as is. There are fees a bank may or may not cover. I would also make sure buyers are DU approved, not just pre qualified through a letter through their lender.
f) Submit the short sale package with your listing history, 3 active, 3pending and 3sold MLS listings and a comparative market analysis with a nice cover letter to explain your circumstances.
g) Set expectations with all parities in regards to timelines to keep everyone on board.
h) Follow up tenaciously.
Here are some other requirements that will save you time if you request them up front:
1. Financial institutions are requiring 4506 T’ s to be completed. I have made this part of my short sale package.
2. There have been a lot of inquiries on whether or not the Equator system requires buyer information. Social security numbers, date of birth, phone numbers and addresses. YES. There may have been occasions where you can get by with generic information but a majority of the time it is required so I would get into the habit of requesting it up front.
3. We have seen a lot of offers come in without proof of funds and pre-quall letters. Equator will not accept an offer without it so make sure you request it up front. We receive a lot of incomplete packages and it really does slow the process.
REALTORS, we at Lotus Realty Group has worked hard to tighten up our systems and keep all of you up to date with all the changes in this ever changing industry. It is my hope to help you move through this frustrating and tedious process in an effective and efficient manner to help get you what you want in the time you want.
(Quote) We must use time wisely and forever realize that the time is always ripe to do right.
- Nelson Mandela
REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?
Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS
At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...
Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com
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