Bank Owned and Short Sales
Latest Bank Owned transaction went rather smoothly as the selling bank captured(net) .68/$1.00 based upon the previous purchase price of $940,000. Buyer was given guidance to bid at .60/$1.00 and we closely tracked the entire bidding process. Large down payment clearly gave our bid traction and the fact that we closed within 30 days of ratification was indeed a requirement. The banks are writing down the inventory and they are becoming more efficient at handling the third parties that have been outsourced to excecute a portfolio of distressed assets. Buyer was quite satisfied with the process.
We are seeing the Short Sale arena within Fairfax County season to over 1400 properties and the Bank Owned are holding steady at 410. The ability to reach across the table to help with the loss mitigation process for the seller is a critical leverage point in the short sale transaction. The fact that we visited the Closing/Title firm to express our genuine interest in helping the seller to conclude the hardship was an excellent way to meet the processor for the transaction and to expedite the process...the buyer that we were representing decided to back out 72 hours prior to close(first time buyer) despite the significant amount of time that we invested into capturing compelling value...we also contacted leading financial institution earlier in the process and provided valuation metrics that awarded a fresh look at the transaction and additional consideraton for underwriting...we were indeed going above and beyond for our client....and they have since returned to the brokerage for another transaction...the Short Sale arena will make you a more resourceful Realtor and allow for you to embrace the trend that now confronts our industry...we have consumers on fixed incomes attempting to service variable rate mortgage products.
Short Sale Second Trust Strategy...The Second will settle for as little as $3,000 to $5,000...the seller may need to prompt the process by going directly to the second trust to mitigate the loss by offering an enhancement to the value...decoupling the second trust is critical to a successful Short Sale...I would actually like to see the tax credit monetized within the scope of the transaction to offer the second trust the entire value of the credit $7,000 plus $3,000 to $5,000 allowing for more traction to decouple the Second Trust...we need to be creative, resourceful, detail focused and resilient when helping these clients.
The distressed inventory is the ultimate cross sell referral...value driven buyers will embrace the skill set that you deploy and return to the work product that captures compelling value...be aware that the funding profile of these buyers is defendable and they looking to buy on reason...not emotion...they like the metrics of the analysis...the emailed CMA...the MRIS zip code specific valuation/pricing history...the fact that defendable value now exists and these buyers are well funded....the value buyer owns this recovery and they are a different type of consumer...remember they buy on reason...the folks needing to sell are now selling on emotion....fear.
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Remember that profits are privatized and losses are socialized. Good night my fellow negotiators.