Mother & Daughter Blog: October 2009

Just some quick reminders that there are few basic behaviors that us agents need to continue to do - no matter what the situation is.  In real estate... Haunting time is not just at Halloween if you get too loose with your procedures.

• Buyer Repair Bills - Remember Buyers are quick to agree to purchase AS IS - WHERE IS: But after purchase and the repair bills start to kick in, they forget the AS IS WHERE IS and start looking to blame someone for all the problems they are having with the property! So to protect your buyers and all others...

Recommend that the buyer request from the seller or they GET A HOME PROTECTION PLAN

* Old Republic Home Protection Plan is a good one.

• Buyers not getting a Home Inspection???   Remember buyers tend to forget that you "bugged" them about getting an inspection after the purchase.  So to protect your buyers and all others involved....

Recommend, recommend the buyer to get an inspection FIRST.. if they refuse (have them sign a waiver)

• Buyers would not get a Termite Inspection?? Remember buyers say it doesn't matter, but it will later on!

Recommend, recommend the buyer to get an inspection FIRST.. if they refuse (have them sign a waiver)

• Buyers not asking for more from the seller... ie. 1/2 escrow fees, transfer fees (escrow & closing fees): When its time to close, the buyer begain to feel they are paying too much to close???  That the seller should make more repairs - or all repairs even costmetics????

Recommend that they ask for what they want upfront in the initial offer submitted.  Do not try to ask for less in order to get the offer and then bumbard the seller with addendums to increase the concessions.  MIGHT NOT work - then you run the risk of loosing your deposit if you do not go through with the sale.

These are just a few of the "Haunting" situations that buyers find themselves in after they have submitted the offer, purchased the property and have no place to turn or no one to blame.... but they will!

For more information... Check out our Website and our Blog... - Website: http://www.motheranddaughterrealtyteam.com - Blog: http://activerain.com/brooksrm2042 - Check me out on Facebook

↑ Grab this Headline Animator

If you feel you may be in need of a short sale, you should do your homework on what you will need to have to provide to the agent.  ADVICE:  Choose an agent that knows how Short Sales work, have experience with short sales and is willing to do a short sale.  In addition it is always a good idea to show your identification to the agent to be sure they know that you have the right to sign to list and sell the property.

First thing to do:  Contact your lender and request a loan modification or other options.

Here are some items, questions that you will need to know the answers to:

• Name, Address of all borrowers on the property......
• Are you in current hardship......?
• Have you contacted your lender to ask for a loan modification or other options?  If yes, what did they tell you....?
• What do you owe on your mortgage.....?
• Are you in default....?  If yes, when did you go into default and do you have the paperwork?
• How Many Lenders or Lienholders do you have? 
• Who are the lenders?  1^st and 2^nd Lienholders?
• Are you serious about doing a short sale?
• The agent should tell you that you will the following:  Do you a problem getting any of the following

Current pay checks stubs (last 2 at least)

W2s for last year

Tax forms for last year

Hardship letter in your own words

Financial statement * you can use the one you used to request the loan modification

• Is this your primary resident?
• Do you have other properties that are/are not in trouble?
• When can you meet?

Your agent may have other questions but will be really relieved if you have these questions already answered for them.  It will save time.

For more information... Check out our Website and our Blog... - Website: http://www.motheranddaughterrealtyteam.com - Blog: http://activerain.com/brooksrm2042 - Check me out on Facebook

↑ Grab this Headline Animator

The majority of the bank/lenders have pre-determined criteria for submitting a short sale.  I am still not convenience that they all have pre-determined criteria for short sale approval.  Most are willing to entertain a short sale approval or at least will take the time to make it seem that the file is being reviewed ** some take months!

However, there is still a large number of foreclosures still going on and a great deal of those properties were short sale listed prior to foreclosure - had offers into the bank/lender and did not get an approval or in some case not even a sign of negotiation

Here is some of the information that I believe most banks/lenders have in common:

• Require the borrower to be in HARDSHIP LETTER and to submit it in writing (see Hardship Sample Letter:  
• Require a Financial Statement, Income Statement, W2s, Current paycheck stubs, some will ask for last year's income tax statement, retirement information, bank accounts (it varies what they will ask for).
• They all require a signed by borrower and buyer offer
• They will need a Short Sale package from the agent to include all the items that they tell the agent they need
• Short Sale - incurs a smaller financial less than foreclosure or non-payment of mortgage
• Short Sale is typically faster, less expensive than a foreclosure
• Most bank/lenders have a loss mitigation/foreclosure department
• Majority of the bank/lenders will not take the listing agent evaluation and will get their own (either an Appraisal or Broker Price Opinion (BPO)
• Times are changing and short sales can be approved even if the loan is not in default (but most will not entertain if there no obvious hardship) ** please note: Hardship must be true information
• Most are willing to entertain a short sale approval or at least will take the time to make it seem that the file is being reviewed ** some take months!  Agent must be aggressive about requesting that Trustee Sales date be postpond if it is approaching because bank/lender will not automatically do it - they will just let it go to the sale
• Bank approved short sale does not guarantee acceptance!  ** EVERYTHING must be in writing.  Without a written agreement .... you have nothing
• First Lien holder does not have the power to approve a junior lien  ** agent must negotiate with both lienholders (all lienholders)
• Regardless of the bank/lender if a short sale is approved and completed, it will remain on the borrower's credit for seven (7) years
• When bank/lenders approve short sale it allows the borrowers to feel good that they made a decision to be brave and request the short sale instead of just leaving the property.  In the long run.. it will be better for the borrower.
• There is no uniform Short Sale package -- it all depends on the individual bank/lender requirements

Still and all... no bank is the same and really no negotiator within the same bank/lender is the same!  Do not anticipate what a bank will or will not do --- be like Nike and JUST DO IT and see!

 

For more information... Check out our Website and our Blog... - Website: http://www.motheranddaughterrealtyteam.com - Blog: http://activerain.com/brooksrm2042 - Check me out on Facebook

↑ Grab this Headline Animator

 

This may be a good time to take a review of where short sales are now, with only 2 more months left in 2009.

The Short Sale is still the most economical solution to avoid a possible foreclosure.  This does not mean it is the easiest.  It does not mean that you will not endure some stress while going through this process and it surely does not mean you will not need to have a barrel of patience in order to complete this process.

The market is loaded with Short Sale listings.  Some listings are new, but most have been on the market for over 30-45 days and holding.  There are plenty of the short sale listings that are now in short sale contingent status.  Short Sale Contingent means that the agent has received and presented at least 1 offer to the bank/lender for short sale approval.  In most cases, when the status of the listing is Short Sale Contingent you can still submit offers to the agent.  It will depend on where the agent feels the negotiations are if that agent will submit your offer right away or if it will be presented later on -if the offers that the bank/lender have before them  not making them  happy enough to approve the sale.

So while there are deals out there, when making an offer for a Short Sale listing keep in mind that the bank is probably not going to approve an offer that is way below the market value of the property.  Some agents will list the property at least 10% below the low end of the market value, but that does not mean the bank/lender will accept an offer with that strategy.  You can bet the bank/lender will be looking more at the higher offers.

The bank will not rely on the listing agent's evaluation of the property.  They will hire their own appraiser or agent to do a Broker Price Opinion.  So if your offer is lower than either, the bank/lender may counter your offer or simply deny it.  Rarely will they approve it if it is far lower than the evaluations they have obtained.

I have received calls asking which bank I think is the hardest to get a short sale.  I cannot answer that question because it depends on not just bank - it's the negotiator and how much of a workload, concern, knowledge, care, or time they have to put in on the file.  GMAC does have tricks that they use (at least in my experience), they take forever to review the file, claim that they did not get documents that you know that you faxed or sent to them a couple of times, then they will not contact you personally until the time is almost up for the trustee sale and ask you for all these documents that will probably take you longer than what time is left.  But... hold on!  Bank of America, Wells Fargo, National City, etc will do the same!

So in summary... where are the short sales here at the end of October 2009? They are increasing and we will see more and more short sales coming on the market  -- the big question still WHEN WILL THE BANKS Stream-line their short sale process and treat these requests seriously?

 

For more information... Check out our Website and our Blog...

- Website: http://www.motheranddaughterrealtyteam.com

- Blog: http://activerain.com/brooksrm2042

- Check me out on Facebook

↑ Grab this Headline Animator

If you want me to Short Sale your property... please be accessible! Don't get lost where even I can't find you! 

Homeowners, we know that being up side down with your property is stressful.  We are sensitive to what you and your family is going through.  We are here to help.  But we need a little help from you. 

 We need you to be available to us when we try to get in touch with you - especially if you are still living in the home and we need to show the property or have questions from the lender in order to continue negotiating the short sale request.

Nothing worst than to have the lender call with a questions during negotiating and the agent cannot find the buyer! Nothing worst... unless you consider agent getting the short sale approved and in writing and then the agent cannot locate the homeowner in a timely manner!!!

Not good.

Communication is very important in the short sale process.  Don't let your agent down.  Be available.

 Need a short sale specialist? 

Rosemary Brooks

866-543-0461. 

Website:  motheranddaughterrealtyteam.com

Email:  rosemary2042@gmail.com

Ok we're told you about the buyers that may not be serious about buying! But what about the buyer that cannot make up their mind to put in an offer on a property that they like?  What about the buyer that seem to like to have you drive them around, look at properties and never can decide if they really like the property or if they should put in an offer.

I am all for a buyer being sure, but with the market as it is ... they really need to make up their minds quicker.  Once you see the property you really like... you'd better go on and put that offer in or the property will be gone to the next buyer that could make up their mind.

The process of buying is:

• Get qualified
• Make a list of area *location, features you are looking for and find yourself a good real estate agent
• Give the agent the specs for your new home
• Go out and view the property, take your list and if you like, slightly like or think it is the home for you -- put in an offer!  Do not wait for a long time and then tell the agent to put in an offer... because the property is probably in pending by then

** some agents urge their buyers to put in an offer as soon as they figure out they like the property so that they can have a chance at purchasing the property

This is one of the main steps of making an offer: Be real in your offered price.  Low balling is almost a think of the past.  Nowadays offers are coming in at least (at least)... 3% over the list price.  That is "at least".  Being competitive is the way to go.

Buyers you have to get a move on.... if you really want the property!

Our Website:  motheranddaughterrealtyteam.com

THIS IS A SAMPLE HARDSHIP LETTER: There are several hardships that homeowners are running into.  Probably no two homeowners have the very same hardship or events leading up to that hardship.  Hopefully this sample will fit your needs as a sample and a way to get started writing your hardship letter.  Although Short Sales are changed a little, this hardship letter is still very important to getting your short sale approved.

Agents: Your seller should be able to tell you why they are in a critical condition and why they need to short sell their home.  I always ask the homeowner first, to be sure they have a hardship.  It will make the short sale process run smoothier if this is the case.

*******************************************************************************

Lender Name Lender Address Lender's fax number

Today's Date

RE: Hardship Letter  -  Short Sale for _____________________ address

To whom it may concern:

I purchased my home at _____________ in ___________.  At that time I was employed by _______and business was very good.  My salary and the possibility of a promotion and raise made me sure that I could easily support my mortgage.  Unfortunately, a downturn in the market caused my company to reduce its workforce and I was laid off.

After searching for a comparable job, I finally got a temporary position as an office assistant as I continuing seeking other work.  I struggled for several months to make my mortgage payment, and was also hit with some medical payments that I did not expect (the COBRA payment was more than twice what I was paying when employed).  I knew I would have to sell my home to protect my credit rating and possibly have enough cash left over for moving expenses and some savings.  I put my home up for sale by owner in _________, but there were several problems that I did not have enough money to fix, such as the broken fence in the back yard and some pretty severe leaks in the roof which indicated a new one was needed.  Over the next three months I lowered the price three times but still had no takers.  I am now working with a real estate agent and I believe she will be able to help me sell quickly.

I really love my house, but I know that I cannot afford it.  I am a single parent, working as a temporary employee with few benefits and no savings.  My financial situation cannot sustain a home mortgage of nearly $2200 per month.  I want to sell the home, avoid foreclosure and salvage my credit.  I know that a foreclosure on my record will affect me for years to come.  I would ask that you please assist me in avoiding this.

Please accept this offer as payment in full.  My attorney has advised me to file bankruptcy, but I prefer to avoid further destruction of my credit.  I just want to move on and start over.

I deeply appreciate your help and understanding in this matter.  If you have any questions, or need anything further from me, please contact my agent or me personally.

Sincerely,  Home Owner Name   Address and Contact Information

 

Our Website:  motheranddaughterrealtyteam.com

 

That is right! Right in front of other agents, the seller and of course the other potential buyers -- right there at the open house!  Let me tell you the story and you tell me if you feel this is a good tactic or just bad ethics.

Seller agreed to hold open house for a couple of hours on given days.  She just asked that the potential buyers come with an agent, not alone - for her safety.  Property is located in a popular and highly competitive area.  So there was several agents there with their buyers. 

To the Seller's great surprise... while she was in the back showing an agent and her buyer the back of the house and other agents were either coming in the front door or walking around the property... this agent that did not come with her buyer... just sat down and finished up the offer and when the Seller came back into the room -- handed her the offer and asked "what do we have to do to purchase this property?"  This was a traditional sale.

Seller did not know what to say and told her that she should give that offer to her agent, gave her my information and then as soon as she could gave me a call.

This was the same agent that had called me and I had personally advised her that she would need to follow the instructions on the MLS for submitting her offer!  She did not listen to me.

What would you have done in this situation and how would you view this agent?

• Aggressive ... but that is what is needed in this business
• Too pushy and would not have accepted her offer?
• Disrespectful of other agents?
• Just doing her job?

Please let me know your opinion.

Rosemary Brooks, Short Sale/REO Specialist - The Mother and Daughter Realtly Team

 

Here is some of the buz talk that is still going on and probably will be around for a long while.  What do you think?  Illusion, Mirage, Common Sense or Just Talk?

Low Inventory due to moratoriums in order to get the Market back on track

Seasonal buying

Worst is over!

Reached the bottom

Looking up!

Buyers demand is most important

Option ARMS's flood is coming next year - they have not peaked yet.... Stay tuned.

ALT A's Adjustments are coming Soon!

Negative Amoritization Loans was a bust .. and are going to cause even more foreclosures next year!

Great Credit Scores are almost a thing of the past

Negative Equity situations are not yet over... not by a long shot

Hardships still count to get a short sale approved

Teaser rates... are just that - a tease

Falling home values are still coming

Follow the Pied piper - it won't hurt ya

Market is turning around

You can see the light... from the tunnel!

Is it smarter for many to remain a renter?

A great investment time... buy those properties and rent them out!

There is a new flood of defaults coming soon!!??

There is also a new flood of Short Sales out on the market now and lookout for more to rush in.... soon!

Location, location, location doesn't matter as much anymore

Add to the list. .... 

 

Rosemary Brooks, Short Sale / REO Specialist - the Mother and Daughter Realtly Team

 

In order to work with buyers, I believe that it is wise to decide right upfront that there is a strong possibility that you are not a mind reader and cannot figure out when a buyer is really serious about buyer now, later or never.  Sometimes it appears the person you are talking to, sharing information, driving around, numerous phone calls and emails is just wasting your time.  But you being in the business to make money don't want to assume this person is just gathering information and is not serious about buyer a home now or ever.

You do not want to waste your time or spend time on someone that you could have been spending time with another that was actually serious about buying.

So after you make sure this person is qualified to purchase a home and for how much... I suggest you not assume this person is not serious --> even if they seem to taking way too long to find a home that they are ready to put an offer on.  You must sharpen your patience skills.  Learn how to work with this person as well as do other tasks in order to get other clients - so it will not seem to be a waste of time.

Treat your leads, phone calls, and those that seem to be just site seerers" as read possinbilities. So get your car all gased up, put together the information this client has asked for, study your neighborhood data, put on your smile and get a going....!  You may turn out to be pleasantly surprised!

To the question of how do you know if a buyer is serious?  Answer is:  You don't. Not until the transaction closes.  And always keep in mind... your timeline is not what matters, its that potential buyer's timeline that you should be working with.