Even in Metro Oklahoma City where the unemployment is the lowest of any metropolitan area over 1 million, we have short sales and foreclosures. According to our MLS it is around 4% of recored sales by Realtors, so compared to the hard hit areas this is nothing. However, we have had job loss like others, people getting 100% Plus loans, and high debt ratios. When you throw in the job loss, add a little medical problem, and stir in a divorce, you have a volatile brew that calls for action. My team does short sales, and there are very few Realtors in our area with expertise coupled with the desire to do at least three times the work required of a non-distressed property.
As Realtors we all know the myriad of problems that confromt a successful short sale, even when we have a proveable hardship. Companies like BOA/Countrywideand Chase/WaMu, a combination of bureaucracy and a national overload of properties makes the work even harder. It may take four months or more to close, and often with the second or third buyer as people get tired of waiting. We are also dealing chages in guidelines. FHA now requires that the owners go through counciling. Fannie Mae now is involved in the approval process adding another layer, and another delay.
What is missing out of this mess, is the problem you have with homeowners. Remember we are dealing with distressed people, not just distressed property. CDPE, the Distressed Property Institute that my team belongs to, and now has over 11,000 members nationwide, has a survey you take with the homeowner. Depending on the score, a Realtor can decide whether to take the listing or not. I have a current short sale listing pending where I didn't do the survey. In fact. rather than getting to deal with the owners I have to deal with a Mother who is the worst client I have had in 20 years. As my dear departed dad said years ago, "Son, that's a horse that can't be rode". The quote is better without the proper grammar. Let's also do a checklist of other problems we have dealt with that are a barrier to a successful sale.
Bankruptcy Attorneys. In law school very little, and i mean little, is spent on real estate. Contracts yes, real estate no. Many of these attorneys do not understand the difference between the credit hit of a bankruptcy versus a foreclosure. They just know that if you put everything into a chapter 7 if all gets washed. Except the 7 years of bad credit versus the 2 years of a short sale. Be sure to ask them whether they are considering bankruptcy before they sign the agreement.
Tell the Truth. There is a reluctance sometimes for people to come completely clean. They are often embarassed to let you know that the IRS is on them, and that a lien is there or eminent. Knowing ahead of time, we are able to get these liens released from the house once they know that there is no money to be had from a sale. Other liens csn be tricky but need attention, and we often find that your low cost bankruptcy attorneys miss them. You might want to insist on a new credit report being pulled up.
Divorce. This can get tense especially when it is in progress. There are times when a future ex-spouse can get very self destructive in wanting to punish the other, and they end up hurting themselves. Make sure that if the divorce is not finalized that a separation agreement is in place, and an agreement on decision making is in order.
Gratitude. Let's face it, many times these folks are dealing with depression, and the guilt of failure among other things. There are times when they can be down right hostile. I am dealing now with a person who I consider abusive and if wasn't a short sale I woulod fire them. But remember, if you do specialize in short sales, you specialize in saving someones future. However, it only works if they want to be saved.
For more information on short sales versus foreclosure, go to www.avoidforeclosureoklahoma.com.
Comments(2)