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Everybody Wants To Do A Short Sale!

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Real Estate Agent with Benchmark Realty TN 288457

Everyone is talking about it, they have clients who they fell might qualify, the banks are foreclosing on so many houses why want the work with my client?? 

Well the truth be told, not every client who is late on their mortgage payment will or should qualify for a Short Sale. See the rules have not changed for qualifying for a Short Sale, the Market has dramatically changed and now once something that was thought of as a last resort has become Option # 1 when the owner can't sell their house for a profit or breakeven. This isn't going to turn into a lecture on poor financial decisons, bad loans, greedy Lenders and REALTORS, it is about the fact that banks have always had this Option, Short Selling a mortgage, for their clients who have fallen on an economic hardship that can not be resolved.

I have advised 6 homeowners in the past 10 days on the Short Sale process as it pertains to their situation and here is the biggest AH HA Moment.... When we do a Financial Analysis and they earn enough money to make their house payment, taxes, insurance, life insurance, utilities and purchase food and only to find out they are not a candidate for a Short Sale! See protecting your quality of life and assistning you in maintaining a certain lifestyle is not a part of the equation. Banks are in the financial business, they loans money on houses but also on cars, boats, and credit card...and asking them to lose $15-29k so you can keep your car and your VISA card isn't a part of their solution.  You must prove your inability to pay the house payments, taxes, insurance, utilities and put food on the table....By the way Direct TV NFL Sunday Tickect does not qualify as a utility expense..LOL  but 1 family thought it should :(

See somewhere out there is or will be a person selling a Self Help Book proclaiming to the world that they can sell their house, save their credit and not lose a dime....& further claims that the bank will allow you to "Walk Away" from the defeciency created by the Short Sale etc.... $29.95 on PAYPAL and when you are finshed you are in no better financila shape just light $30 bucks in your wallet....or a credit card they can't make payments on LOL :(

Listen, if you are an agent interested in helping customers with this process join our discussion group here on Active Rain. If you are a consumer who needs help, call a real estate broker..possibly several different offices and ask them if someone in their firm specializes in Short Sales, schedule an appointment and listen and be honest about your situation. Also note that statistically 30% is the average of owners who qualify for a short sale.

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R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

Great post!  I will say that lenders are seeming to get easier to work with now that they see that the market isn't going to cover them in a foreclosure.  They also seem to be more willing to work out a doable work out plan.

 

Bob Mitchell

ValueList Real Estate Services,Inc. 

Aug 05, 2007 03:22 AM
Anonymous
Tiffany Ireland

You are so very right about this.  I have first hand experience with mortgage companies not working with me on short sales.  Not so much because the seller did not qualify, but because the mortgage company decided the property is worth more than the current market is willing to allow. 

One of the biggest problems I have found with working on short sales is figuring out the learning curve for each mortgage company and how they deal with short sales.  There is an immense amount of paperwork, follow up and some times it can take as long as 3-6 weeks just get things started.  It was fustrating to me to do all that work and then sometimes have the mortgage company say they would not be willing to take less for the property. 

I have started working with a company by the name of Fresh Start Solutions. They negotiate with the bank for me while I market the property.  They have been doing this since 1991 and I have found it to be a great relief.  They initiate and handle all the negotiating and follow up with the mortgage company.  I still get a commission if their negotiating skills are successful and I don' t have near the investment of time and effort that I did before.  So far it has been great.  

What is really fantastic is that I don't have to pay them a dime.  With their great negotiating skills they negotiate a spread between what the bank is willing to take on a short sale and what a market value buyer is willing to pay for the property.  If Fresh Start is not able to create a spread, they still move forward on getting the property sold.  He does enough buisness that it averages out.  And trust me he works really hard to make himself a spread. 

I just thought you might like to know that there are other options out there for agents who are swamped with with short sales. 

Aug 08, 2007 03:03 AM
#2
Lynn Pineda
eXp Realty - Boca Raton, FL
Real Estate Promises delivered in SE Florida

This is some reallly useful information from all of you.  Those of you doing the short sale negotiations and process yourselves, do you charge any fees above the normal commission that you would receive from the listing? I realize that your commission is up for negotiations also with the lender, but I'm wondering whether or not Realtors charge a set fee up front to process the short sale whether or not the sale would be approved by the lender.  I'm just starting with Short Sales and have heard lots of variations here.  Any insight would be great.

Aug 08, 2007 07:20 AM
Arina Hanciulescu
RealtyPros - Las Vegas, NV
RealtyPros
As the current waves of Short Sale is swiping the nation I guess that a lot of Real Estate agents had to get involved in helping their clients. But as people we need to make a living too and commissions are very important. It should be a way to get a Realtor fee, maybe not upfront to process of the short sale but definitely at the end of the process...
Aug 09, 2007 10:08 AM
Kathy McGraw
CELLing Realty - White Water, CA
Riverside County CA Real Estate
Personally I don't do short sales.....I give the client resources, and help answer their questions, but I chose not to do this type of sale.  Too much liability for my liking.
Aug 12, 2007 06:04 AM
Lynn Pineda
eXp Realty - Boca Raton, FL
Real Estate Promises delivered in SE Florida

There's a lot going on with a short sale, you're right. I use a short sale disclousure that the seller and agent and buyer and agent signs noting potential situations that could affect the short sale, including that the forgiven debt may be a taxable item and the seller should discuss with a tax accountant.

Aug 14, 2007 02:53 AM
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