If you are a realtor, I'm sure you are aware of how difficult the market has been in the last several months. But, are you doing everything you can to get your listings sold?
I have spoken with many realtors recently that complain about the market, how long their listings stay on the market, the lack of activity, and so on. What I am interested to find in talking with these realtors is the number of them that have no idea that they are leaving money on the table, and doing a disservice to their sellers at the same time.
In a buyers market, the pressures of supply and demand are very clear. There is far more surplus than there are buyers willing to buy, so the buyer has the upper hand, and desperate sellers are getting in trouble and going into default in record numbers. By discussing a short sale with your seller, you very well may be able to sell the house, and help the seller to avoid foreclosure at the same time.
Are you asking your seller the right questions? Have they even told you that they are in default on their current mortgage? Approaching the subject of default with your seller may be difficult, but if you are not getting the entire story, you are not really in a position to perform the best service for your customer anyway.
Let's take a look at some things that you can do to make more sales, and help the seller to avoid foreclosure at the same time.
•1) Are you asking the right questions in the beginning? Most people in financial trouble will not necessarily volunteer this information to their realtor, and yet, as the realtor, you could be in a very awkward situation if you find out midway through the listing that the seller has been served foreclosure paperwork. Ask your seller how badly he (or she) needs to sell, and how urgent it is that they sell quickly.
•2) Next, you need to find out exactly what is owed on the property. If you know that there is no way that the property with a balance of $300,000 will sell for more than $250,000 in your area, then you will be doing a huge disservice to your client and wasting your time without discussing a short sale option. If you discuss it and find out that there is no way that the seller will drop the price that low, you know that you will not be able to sell it, and you can move on to the next listing. And, if you find out that they have to get out of this house to avoid foreclosure at all costs, then you know exactly how to proceed.
•3) Marketing a short sale is different than marketing a standard listing. There are benchmarks that you will need to follow in order to provide the best service for the client, and to provide the highest opportunity for the mortgage lender to accept your short sale offer when one comes in. For instance, you need to get the property on the market for a price that would reflect a full payoff to the lender if it were to sell. After establishing a history of absolutely no activity at that price, you begin to systematically drop the price until you begin to see activity. This is establishing the market price, and showing good faith to the mortgage company that you are making an effort to sell it for the highest price that the market will bare. When you finally get the price to a point where you get an offer, the next phase begins with the negotiation of the contract with the mortgage company.
•4) Negotiating the contract with the mortgage company will begin when you get a written offer. Each mortgage company will have a different set of rules to follow when it comes to negotiating a short sale, but there is always a dedicated department that handles it. You will ask for the "loss mitigation" department or the "foreclosure" department. They will ask you for the customer's name and account number, and they will require that you get written consent from the borrower to discuss the account negotiation on their behalf.
The important thing to remember is that the seller on the contract is your home owner, not the mortgage company. Even though you will be negotiating a payoff with the mortgage company, it will be the seller's name on the contract.
Also, you will be required to add to the verbiage of the listing itself that all contracts are subject to bank approval. This will keep you from looking like an amateur to the buyer and the other agent involved.
There is a lot more involved, but this is enough to get you started. Find out more about marketing your short sale listing at http://www.preforeclosurefsbo.com/ .
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