Short Sale Tip of The Week 5-6-09

Posted on 06. May, 2009 by ctlms in Short Sale, foreclosure

Offers & Backup Offers....What to Send to the Lender?

The lender can say they want to see all offers, but the seller has the final call on what is sent in for approval. The seller "owns" the house, not the lender.  Your client, the seller, decides what is sent to the lender for approval.  Your "fiduciary duty" is to your client not the bank.

So what to do if you receive a higher offer after you have already submitted one to the lender?

Well it depends on the lender.  Some lenders will not allow you to just replace the offer that is under review and they will make you start the whole process over again.  If your seller is in foreclosure, they may not have time to do that and it may be best to proceed with the current offer.  If it gets approved, the bank will postpone the foreclosure if necessary.  If it is denied, they may be more inclined to review a new offer without starting over.

Other lenders will allow you to just provide the new offer.  However, your client cannot sign two offers.  The first offer is still valid until rejected by the lender.  So don't make the mistake of having your seller sign the second contract.  It can usually be submitted unsigned for review at that point.

But remember, a higher offer is not necessarily a better offer.  The buyer will need to close within 30 days of written approval from the lender.  So an FHA or CHFA buyer may not be a good buyer because of the time it takes to get loan commitment.  Now if that is the only offer you have, then submit it.  But if it is a backup and the first offer is lower but has easier financing, that is a conversation to have with your seller.

The banks like easy financing too.  They don't want to be waiting around after they have approved the deal.  Often in order to get an extension, the bank will charge the buyer whatever the per diem interest is in the loan that is not being paid.

And remember a new offer needs a new estimated HUD-1 too.

Often, all negotiations come down to the rapport between the lenders negotiator and the person negotiating on behalf of the homeowner.  Frankly, many loss mitigators don't really like working with real estate agents that they need to hand hold through the process.

The "average" loss mitigator at a major lender right now has at least 300 files they have to work on at any one time.  That is a lot of work to do and they are definitely over worked and under paid.

Also the mitigator is only a "middle man" and usually has to send the file for management approval anyway. If the file has PMI insurance, they may need to approve the deal as well.

Give us a chance to prove to you how easy and profitable short sales can be for you.

Have an awesome day and look out for future tips from us.

Sincerely,

Sean Wilder
Loss Mit Services
[email protected]

PS check out our online short sale processing system at www.CTLMS.com that keeps you, and anyone else you choose, up to date instantly, whenever there is a change to your short sale file.

Short Sale Tip of The Week 4-29-09

Posted on 29. Apr, 2009 by ctlms in Short Sale, foreclosure

Listing Price Changes        When & Why?

When listing a short sale, especially one in foreclosure, your seller is walking away from the closing with no money from the sale.  As long as the sale is approved by the lender(s) and the seller is relieved of the deficiency, the sales price makes no difference.

So why should you wait weeks or even months to lower the sales price if you have not received any offers?

You should not.  It is in your clients best interest for you to sell their property as quickly as possible, regardless if they are in foreclosure or not.

Reasons to be quick to lower the price if your client is behind on payments:

  • Every month that goes by is another month they are marked as late on their credit report
  • Every month their are more and more fees being added to their debt that must be negotiated away with the sale
  • The stress alone is worth getting it done asap
  • Even after an offer is received it can take months before a closing
  • The foreclosure may happen before you get an accepted offer, you need an offer sooner rather than later

Reasons to be quick to lower the price if your client is current on payments:

  • Every dollar they make in mortgage payments from here on is a dollar they will never see again.  They are no longer paying down principal because they are getting no money at closing.
  • It is more common for lenders to want the seller to sign a promissory note when they are current and have good credit.  They are better served getting the property sold and taking the money they would have been throwing away on that mortgage interest and putting some or all of it toward that low interest promissory note.
  • Once again, just being done with it is important enough to get it done.

As Real Estate agents you all know that "Price Sells", especially today.  So why waste time and money by sitting on a listing that you could have already had under deposit and be half way to a closing if you had lowered the price months ago.

Price reductions are also a great tool to use with the lender when negotiating a short sale.  A good listing history showing successive price reductions and no offers is a good indication of the proper market value to the lender.  You would not believe how often a BPO comes in EXACTLY at the listed price. 

So don't wait for an offer to come in at the price you think the property will sell for.  Start lowering it toward that price asap.

Agents that work with us to get their short sales closed, receive these kinds of tips right at the beginning of the listing process to make the deal as quick and painless as possible.  There are numerous "Tips & Tricks" to successfully getting paid your commission when dealing with today's short sales.

Give us a chance to prove to you how easy and profitable they can be for you.

Have an awesome day and look out for future tips from us.

Sincerely,

Sean Wilder
Loss Mit Services

PS check out our online short sale processing system at www.CTLMS.com that keeps you up to date instantly, whenever there is a change to your short sale file.

Short Sale Tip of The Week 4-22-09

Posted on 22. Apr, 2009 by ctlms in Short Sale, foreclosure

Real Estate Agents Must Embrace Short Sales or Face Extinction!

Let’s face it.  Homeowners today are faced with many different financial and personal issues; from interest rates being reset, to property tax hikes, to job losses.  These issues and many more, are forcing many homeowners to have to sell their homes. Which means that a vast majority of these properties will require a short sale or reduction in debt in order to get their properties sold!  And so in order for many of today’s real estate agents to stay in business, they must embrace short sales, or else look for another line of work.

In 2009, it is estimated that roughly 56% of all listings will require a short sale.  The fact of the matter is there will be no way around this.  And so for all of you real estate agents, you must understand that the majority of your listings will likely be over debted properties.  With the fact that there are not enough listings (with equity) for every real estate agent to pick and choose from, short sales are a must in today’s market!

The good thing about short sales is that just because you have to wait for the lender to approve an offer, doesn’t mean you won’t get paid.  Lenders understand that sellers can’t afford to pay closing costs (hence the reason they’re in default in the first place!), and so lenders pay the sellers’ closing costs for them, which typically includes real estate commissions, attorney or title company fees, conveyance taxes, delinquent property taxes, and all other common closing costs.

But everything else aside, it is essential that all real estate agents out there embrace short sales as a necessity to your business, or else you won’t have much business!  As challenging as they may be, they will make up the bulk of your listings, and in turn…the bulk of your income.  The current market conditions we cannot change.  However it doesn’t mean that there isn’t any money to be made by real estate agents, they just have to know where to look.

One question to ponder, for those of you that are still resisting doing or even learning about short sales…would you rather stay in the real estate industry or get a job? In my opinion the choice is easy; learn how to handle short sales! How to call, and where to turn.  Trust me when I say you will learn things you never knew existed and you will end up beating this down market and end up on top!

Give us a chance to prove to you how easy and profitable they can be for you.

Have an awesome day and look out for future tips from us.

Sincerely,

Sean Wilder
Loss Mit Services

PS check out our online short sale processing system at www.CTLMS.com that keeps you up to date instantly, whenever there is a change to your short sale file.

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