I was sharing my message with a real estate company on Wednesday and I mentioned that all indications are that banks will be leaning away from foreclosures and leaning toward ‘short sales’.
After class, one of the agents came up to me and told me about one of her listings. The seller was behind on the mortgage and knew they would be hearing from the bank at any time. The other day the dreaded letter was received. However, to the seller’s surprise, the letter talked about how to ‘short sale’ the house – NOT FORECLOSURE!
The letter started:
If you are experiencing affordability issues with your mortgage payments, you may be eligible for a workout program, known as a “Short Sale”.
What is a Short Sale?
A short sale is a workout program that allows a borrower to sell the property, even if the proceeds are less than the loan payoff, due to low property value. If approved, a Short Sale option can help you avoid further collection activity or foreclosure action.
The bank, one of the three giants, gave a detailed explanation of the process, a checklist of items they needed from the seller, a ‘Realtor Short Sale Guide’ with instructions on how the realtor should handle the transaction (including special phone numbers to call) and a timetable on exactly how long the approval process would take.
Some of the exact sentences from the three page letter:
A short sale is designed to help people avoid foreclosure.
A short sale can save some of the embarrassment and stress of a foreclosure action.
Upon final approval, a short sale can help homeowners avoid furtner collection activity or foreclosure action, which can result in adverse credit reporting and possible tax liabilities.
Realtors are generally allowed 5% to 6% commission.
Please do not delay, we are eager to assist you.
They claim that the entire process should take no longer than 37 days from notice of offer to full written approval.
This is absolute proof of the changing dynamic in ‘short sales’.
Make sure you make this category part of your 2010 plans!!
KCM Members: For the November special feature, I will be giving you the seller’s checklist, the Realtors Guide, the timetable broken down by item and other suggestions to enhance your ‘short sales’ package. It should be available by mid-month.
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Steve,
I can’t say enough about how I enjoy your talking points. Our office is up 20% in our market while our competition is down double digits. Advantage…Steve Harney and Shorewest Realtors1
Let’s turn that around. It’s Shorewest and maybe a little Steve Harney.
Thats great News ! I have not recieved a letter like that yet but glad they are starting to show us something . Dealing with the loan investors directly has been improving.Having better luck with a few BOA deals latly,but the servicers are killer,its just not in there best financial intrest to resolve in a shorter time period. I have been using a few new tools to get better results when dealing with them but ultimately I hope the “new” pending rules we are all waiting for will address a time frame for the loss mit people to respond within. . Remember the banks are looking for maximum recovery relative to the new market values.They will do more short sale deals as long as your deal makes good business sense. DONT UNDERSELL the property . I find more and more that professionals fall in the trap of thinking its a defaulted loan so it should sell way under market value,not true. There are adjustments to be made for the short sale transaction but remember its all about maximum recovery for the bank and if they feel they will get more in a foreclosure then your offer will get rejected. All the best Steve..
Steve the more I think about it and read your blog I see that it’s necessary to learn more about short sales not only to bring me new business but to help the people who really needs the help. Since your suggestions I’ve taken three webinars, awaiting the start of the online course scheduled for November and signed up for Phil’s class in Nov. – I’ve learned new things about the process and really looking forward to the new info I’ll receive in the next few weeks. Thanks for your help!
Natasha,
What you wrote was beautiful. It is more than just the money. Our neighbors need help and it is up to us to help them. If we concentrate on helping people, the money will take care of itself.
Thank you for being you!!!
Steve
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