The List
What Comes with your Sitting Bull Home?
Dishwasher, Disposal, Microwave,
NEW Stove/Oven
NEW wood flooring
Sliding Glass Doors to outdoor patio
NEW Light fixture
Triple Bay Window with seat/storage
Wood burning Fireplace with Gas Starter
Decorate Tile landing
NEW Carpet
NEW Paint
NEW Hand Troweled Textured Ceiling
Ceiling Fan with Light kit
Triple Bay Windor with Seat/Storage
Mirrored Closets
NEW Carpet
NEW Paint
NEW Hand Troweled Textured Ceiling
Ceiling Fan
Sliding Glass Door access to Spa
His/Hers Sinks
NEW Carpet
NEW Paint
NEW Hand Troweled Textured Ceiling
City Half Acre, .440 acre, 19176 sq ft
Lot dimensions 104 by 153
Corner lot access on both Sitting Bull and Sholic Roads
Mature Trees/shrubs
Spa/Hot tub on seperate permanent cement foundation
Post and Pole (dowel) decorative FrontYard Fencing
RV access at Back Yard
Heat/Ac Forced air
Water Heater Natural Gas
City Water
Attached 2 car Garage /Bonus Room
Composition Shingle Roof
Exterior Stucco
Chain link fence at BackYard
What do you need to finish? As of March 2007 paint the eves, plant some trees
put some shingles on the roof, and some elbow grease this is a great home.
With an Real Estate agency like Exit Desert Ocean Realty you get so much more as a client and as an Agent check out the information about Victorville's largest real estate office!
Have you thought about contributing to world vision?
How many of you are in a short sale market?
What Does a Realtor Need be successful on Short Sales?
Could this be an area for you?
I will tell you what you need to success on short sales.
1) Patience.
2) Persistence.
3) Skills for problem solving and Skills to negotiate with lenders.
4) Daily Follow UP (1 voice message daily).
5) Practice makes perfect, you need practice, practice and practice, you will get more experience on how to deal with this branch of real estate
When is time for a Short Sale?
Unluckily, short sales have been common these days on many states, here in Colorado, they are a bad REALTY for many home owners, usually home owners they own more than their home is worth
There are some factors that could drive you to a short sale.
* Pay option ARMS (No Equity thanks for the minimum payment option).
* 100% Financing (No Equity).
* Buyer's Market (Usually depreciation and excess of inventory).
* Homes bought over priced (Inflated appraisals).
* Refinanced to 100% or more than 100%.
* When you are in a Buyer's Market and you are not able to Refinance your home.
* Your economic situation is upside down and you are not able to afford the mortgage payments (late mortgage payments).
* Net proceeds do not cover Realtors Fees and closing costs.
* You are passing through a divorce.
* Job Transfers.
If you are facing one of these problems, please call a Realtor with enough experience on this Branch "Short Sales" you have a choice to elect to sale your home as a "Short Sale", you will avoid "Foreclosure".
Be prepared with these tips to influence a BPO
* Provide the appraiser, real estate agent, broker comparables that you have found.,
* You need to have solid comparables
* Why do you think that your comparables should be considered?
* Condition report from the real estate would be a good idea to provide together with your comps.
* Do not go against the BPO, just give your considerations / opinions..
You can get a discounted substantial short sale!
Phone Numbers to work on you short sale!
Washington Mutual- Loss Mitigation
Phone: 800-496-9633
phone: 904-281-3900 Collections Dept.
Phone: 866-356-5789 Foreclosure Dept.
Fax: 818-775-2010
Bank of New York- Loss Mitigation
Phone: 212-495-1784
Fax: 212-415-2035
Wells Fargo Loss Mitigation
Phone: 800 or 888.231.0757
877) 216-8448 Loss Mitigation
(800) 551-9808 Borrower Assistance
(800) 868-0043 Home Owners in Foreclosure
(800) 352-7654
Citi Mortgage -
Loss Mitigation 800.682.2286
Foreclosure 877.202.3846
Loss Mitigation 866.357.6015
Loss Mitigation Fax 248.488.7727
Workout Fax 248.488.8357
Loss Mitigation 866.357.0614
First American 800.511.1278
Workout Fax 636.256.2884
Citi Financial
Foreclosure 800.424.3562
800.423.8158
800.848.7491
Dial by Extension 800.888.6001
Cendant Loss Mitigation
Phone: 800-750-2518.
fax: 856-917-8334
Homecomings Loss Mitigation
Phone1: 800-206-2901
Phone2: (858)-874-7417
Litton Loss Mitigation:
Phone: 713-966-8803
Chase Loss Mitigation
Phone: (510)652-0401
Saxson Loss Mitigation:
Phone1: 262-502-6724
Phone2: 817-665-6537
Phone3: 414-278-8068
Nat City Mtg. Loss Mitigation
Phone: 937-910-3563
Home Side Loss Mitigation:
Phone: 904-281-3900
Whitney National Bank's Loss Mitigation :
Phone: 1-800-347-7272
Fairbanks Loss Mitigation :
Phone: 888 818 6032
customer service fax 904 232 4607
American General Loss Mitigation:
Phone: 770 614 6005
Fairbanks: Loss Mitigation :
Phone: 801-270-7713
First Horizon Home Loans
Phone: 800 707-0139 ask for ext: 17305
Chase Manhattan Mortgage
Homeowners Assistance Department (foreclosure)
phone: 1-800-446-8939
Fax: (614) 422-7259
additional numbers
1-800-981-3792
fax 1-858-605-3006
Countrywide Loss Mitigation:
Phone: 800-669-6607
fax: 800-658-0395
Bank of America.
Loss Mitigation: 1-800-846-2222 or 716-635-2000
Authorization Fax: 716-635-7265
Short Sale Package Fax: 716-635-7255
Short Sale Documents List From Seller
Short Sale Documents from seller
This is a list of documents the lenders typically request from the seller along with any lender documents for a short sale package:
* Hardship letter - This should be handwritten by the seller if possible explaining their situation and requesting the lender to do a short sale.
* Tax returns + W2 - Federal only ( most recent 2 years ).
* 2 most recent bank statements & 401K & IRA accounts
* 2 most recent pay stubs
* Documentation supporting your hardship if the sellers have any, termination letter, disability letter, doctors bills, etc.,
Remember:
* That list can vary from lender to lender, but this is a general, this is a must!!!
* Always Prepare a complete Short Sale Package,
* Never send an incomplete short sale request, they can ignored it or throw it away if that is the case.
* Here in Colorado takes between from 30 to 60 days for a short sale acceptance or approval.
* Always call them once daily, but just once, do not bother them.
* Lenders daily have Short Sales requests around 300 to 400 daily, so you can imagine how busy they are, at least these days on this market
So do not expect that they will call you soon or to give you a follow up next day or daily.
After that, have fun and learn about every lender.
The don'ts of a Short Sale
1) Don't ever fax a short sale to the seller's lender in the listing phase
2) Don't ever fax an incomplete short sale package to the lender. They Receive around 300 to 400 requests a day for shot sales, if it is not complete they will not begin to process it and they might toss it.
3) Don't ever tell the selling agent we should hear in a week or so, Be honest
4) Don't ever submit a short sale package to the lender if that lender has taken the property to foreclosure sale and you are in the redemption period. YOU CAN NOT DO A SHORT SALE IN THE REDEMPTION PERIOD, I have been told by other guys that is possible, LOL :)
5) Don't ever recommend that the buyer do their inspection and appraisal before you have approval on the short sale.
6) Don't advise the seller to move out the property, especially when they have an FHA Mortgage.
"SHORT SALE" TRANSACTION PROCEDURES
In the current Real Estate Market we are seeing more and more listings subject to a "Short Sale". This is a property sale wherein the amount owed the Lender(s) exceeds the current market value plus the costs of sale (Escrow, Title, Commissions and etc). In almost every case involving a "Short Sale", the Lenders are asked to accept less than what is owed them and must approve such a request. Our industry commonly uses the term "Short Sale", though Lenders may call it something else. By any name, it is a contingency of sale that must be disclosed and both Buyer and Seller must agree to. Please be advised that as a condition for "Short Sale" approval, Lenders often require that the Broker commission be reduced! Also please understand that lack of full disclosure in the MLS that the commission is subject to Lender approval and may be reduced is potentially very problematic for the Listing Agent.
Many of us are veterans of the last market involving a lot of "Short Sales". Our experience was that they were often handled very loosely and therefore there was a lot of time wasted on them by Buyers, Seller and their Agents. The California Association of REALTORS® (CAR) has carefully corrected many ambiguities regarding "Short Sale" policies and procedures in previous CAR forms. "Short Sales" need to be handled differently than most "standard" transactions. We have reviewed our past experiences, our present contracts and forms resources and the current market and have compiled the following. Please consider the following as our Company policy on transactions involving Short Sales:
1) All of our Listings involving Lender approval of a "Short Sale" must clearly be identified as such in the MLS by:
a) Checking the LENDER APPROVAL box in the CONTINGENCIES field of CRIS-Net MLS (or other similarly named boxes and/or fields of any other MLS where the listing is placed).
b) Placing the following language in the AGENT REMARKS section of CRIS-Net MLS (or other non-Public Remarks section of another MLS: "The amount of Broker commission is subject to Lender approval. Any reduction of commission to be shared equally between Listing and Selling Offices". Without this disclosure, the Listing Agent is obligated to pay the Selling Office whatever is represented as Selling Office Compensation ("SOC") in the MLS---even if the Lender mandates the commission be reduced as a condition of "Short Sale" approval.
2) All Sale transactions involving "Short Sales" should include a PURCHASE AGREEMENT ADDENDUM (CAR form PAA) with the following procedures:
a) Paragraph 5 on page 2 of form PAA is checked and a date (45 days is suggested) by which a Lender must approve the "Short Sale" must be inserted.
b) When writing an Offer, form PAA should be included as an Addendum to the RESIDENTIAL PURCHASE AGREEMENT (CAR form RPA-CA) and noted as such in Paragraph 25 B of form RPA-CA. Be sure to also indicate it's Paragraph 5 of form PAA (and any other appropriate Paragraphs checked) that's being included.
c) If form PAA is not included with a Buyer's Offer it MUST be included as a condition in a COUNTER OFFER (CAR form CO) by checking Paragraph 1 D on the COUNTER OFFER and noting "CAR form PAA".
d) Depending on the property type and transaction, you may need to use another CAR Purchase Agreement. You will find the equivalent of the RPA-CA's Paragraph 25 B in those CAR Purchase Agreements.
3) Regarding OPENING ESCROW, BUYER'S INITIAL DEPOSIT, INSPECTIONS and CONTINGENCY PERIODS, "Short Sale" transactions should use the following procedures:
a) Until Lender approval of the "Short Sale" is secured:
(i) Escrow should not be opened.
(ii) Buyer's Initial Deposit should be returned to Buyer.
(iii) The Buyer should not be expected to conduct any of their Inspections.
(iv) The Buyer should not be expected to remove any of their Contingencies.
b) Insure that items (i) through (iv) are included as terms in the transaction by using the following verbiage, "Time periods in the Agreement for close of Escrow, inspections, contingencies, covenants and other obligations shall begin and Escrow shall be opened the day after Seller delivers to Buyer a written notice that a "Short Sale" has been approved by Lender(s). Buyer's Initial Deposit shall be returned to Buyer and Buyer to deposit said funds with Escrow holder within 3 days after Escrow is opened".
c) The above verbiage should be placed on ADDENDUM No. ___ (CAR form ADM), included as an Addendum to form RPA-CA and noted so in Paragraph 25 D of same.
d) Absent inclusion of the above verbiage on an Offer, it should be placed in a Counter Offer or included as an Addendum to a Counter Offer.
4) Beware of some of the realities involving "Short Sale" transactions, not limited to:
a) Depending on the Lender, their policies and Seller and/or Seller's Agent cooperation with the Lender, approval of a "Short Sale" can take 45 days or longer.
b) Lenders will likely require a thorough review of the Seller's financial situation including assets, bank statements, real estate owned and etc.
c) Lenders often require the Seller to contribute some cash or execute a personal note in favor of the Lender as a condition to approve a "Short Sale".
d) Lenders may consider a "Short Sale" to multiple Buyers concurrently and without consideration or regard to any particular "order" the Buyer and/or Seller believes Buyers are in.
d) "Short Sale" transactions often fall apart when Buyers lose interest in waiting for approval and want to cancel their purchase.
e) In cases where a Buyers does cancel, many may suggest the Seller continue to seek Lender approval and not mention the cancellation unless asked by the Lender.
f) Seller's should be advised to seek legal and/or tax advice from appropriate professionals regarding any "Short Sale".
The foreclosure crisis is a super hot topic these days! When there's a huge crisis like this happening around the nation, it inevitably means there is the potential of homeowners being taken advantage of. It seems that everyone, including investors and real estate agents, is attempting to procure a solution to help homeowners in need of rescue, yet so many of these homeowners are unneccesarily being taken advantage of. Due to the dire situation they're in and the sense of urgency in the matter at hand, these folks are in an extremely vulnerable position. They're getting bombarded with letters from every investor and real estate agent in town. Most homeowners are uneducated as to what their options are when facing foreclosure. When a homeowner is a few months behind, all they can wonder is if the sheriff will show up on their front door step at any minute and tell them to leave immediately. In most states, there is a process that has to be followed when a homeowner becomes delinquent on their mortgage payments and their mortgage lender files for foreclosure. Luckily, many homeowners in various states can turn to "Foreclosure Hotlines" as a resource for becoming more educated on what their options are when facing foreclosure. On the other hand, there are hundreds of thousands of homeowners that, regardless of how educated they are on what their options are in foreclosure, many have to place their house on the market and attempt to sell it for what may be less than what is owed to the bank. When this occurs, this is what is called a "Short Sale". In an effort to avoid the foreclosure process, banks will sometime accept less than what is owed as payment in full. Many banks have guidelines that have to be met before they even consider the homeowner for this type of transaction. Banks require for the subject property to be actively listed on the market before considering a short sale. Banks also require a real estate agent to facilitate the short sale transaction. Here's where the problem lies. Most real estate agents don't know how to effectively facilitate a short sale transaction. Many don't even know what a short sale is. When they attempt this type of transaction, they usually end up shooting themselves in the foot and having a bad experience. Then, they go to all their fellow colleages and encourage them not to do this type of transaction because they feel they're too difficult and because they personally had a bad experience and a transaction. Therefore, homeowners are unnecessarily facing foreclosure because many real estate agents don't want to step up to the plate, work the short sale transaction, and save them from foreclosure. Currently, most banks are so busy tending to homeowners who are delinquent that they simply don't have the time to teach real estate agents what they require in terms of the criteria needed to seriously consider the homeowner for a short sale. We have interviews many loss mitigation reps over the years and they say real estate agents are the number one source for most of the frustrations they experience in their daily tasks. If the banks aren't taking the time to teach real estate agents what they need in a short sale and how to effectively process the transaction, then who is?
America's Home Rescue, formerly Austin Home Rescue, is providing the answers that many real estate agents across America are asking. What is a short sale? How does one work? What does the bank need from me in order to consider the homeowner for a short sale? How can I avoid the frustrations commonly associated with this type of transaction? These are the questions commonly asked by real estate agents. America's Home Rescue has become increasingly motivated to educate and inform the general real estate community, especially those in high-foreclosure areas around the country. They are based out of Austin, Texas and the primary focus of their company is helping homeowners in foreclosure and educating the general real estate community, primarily real estate agents, on how to effectively do short sale transactions, earn a commission provided by the lender, and ultimately save a homeowner from foreclosure. They have been down in the trenches doing short sale transactions and representing homeowners as their real estate agent for the past 5 years. They have meticulously documented, studied, and have applied effective systems and solutions to getting these transactions closed! They have experienced the great rewards of witnessing many homeowners walk away from a potentially devastating situation and are now relaying the news across America that there is effective short sale education for real estate agents. Most of the education available on short sales is written by investors for investors. There is limited to no formal education being provided by real estate agents to real estate agents. America's Home Rescue has produced an array of solutions focused on educating other real estate professionals around the country. In fact, they have 2 TREC-approved MCE courses they offer focused on teaching real estate agents how to do a short sale transaction effectively. By doing this, their hope is that much of the real estate community will know how to effectively conduct a short sale transaction and will ultimately lead to a reduction in the foreclosure rate across America.
If there is anything you can do to help us get the word out regarding this education for real estate agents, we would appreciate any assistance you might offer. Please feel free to give us your comments regarding this post.
Please feel free to contact us at 512-261-9200 or Toll Free at 888-699-9222. You can also visit our website at www.ShortSaleSolutions.biz.
http://activerain.com/action/blogs_admin/www.ShortSaleSolutions.biz.
recently attended a seminar sponsored by the REBAC (Real Estate Buyer's Agent Council) of NAR (National Association of Realtors) titled 'FORECLOSURE OPPORTUNITIES FOR BUYER-CLIENTS." This course is approved as an elective for the ABR (Accredited Buyer Representative). Although geared to present us with opportunities for our buyer clients, I was hoping to get information that could be used on listings. From the first day I started in real estate I have been focused on listings. I was fortunate that my team, the other 6 real estate agents at my round table, were also focused on listings! As each assignment was doled out to the teams we always turned the question around and looked at it from the listing side. Especially when the instructor went out of her way to impress on all that if you get involved in a pre-foreclosure transaction involving a unlisted property you could easily get caught in a situation of implied agency!We all understood how that was very likely to happen. Just think about it... you ask the seller for information about their mortgage balance, other possible liens or judgements against the title of the house, property disclosure ( a law in our great state of NJ). Most of these questions are exactly the same questions a real estate agent would ask their seller clients. We all agreed that we would list the house before introducing any perspective buyer. Okay, so now you have a listing that is in pre-foreclosure. If you have a buyer to introduce, don't be afraid to do so. A distinctive feature of short sales is that the real estate agent is typically compensated by means of a fee negotiated with the lender, not by the seller or buyer. So go ahead, write up a Contract of Sale, make sure that it si subject to lenders approval of a short sale. make sure you also add a Hold harmless clause. You also want to request that the lender agree to mark the loan as "paid as agreed". Be sure to council both parties that this could take time. If time is of the essence, then this might not be the right property for this buyer. Now what to do next? First, get the seller to sign a release authorizing their lender to disclose information to you regarding their existing mortgage, do this on all mortgages against the title. Now you will know what the seller owes the lender. Nest step is determine if the seller owes more than the market current market value. Let's assume this is the scenario. Now you call the lender and ask to speak to the LMS (Loss Mitigation Specialist-the person who is responsible for determining if a workout-plan is possible) and ask that they please send you their short sale package. Don't ask if they would consider a short sale, assume they will. What is a short sale?A short sale occurs when the lender decides that it is in their best interests to sell the property for less than the mortgage balance owed on it. Do recommend that your sellers and buyers involved in a short sale get legal council, a attorney could really be helpful down the road. Once you have the short sale package from the lender you need to take a very careful look at the lenders list of requirements to consider the short sale. If it's possible to comply with most of the requirements then put the package together ( get the lawyers to help too) and send it off the the LMS. At this time it is important for the buyers to do some due-diligence. A short sale can be a high risk endeavor because of unknown baggage. It's time for the buyer to have title searches done to determine if there are any other liens or judgements against the title of the property in addition to the sellers mortgage(s). The good news is lenders are not eager to initiate foreclosure, they do not want to maintain an inventory of foreclosed properties. Banks are in the business of lending money, not owning real estate. As you and the seller and the buyer and the lawyers are preparing all the documents required for the lender to decide on the short sale, the lender will be ordering an appraisal to determine the current value of the property. When all the information and documentation is ready the lender will review the package and make their decision. I have had this go a number of ways, either agreeing to the short sale, refusing the short sale or asking for more money, in essence a counter-offer. The lender will base their decision on the current value of the house and if the seller is walking away with any equity. The lender will be looking for current market value and if there should be any equity the seller will have to roll that into the sale. You have a good chance that the short sale will be approved if all the figures are in order. Remember, this process takes time! The good news is that you can help the seller avoid a foreclosure and at the same time get a buyer happily involved in home ownership at a good price! More to come in future blogs about other alternatives to foreclosure.
1. Gaining Control of Title; Authorization to Release Information. One of the most important steps in the short sales process is getting the deed. Without the deed, the homeowner can back out of the potential short sale even after you have spent hours working on their property. When the homeowner signs the deed over to you, now you control the property and you can go to work by calling the bank. If you cannot secure a deed, you must have a contract with the seller that specifies the terms of the transaction with a discounted mortgage pay off - e.g., closing is to be as soon as possible, but expressly contingent upon a successful short sale on terms approved by the buyer.
The other essential document is a signed Authorization to Release Information signed by the sellers. Without one, the lender will NOT talk or otherwise discuss the seller's loan with you.
2. Contacting the Lender. When you call the lender, you never want to tell them you are an investor. This is one of the biggest mistakes rookies make and will almost always result in the lender not accepting short sales. Therefore, when you call the lender, to request a "short sales packet" or "workout package," indicate that you are the buyer or that you represent the homeowner. Sometimes they may ask if you are a real estate attorney. Just restate what you told them before. Then you'll want to request the "short sales packet" or "workout packet". When the packet arrives it will explain exactly what you need to make this short sales deal successful. Generally among the things you will need to document are distress concerning:
(A) The distressed nature of the seller (see paragraph 3 below).
(B) The property: list out all defects to the property and needed repairs to make it marketable (including price estimates). Photos of any major defects can speak volumes to a lender.
(C) The neighborhood where the property is located: is there a crime problem? What are the number of days on market for sales that have occurred and are they below assessment and/or past sales? One web site that may help in checking comparables is http://www.zillow.com/. The other option is to secure comparables through a realtor who is experienced working with investor properties. Remember that many of your big established real estate companies may NOT be familiar with short sales, so do your homework on any realtor you decide to use.
(D) Itemize in detail the lender's cost of not doing the short sale: (1) foreclose costs, (2) bankruptcy costs if the sellers file either a Chapter 7 or 13 under the Federal Bankruptcy Code, and (3) the costs the lender will face if it ends up bidding in the property at foreclosure: (A) repair costs, (B) costs of marketing and selling the property, including realtor commission, and (C) carrying costs, including insurance and real estate taxes.
Lenders do not like to end up owning property, so the more data provided in 2.(B), (C) and (D), above, the more apprehensive the lender will be of holding out for a full payoff amount.
3. Hardship Letter. A hardship letter tells the lender why the homeowner is not making their mortgage payments. If a job loss or family illness is the cause, explain it in detail and make the lender feel sympathetic, and seek to secure for the seller a Waiver of Deficiency - i.e., a no-collection agreement where the lender agrees to write off of any discounted balance and not pursue collection against the seller. The letter should suggest that the seller is contemplating filing bankruptcy, but would prefer to avoid doing so, if at all possible. Be prepared to provide documentation: sometimes lenders will request bank statement, pay stubs, income statements, and so on to document the hardship.
Remember, you must be prepared to send them everything they ask for because if you don't, the short sale will not be accepted. They will almost always ask for a HUD-1 and a real estate purchase and sales agreement. Have your real estate attorney's office prepare a draft HUD-1 and make sure that you have included all amounts payable by the seller for judgments, delinquent taxes, if any, and any other liens (e.g., homeowner association dues). Send everything the lender asks for back ASAP. It usually takes 3 weeks or more to get an answer back from the lender, so you can't afford to wait. If the foreclosure auction is approaching, you can ask to extend the auction which in most cases they will, if they know it is a legitimate offer.
4. Broker's Price Opinion. Basically a real estate agent will come out and give their opinion on what the house is worth in the form of a Brokers Price Opinion ("BPO"). The key to short sales is the BPO. A glib letter will not suffice. The BPO needs to be documented and show supporting market time to sale and final sale information as available. You want to try everything you can to influence the BPO to come in as low as you can in order to induce the lender to discount the loan payoff.
5. Letters of Recommendation. If you have successfully closed short sales previously, obtain a letter from the lenders involved that will help convince the current lender that you can deliver.
6. How Much to Offer. Part of the answer to this question is a function of what you intend to do with the property. If the intent is to rehab it, then the offer should be calculated to allow for satisfactory rehab costs and a profit margin after sale. If the intent is to wholesale the deal, then the offer should be lower to build in an assignment fee and still leave in factors for rehab costs and a profit margin for the ultimate purchaser under the short sale.
No, I am not talking about selling a pair of shorts, but the graphic does seem to fit with the title :)
A short sale, in basic terms means to sell below value. More specifically, in real estate, it is when the bank (or lienhlder) will allow the sell of a property for less than what is owed on it - sounds great, right?
Short sales are great when they are needed. They offer a homeowner the chance to get out from under a house that they may be "upside down" in. Many times, short sales are used when a negative market fluctuation hits an area. Imagine that an area that has had high appreciation for several years in a row. Usually, out of state investors will fuel a high appreciation period, however, once an equlibrium is found, it may start to fluctuate the other way therefore creating problems for people that may have bought at the end of an upward appreciation.
Other factors that may drop property values may be a lack of deferred maintenance. The easiest way to put this is that the homeowners let their house go to - well, you know. A trailer park may have moved in across the entrance from a nice subdivision, or a declining commercial area may have been rezoned industrial, therefore plummeting the value of local housing within the immediate area.
The point is - there are many factors that may play a part in depreciating propertie. To list them all could take all night, but the basic point of the matter is that property does depreciate.
When your property is worth significantly less than what you owe on it, you may need to ask the bank for assistance to be able to sell it - this is the basics of a short sale. Don't you wish it were that easy? Well, in truth, it can be. Keep in mind that many people take advantage of this practice and are commonly referred to as equity thieves. They may use a short sale to devalue your home for the sole purpose of purchasing at a reduced rate and selling for a significant profit. If you are a consumer reading this - I highly suggest talking with a competent real estate professional, attorney, and/or accountant before signing anything to do with a short sale.
A short sale consists of only a few steps - just lots of paperwork. While there is no such thing as "standard commission splits" because of The Sherman Anti-Trust Act, you can expect agents specializing in short sales to charge commissions that are higher than what you may be quoted for listing a property because of the added paperwork and liability.
The steps of a short sale:
1. Initiation - In order to start a short-sale, you have to initiate it with the bank. If you wait until you have an offer on the table, you could be too late unless the purchaser is willing to wait at least 3-4 weeks for an answer on their offer. A good real estate agent should be able to calculate fair market value on a piece of property within a few minutes. If you see that your market analysis is significantly lower (I generally look around a $10k difference) than what the seller owes on the property, I would discuss the possibility with them and get the information on how their lienholder handles short sales.
2. Calling the bank - The bank will undoubtedly route you through several different departments before you get in contact with the person you need to speak with. Tell whoever answers the phone that you would like to talk to someone about the company's policy on short sales - don't give up. When you finally get in contact with the person you need to speak with - BE PREPARED. You need to have your clients' full names, social security numbers, dates of birth, and loan number(s). You may need to have a form signed by them stating that the bank has the okay to speak with you about the loan as well - if this is not incorporated into your listing agreement, a good attorney can draft you one for probably around $100 or less. If you know an attorney that you do a lot of business with - they may even do it for free.
3. Getting Estimates - When speaking to the bank, you may need to give professional estimates. A CMA will give you an idea of market value - make sure you have comparables that are very similar and less than ½ mile from subject property. If there are repairs needed on the property it would help to have a contractors bid (two similar bids are helpful). The bank will most liely want these figures if you can provide them.
4, Preliminary Confirmation - A bank will never give you a "guarantee" but you may be able to give you a preliminary confirmation. This generally will consist of you asking if they think they can work it out and the banks asset department saying , we may be able to get it down in the $$ range and to check back later. If they say they cannot comment leave it alone - at least they know what you are doing and are now working off the same page.
5. Getting an Offer - List/Market the property the same way you would any other. In your disclosure documents, you will need to disclose that the sale price of the home is contingent on successfully negotiating a short sale with the lienholder and that all offers should give no less than a 10 banking day acceptance period. This will alert the other (buyer's) agent as to what is going on. You may need to explain to the buyer's agent as well. They will understand best when put into plain terms - "Mr. and Mrs. Smith owe significantly more than we have the home listed for. We need to negotiate this offer through the bank in hopes that they will come down" - The seller should also know that you are letting agents know this - I have had very little problems with people low-balling just because of this and when they do I explain to them the negative sides of a short sale to the seller which would prohibit them from taking anything less than fair market value (explained later).
6. Submitting offer to bank - Much like a foreclosure, a short sale must be negotiated through the bank. You will send them a copy of the offer with a proof of funds or loan COMMITMENT letter - this highly improves your chances of an acceptance if they know the buyer is qualified. Submit the offer, ask for an anaswer as soon as possible so you don't lose the buyer. Be honest with the lender - tell them your opinions of the offer just like you would the seller. You are basically representing the bank as your client now, even htough an official agency relationship has not been established you are acting in the capacity of an agent to the bank and therefore have created an "implied" agency relationship.
7. Wait for answer from bank.
8. Call bank 3-4 days later - inquire about offer.
9. Wait for answer from bank.
10. Call 3-4 days later (we are now at day 6-7)
11. Call bank and let them know offer expires in two days
12. Call bank the day before expiration of offer and let them know you may lose the buyer if they do not respond.
13. Get phone call from bank - This will generally happen a day or two after the original contract period has passed (law of averages). If you get an accepted contract by bank, you must have the purchaser sign an addendum stating that they are willing to complete the transaction (since the bank took so long and their offer expired). Sometimes, you will get it before the time expired but the banks never do anything quickly :)
14. Go to close as normal - You will forward the contract to the closing agent mchas normal. When the closing attorney calls for payoff, it is GENERALLY dropped to the purchase price, however, due to some banks systems, they may have to talk directly with the asset manager you spoke with - make sure the attorney has all the information to contact this person.
Keep in mind that the bank may say no. Unfortunately there is not much you can do as a real estate professional if this is the case. Most banks will say yes and this is why:
If a bank has to foreclose, it costs them thousands of dollars and then they have to sell it for market value, often at a LOWER value than what you are offering because it is a foreclosure and often the owners tore the place up on their way out. If they sell it as a short sale, they skip foreclosure and generally net more.
Most banks will 1099 the sellers for the difference between the owed amount and the sale price. It is considered income which means it is taxable - make sure your clients talk with a tax attorney or CPA. Remember we are not attorneys or accountants and should not represent ourselves as such unless you are. Some banks may get a vluntary jugement signed by the sellers in order to do the short sale - again, have them talk to attorney or CPA about what this means to them.
I hope this answers most of your questions about "what is a short sale" or "how does one work". I know this was a long post but I tried to condense it as much as possible. You will learn more about a short sale the first time you do one, but this should at least give you a grasp of what it means and the basic process.
The Power of the Least interested person Requiam
Your Real Estate nightmare
This idea is so new and revolutionary you have probably never heard of it.
However, I bet you have experienced. If you have you have gone through one of those real estate experiences that you can barely touch and yet would like to strangle. The Simple POWER of the least interested person.
In relationships husband/wife, boyfriend/ girlfriend,parent/child, brother /sister: The person who is least interested in maintaining the relationship is the one who exercises the most power over the relationship.
Imagine a couple From Apple Valley, California. in the following: John,"would you like to see a movie at the Victorville Mall?, I would really like to go out." Mary, "Well, I don't know. Let's stay at home here in Apple Valley there isn't any movie I want to see." (do you sense the power the control?) John,"Well then let's go to the Red Lobster At Victorville Mall and then walk the mall." Mary"Oh we did that just a month ago,I am really not that interested, let's just stay home." (Can you feel the incredible power of inertia?)
Imagine the conversation going on and Mary the least interested one controlling and pulling the relationship and decisions around just by being less interested than John in any activity.
Has This ever Happened to you in Real Estate? Maybe you have met John and Mary as a couple and He wants to sell and she is...well there is no hurry..wait. ah.
We often think of power as action, getting things done, taking over, beware the power the force the fury of
THE LEAST INTERESTED PERSON.
If you are not a real estate professional that is you are a client a consumer. I hope you never run into the power of the least interested person in the form of a Realtor.
Credits to Tony Campolo and Wilard Walard of Walla Walla Washington from whom I have Adopted this Idea.
In a similar vein the person who loves the least exercises the most power. The least lover could be the most powerful... person.
Val Rensink Exit Desert Ocean REalty
People move for all sorts of reasons: job changes, family size, neighborhood changes, divorce, financial concerns or just for adventure! And even though they may have had some input into the process..children do not make the final decision! Consequently, for your children, Moving can be very Traumatic!
The most important step you can take, with children of all ages, is to tell them what is going to happen...as soon as possible. Involve your children in the process. Assign some tasks related to the move allow them to be invested in it. Help them to own it!
Younger children adjust more easily after all Mom and Dad are still the center of their universe! Any insecuritys or stresses can usually be salved by consistant reassurance. Teens on the other hand ....have a difficult time with moving. Mom and Dadare definitely NOT the center of their universe! Their friends are. They often feel their world has come to an end!
There are many publications about moving with kids. A popular one is Moving With Kids:25 Ways to Ease Your Family's Transition to a New Home by Lori Collins Burgan. Two web sites that may prove helpful are Kids Health and Movers Directory. Both have good information about moving with children.
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TIPS FOR YOUTH
Explain where you are moving to and why
Tell them what will be "fun" about it (accent the positives!)
If possible let them choose their own room
Make a visit to their new school before school starts
If you are able to arrange the move for Summer Vacation time...check with the local Parks and Recreation Department. They often offer special outings or social get-togethers for different age groups. A great way for your child to met their peers before school begins!
Assign them a task to help with the move: Have them be responsible for taking care of the pets and packing the pet items. Have them write on or put a star on the boxes holding their belongings so they can find them right away!
TIPS FOR TEENS
Explain where you are moving to and why
Have them research their new community, schools and popular attractions on the Internet.
Let them decorate their own room!
(even if you hate it...just try to guide!)
Have them keep a diary and digital record of the move,
the new house and their new room. Something they can send back to their friends at the old place.
Get them an autograph book
or animal to have all their friends sign
Have them (before you have moved) set up a visit,
at your new home,for a best friend to visit for a week or two...something to look forward to!
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Yes...moving can be stressful for the whole family.
But it can also be a time for family bonding! After all...the only people in town you know....are yourselves! Take advantage and plan daily outings with the whole family to get to know your surroundings, check out the restaurants, find the best shopping.
Share The Experience and remember Kids are People Too!
How do I get prepared? You get prepared by making sure your contract has reasonable contingencies included to protect you as a buyer. Some of these reasonable contingencies can be things like -- approval by a home inspector, obtain financing, and title clearance.
For those of us that see real estate as a long-term investment, make sure that you buy homeowner's insurance, and upgrade it as the value of your new home and its contents increase. Actually let me add, everyone should obtain homeowner's insurance regardless of it being long term or short term.
It is the old cub scout motto: Be prepared. It is good enough advice for us all.
So the Lesson for today is..... Follow Up & Give a little more than what is expected.
It is that time of year, Chimney Time. I own four Chimney's. So here is a little advice for those of us that own one too.
A Report by The U.S. Consumer Product Safety Commission, stated that some 23,600 residential fires in the United States were related to solid fuel appliances and equipment in 1996. An additional 5,500 fires were attributed to chimneys and chimney connectors serving heating systems burning liquid and other fuels. As a result of these fires, 130 people died, 230 people were injured, and total property losses were set at more than $184.4 million.
In addition there were a minimum of 119 deaths from carbon monoxide and at least 4,700 "injuries" reported for the same time frame, though most estimates range much higher.
The root cause of most of these losses is that most U.S. homeowners are unaware that chimneys are an integral part of a home heating system and that they require regular evaluation and maintenance. In a great many European countries - including Sweden, Norway, Denmark, Finland and Germany - chimney-fire damage statistics have been reduced to negligible numbers because national coalitions of government, insurance companies, fire and building officials, and chimney sweeps have developed tough regulations mandating regularly scheduled chimney inspections and cleaning.
The citizens of those countries understand the hazards of not maintaining their chimneys, and their chimney sweeps are regular members of their home safety team.
Most homeowners in the U.S. and Canada, however, seem to have little working knowledge of chimney and venting systems. This situation is complicated by the fact that faults, damage and problems rarely visible to the casual observer. In fact, people who will quickly replace a faulty automobile exhaust system because of the hazard it presents will allow their home's exhaust system the chimney or vent - to go unchecked and not maintained for years. The threat of chimney fires and unsafe indoor air quality conditions can be greatly reduced, perhaps even eliminated, if homeowners only understood that chimneys are active home operation systems which require regular maintenance.
Source: http://www.doityourself.com/stry/reasonchimneyservice
SHORT SALES ARTICLES
What is a short sale?
A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers' mortgage
obligations and closing costs, such as property taxes, transfer taxes, and the real estate practitioner's commission. The
seller is unwilling or unable to cover the difference.
Some - although by no means all - short sellers may also be in default on their mortgage loans and be headed for
foreclosure. However, home owners who bought at the top of the market or who took out large amounts of equity with
a refinance and who now need to sell because of divorce or job transfer may also find themselves upside down, owing
more than the home is currently worth when closing costs are factored in.
Tip: Losing your home can be very emotional and most people don't want to face up to the reality until foreclosure sets
You're so happy you got the listing - at least until the sellers inform you the price you're suggesting based on your careful CMA just isn't enough. Why? They owe more than that on their mortgage and home equity loans. Welcome to the world of short sales.
Flat or home prices, home-equity credit lines, 100-percent financing that sucked out equity, and spiking interest rates on adjustable mortgages are converging to create a regrettable, but expanding, niche for real estate practitioners: the short sale.
To help you gain a better understanding of short sales and what it takes to specialize in this growing area, we took a look at some of the most common questions on this topic that you and your customers likely will face today. Armed with this information, you can decide whether short sales are an avenue worth exploring for your business.
What is a short sale?
A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers' mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate practitioner's commission. The seller is unwilling or unable to cover the difference.
Some - although by no means all - short sellers may also be in default on their mortgage loans and be headed for foreclosure. However, home owners who bought at the top of the market or who took out large amounts of equity with a refinance and who now need to sell because of divorce or job transfer may also find themselves upside down, owing more than the home is currently worth when closing costs are factored in.
Tip: Losing your home can be very emotional and most people don't want to face up to the reality until foreclosure sets in. "You have to have to have a very soft sell approach, but still keep sellers focused on getting forms and paperwork complete," says Sheryl Thomson, associate broker, Exit Island and Beach Realty, Merritt Island, Fla.
Other sellers simply don't understand that if they have assets, such as stocks or a high-salaried job, a lender is not going to let them just walk away from a short sale without signing a note to repay what they owe, says Steve White, broker with Keller William s VIP Properties, Santa Clarita, Calif.
How do I know it's short?
A CMA will be your first indicator, but you also need to ask the seller what their outstanding debt is and calculate the cost associated with a sale - from transfer taxes to your commission. This will give you an estimate of the net proceeds that will be realized, often called the net sheet. This information can then be entered into a HUD-1 Settlement Statement to calculate out the final, negative result at closing. Some lenders also have their own forms.
Check with the title company and the lender to get exact figures on closing costs and loan balances and to find out what procedures they have in place. If they can afford it, sellers should also consider getting a home inspection to determine what repairs are needed on a home and how this might affe ct its value, says White.
Tip: Get the seller to send a brief letter to all mortgage holders, giving them permission to speak with you. Otherwise, privacy laws will prevent them from talking to you about the loans, says Larry Hollingsworth, associate with HomeCity Realty, Dallas/Frisco, Texas, and a short-sale course instructor. It's also critical to build a relationship with the seller's lender. Once you have credibility, the entire process becomes easier, he says.
Who do I and the seller need to talk to about the problem?
If there are a first and second mortgage or a home equity line of credit, you may have to talk to more than one lender to get approval for a short sale. In addition, you may also need approval from the entity that holds the pool of loans if the mortgage has been securitized.
"The presence of two lenders makes a short sale more complicated since it's often the lender holding the second, or junior, mortgage that has to absorb most of the loss," says White, who with Gina Covello, e-Pro®, broker associate at Keller Williams Realty, Studio City, Calif., teaches a course called "The Anatomy of the Short Sale."
Opinions differ, but most experts suggest that you let the lender involved know as soon as possible of the potential short sale. Others say you should wait until you have an offer because you'll get no action until then. "Without a viable purchase offer, your deal won't be considered by mortgagees," says Margot Cole-Murphy, broker with RE/MAX Equity Group, Portland, Ore.
Tip: Be sure you contact the bank's loss mitigation department, which will be the group to decide whether to accept a short sale, rather than the collection or customer service department, which is only interested in recouping past due loan payments. "Finding the decision maker is often one of the biggest initial challenges in a short sales," says Thomson.
What information will the bank need to decide whether to accept a short sale?
The sellers' submission package should include W-2 forms from employers (or a letter explaining the seller is unemployed), bank statements, two years of tax returns, and other financial documents outlining income and debt obligations. The bank will also need comps or a broker's price opinion showing your estimate of value.
In addition, the sellers should submit a "hardship letter," explaining the circumstances that make it impossible for them to pay the full amount o f the loan. The seller needs to be able to show true financial hardship. Someone with the assets or the income to pay is unlikely to be considered, say most interviewees.
Tip: In preparing the package, be careful about discrepancies between the seller's income and the income used to obtain the loan, cautions Lance Churchill, an attorney and instructor on short sales and REOs with FrontLine Seminars. A big gap may indicate mortgage fraud, unless employment circumstances have drastically changed.
What are the options besides a short sale?
Thanks to programs such as those proposed by Fannie Mae and Freddie Mac t o assist subprime borrowers, many lenders are more willing to offer loan modification options. This option can extend the term of the loan, add on delinquent payments to the loan principal, and/or reduce the interest rate to make the loan more manageable for the home owner.
Another option is a repayment plan that requires home owners to increase their monthly payments until the loan is current, says Loni Parmelly, a real estate practitioner and consultant who specializes in short sales. Parmelly also is author of Success in Short Sales (2004), a book she sells on her Web site. It may be possible to refinance an adjustable rate loan with a Federal Housing Authority or conventional fixed loan. Note that lenders will not postpone a foreclosure just because a property is listed, although they may postpone if you have a reasonable offer in the works.
Tip: The ideal candidate for a short sale is still making loan payments and has a credit rating worth preserving. Otherwise, it may not be worth going through the complicated process, says Steve Pierce, broker and operating principal of Keller Williams Benchmark Properties, Fremont, Calif.
How should I price a short sale property?
In general, most short sale experts say to price the property at or near fair ma rket value, although a few will begin with the total payoff amount owned by the seller. How frequently prices are dropped will depend in part on whether the property is in preforeclosure. Most banks have a formula for what percentage under market value they will accept, say interviewees. Figures cited vary from 8 percent under to almost 20 percent under.
"I always price the property 10 percent lower than comparable to peak buyer interest and initiate buyer activity," says Cole-Murphy, who's also founder and curriculum developer for Real Estate Pro Guides, a line of educational books for practitioners. However, it's important for buyers to understand that the bank will not give away the property, she says.
Tip: Most lenders will want to get a broker's price opinion or even an appraisal to see what the property is worth before you and seller set a list price. One way to help ensure that the bank's estimate of value is realistic is to offer comps of recent sales - both traditional and REO, says Churchill, who is also the author of The Foreclosure Specialist: A Real Estate Agent's Complete Guide on Working in the Foreclosure Market (Valco Press, 2007).
"Practitioners who do BPOs are rated in part on how close their estimates are to the final sale price, so they usually welcome information on legitimate comps," he says.
What and how should I disclose about the short-s ale property to prospective buyers?
Opinions vary on this topic, although most experts favor disclosing that a property is a short sale in the comments section of the MLS listing. Others suggest waiting to disclose the need for lender approval of the sale until a buyer is ready to make an offer. Debra Allen, ABR®, e-Pro®, with Prudential Arizona Properties, Gilbert, Ariz., uses a disclosure form prepared by her brokerage just for short sales. She also had a special sign rider for the yard sign made indicating a property is a short sale.
Tip: Watch out for unethical investors who will try to convice an owner facing foreclosure to sign a quit-claim deed for the property, and then lease the property, warns Jim Cacioppo, broker/owner of Grand Realty Group. Grayslake, Ill. In such cases, the former owners will st ill be liable for the mortgage payments, even though they no longer own the house.
How long does it take to complete a short sale?
Although response times vary from lender to lender, it can take two weeks or as long as 60 days to receive an approval of a short sale from a lender. That's why it's critical that buyers and their representative understand and accept that time frame before they make an offer.
An addendum to the California Association of REALTORS® purchase contract includes a provision allowing either party to cancel a short-sale contract within a set period if the seller hasn't gotten the deal approved, says White. Properties with securitized loans (which are the majority these days) may require a longer time to get an approval of a short sale because of the possible need for approval from the entity ho lding the pool of securities, says Churchill.
Tip: Keep in mind that the purchase contract on a short-sale property is a legally binding agreement once the earnest money has been deposited. Without language in the contract stating that the lenders must approve the offer and release all liens on the property, the seller may face a legal problem for failing to execute the contract if the short sale is not approved, says Hollingsworth.
What can the seller and I do to make a short sale more attractive to a lender?
Getting a lender to approve a short sale is primarily a question of economics. You have to provide hard numbers to show that the amount of money a bank will realize on the short sale is better than the amount it may recoup from foreclosing on the property and selling the property as an REO, says Todd Ruckle, ABR, RE/MAX Associates Inc., Newark, Del.
A 2002 study by Craig Focardi of the Tower Group estimated that the entire cost of a foreclosure was $58,759 and took 18 months. Other factors that can influence a bank's decision include the liability risk it assumes by owning the property after foreclosures, the money tied up during the holding period for a foreclosure and REO resale, additional costs associated with an REO such as attorneys' fees, and the additional reserves it will need if REOs rise in the bank's portfolio.
Tip: A buyer that is willing to close in 30 days and who can make a substantial down payment may make the deal more attractive than a buyer who wants 95 percent financing, notes Michael Termine, GRI, CRB, associate broker, Prudential Rand Realty, New York City. All buyers should be preappr oved for a mortgage before submitting the offer.
However, to avoid unnecessary costs, buyers should wait on having a home inspection and an appraisal for the loan until after the bank has accepted the short sale proposition, say Cole-Murphy. Genuine hardship, such as a lost job or high medical bills from an illness may also have an influence, says Covello.
What are the seller's options if a short sale is rejected by the lender?
There are a variety of reasons a bank will reject a short sale - from too low a price to too many files on the loss mitigator's desk. You can look for another buyer or even try resubmitting the same contract. "Banks don't want to take properties back in foreclosure, so they are going to do everything they can to make it work," says Pierce. You also need to prepare your seller in advance for the possibility of foreclosure if a short sale fails, says Parmelly.
Tip: A short sale might be rejected if the loan is less than a year old. In such cases, the servicer that's bought the loan can often require the original lender to buy it back, says Hollingsworth.
What financial or credit liabilities will a seller have as a result of a short sale?
Many lenders ask sellers to sign a promissory note for all or part of the difference between the proceeds of the short sale and the debt obligation as a condition to a short sale. In such cases, the note gives lenders the right to sue a seller and attach other assets if the note is not paid when due.
It's particularly important to understand this distinction if you work in stat es such as California that have a nonrecourse mortgage, says Churchill. In such states, the lender cannot pursue a deficiency judgment against a seller for any deficiencies after a property is foreclosed. Because of this distinction, sellers who are already in default on a mortgage and do not have the resources to pay off a separate promissory note after a short sale might be better off letting the lender foreclose, he says. If you are working in a state in which mortgage loans are nonrecourse, be sure and alert your seller-clients to this distinction.
Tip: Having a portion of a loan forgiven may have an adverse affect on the seller's credit. Encourage your client to try and sign a lease on an apartment before credit is further damaged, suggests Roberta Murphy, an associate broker with Windermere Exclusive Properties, San Diego.
What tax liabilities will a seller have as a result of a short sale?
One often overlooked aspect of short sales is that a seller must count any amount forgiven by the lender as income and pay taxes on that income, even if no actual money was received. The IRS requires lenders to submit a Form 1099 stating the forgiven amount. Sellers who meet the Internal Revenue Service definition of insolvency (either in bankruptcy or with debts exceeding assets) will not have to pay taxes on the forgiven amount.
Tip: The U.S. House of Representatives has introduced the Mortgage Cancellation Tax Relief Act (H.R. 1876), which would eliminate taxes on any debt forgiven on a principal residence through either short sale or foreclosure. The NATIONAL ASSOCIATION OF REALTORS® has been working to support this bill.
What compensation will I receive as the real estate salesperson or broker in a short sale?
Banks are going to want you to discount your commission. "It's the first place they'll look to save on closing costs," says Ruckle. Rates offered can vary, but are typically 1 percent to 2 percent below averages in the market, say interviewees. However, says Hollingsworth, more lenders now seem willing to pay a full commission on sales.
Tip: Instead of stating a specific percentage of compensation for buyers' representatives when posting the listing in the MLS, offer a split (50/50, 70/30, etc.), suggests White. In this way, if the lender pressures for a lower commission, you can divide the fee, rather than give a stated percentage to the buyer's representative. Many MLSs also require that you disclose a short sale in you r listing.
Where can I find clients if I'm interested in specializing in short sales?
Word of mouth remains the biggest source of new business, experts say, but you can also promote your services to individuals attending credit counseling classes (now required prior to filing bankruptcy), to people who receive state notices of loan defaults, and to home owners named on lists of ARMs that will be resetting in the next few months. To find buyer clients, creativity is a plus. For example, Thomson is developing a monthly "Short Sale Hot Sheet" she e-mails to investors.
Tip: FSBOs are another good source since many upside-down sellers think they can't afford to pay a commission and so try to sell on their own. Many don't realize that in a short sale, the lender pays the broker's commissions, says Churchill.
Are short sales for me?
With many more adjustable rate mortgages ready to reset to higher loan amounts in the next couple of years, short sales represent a growing sector of the market. However, because sales are time consuming, they aren't for everyone. "I always say that if you're going to succeed in short sales, you need the 3 Ps - patience, persistence, and problem solving," says Cacioppo.