The SMART Way to Buy Your First Short Sale

Buying a short sale in Madison Wisconsin is quite common right now. The impact of the financial recession has resulted in numerous foreclosures and has left some people with no option but to sell their home for less than the mortgage balance. Buying a Madison area Wisconsin short sale will require a bit of patience and a smart plan.

Understanding the Short Sale

Obviously, the best reason to buy a short sale is for the savings. Most of these properties are discounted as much as 20% off the market price. Buyers can save a considerable amount of money by negotiating the right deal with a motivated seller. However, a good price should only be one consideration. There are other things for the buyer to be aware of such as:

* In order to get a contract on a short sale, it is best to be the first person to contact the seller or selling agent. Being first puts you in more control of the transaction.

* Just because a property is being offered as a short sale does not make it a great deal. Some properties may need extensive work before they can be deemed a safe living environment.

* Banks typically frown on ridiculous low offers. A successful short sale will require you to offer a reasonable amount. This is where an agent can really come in handy.

* Based on the current number of short sales, banks are swamped with these requests. The process for moving the offer through the chain of command does not always progress in an orderly fashion. This requires the buyer to be flexible about a closing date.

All of this means that buying a short sale requires a solid plan; a plan that will get you in front of the right seller, with the right offer.

Putting Together a Good Plan

Follow this outline to help you develop a plan for buying your first short sale.

1. First and foremost, you need to meet with a real estate agent that has experience in short sale transactions. This will save you lots of time and trouble throughout the process. The agent can have a conversation with you to determine the type of house you need and look for possible short sale targets.

2. Determine a plan for responding when a short sale becomes available. Decide with your agent how the information will be communicated to you and how soon you can look over the home.

3. Set up a meeting with a local mortgage lender. Getting the financing secured ahead of time will help get your offer approved. A lender that is familiar with short sale transactions would also be beneficial since the closing may happen at any time and the lender will need to be prepared.

Understand that a short sale which seems like a good deal will likely draw attention from several buyers. The person that responds the quickest, with the best offer and the best plan in place, will likely win the bidding war.

Inexpensive Ways to Boost Your Home’s Value

Although mortgage rates are still at an all-time low, there are lots of homes on the market for potential buyers to choose. This makes competition tougher for sellers. If you are in the market to sell a property, it might be wise to take some time and spend a few dollars on simple things that will yield great results.

Choose the Right Agent

Sometimes the most important thing for a home seller is the most overlooked. Get a real estate agent that is good for you. There are numerous agents available, all with various personalities, strengths and weaknesses. Here are some tips for finding an agent that you are comfortable with and can help move your property.

* Visit a few open houses: This will give you a chance to see the agent interact with other interested buyers. You can gauge their professionalism, demeanor and overall knowledge of the market.

* Ask your friends and family members for a referral: This can be an easy way to find a Realtor®, but use a bit of caution. An agent that has lots of experience selling country homes with acreage may not be the best choice to sell your suburban 3 bedroom home. Make sure to check out their other sold listings and see how many are comparable to your place.

* Do an online search: Check out agents online. Look for their website and do a little research. Is their site professional looking? Is it updated with current listings? How well do they explain the homes they are trying to sell now? Are there lots of pictures? Once you have found someone you like, give them a call and do a brief interview over the phone.

Paint

One of the quickest and cheapest ways to alter a room's appearance is by simply adding a fresh coat of paint. Most any able bodied person can work a roller and a brush. Choose a color that is a bit neutral but also bright so that it will make the room livelier.

Clean up and Streamline

Obviously, you want the home as clean as possible. Take extra care to clean the bathrooms and kitchen. Also spend some time organizing and getting rid of clutter. Remove any excess wall hangings. This will make the room feel more open and larger. Making a home inviting and spacious will attract more buyers.

Improve the Curb Appeal

Like painting, this will likely involve more sweat than money. If you have shrubs make sure they are trimmed and neat. Give the lawn a fresh cut. Put a new welcome pad by the front door. Also, include some type of attractive plant near the front door. Since this area will likely be prominent in pictures that are trying to sell the home you want it to look inviting.

Bridging Outdoor Areas with Inside Areas

Use decorative plants around the patio and deck as well as inside the home. Use comfortable furniture outside that has soft cushions. This makes the home feel bigger with more usable space outside that can be used in a number of situations.

Changes in Popularity of Features in New Homes

The national economy runs through cycles similar to the fashion industry. Things that seem irresistible and trendy this year may be old news by the time next year rolls around. As a result of the economic down turn from the past few years most home builders are turning their attention to items that are practical instead of luxurious.

Sunrooms

As a whole, sunrooms are declining in popularity. According to Rose Quint, a representative of the National Association of Home Builders (NAHB) “Builders are focusing on features that add immediate value and make a home more practical.” For example, most builders are choosing to add linen closets and walk-in closets in place of a sunroom.

Separate Living Room

Most builders feel that a formal living room will not be very prevalent in new construction for the upcoming year. Families would prefer to have one giant open area that encompasses the living room, dining room and kitchen.

Media Room

Along with the living room, the media room will also likely disappear. The extra cost of the equipment, along with heating and cooling another room that is used sparingly, is just not appealing at this time. What is more likely to appear in new homes is a hidden away station that holds all of the DVD players, cable controls and charging stations for cell phones, tablets, and other media devices.

Two Story Family Room and Foyer

Since builders are approaching new homes with more practicality, it makes sense to cut down on unused space. While a family room may be bigger in new homes to include the dining and kitchen areas, it is unlikely to be two stories tall. The same goes for the elegant foyers that stretch toward the sky with large windows. Both of these features of a home may be lovely in appearance, but they each have a lot of space that is not used by a family of four or more.

Whirlpool Bathtubs

A large tub designed for relaxation and luxury is less likely to part of a new construction in the upcoming year. A separate tub laid out in a classic style is more useful and can be used to make a fashion statement while also having an everyday use.

Luxury Bathroom

Large bathrooms that include walk-in showers and multiple shower heads, as well as lots of floor space, will be harder to find in a new house. Instead, the shower will be smaller, with a single head, and the kitchen will likely include a double sink.

Outdoor Kitchen

The outdoor kitchen will probably disappear from lots of new homes. While it can be a nice place to gather with friends or family for a birthday party or to watch a football game, it also requires having an extra appliance or two. Most families would rather prepare the food inside and simply transport it to the patio and save on the cost of the additional appliances.

Buying a Foreclosure in Winchester, VA 

If you're thinking about buying a foreclosure in Winchester VA, there are certain things you should know.  Foreclosures can be great buys, and many of them are listed at bargain prices.  But, and there is always a but, foreclosure purchases do have characteristics that aren't always like fair market sales.

• A foreclosure becomes known as an REO (real estate owned) once the homeowner has lost it and the lender has taken control of it. Most consumers don't know the difference, so "foreclosure" is often used to avoid confusion.
• A foreclosure is typically sold "as-is".  That may mean that some repairs will NOT be made.  Lenders will usually take care of any problems that could be considered a hazard.  For instance, an electrical meter has been tampered with and someone could stick his hand inside of it and get electrocuted.  Water, air, mold, heating and structural issues also come to mind when considering repairs that are hazardous.  They may end up being negotiated.
  
• Lenders really don't care who you are.  They will not discriminate against you for any reason.  They view you from data on a piece of paper as a potential buyer who they will never see, hear from or get to know.  All they want to know is, "Can you buy the property?"  If they seem like they are being hard to get along with, it's not personal.  When a bank's asset manager has 200 files sitting on his desk, he doesn't have time to discriminate. 
• Banks who are trying to liquidate their REOs are not like a seller who has to sell.  You can't demand things from them.  Expecting the same level of response time, offerings of closing costs or just about anything else is more than likely going to frustrate you.  If you start demanding things during the negotiations, they will just say, "Next." 
• Threatening a bank with legal action because they are not responding to your demands will not win their favor, approval or respect.  Again, their response will be, "Next."
• When you buy a foreclosure, you normally buy caveat emptor.  Buyer beware.  That doesn't mean that all foreclosures are dumps in terrible condition.  It can be quite the opposite.  A bank in California may not have a clue what a house in Winchester, VA looks like.  So, they can't afford to make any disclosures or promises about a property they will never see.  You buy at your own risk.
• Some banks will work with you on closing costs and some will not.
• Banks may charge you a daily per diem if for some reason you cannot close on time.  I've seen it go up to $150 a day.  It's best to have all of your paperwork ready, as well as your loan approval done on time.  Make sure you're ready to get busy once the bank agrees to your offer to purchase.  You should already be pre-qualified for a loan before you start.  It's better to be pre-approved. 
• The less complicated your contract is, the better chance you have of getting the property.  Adding a bunch of contingencies or conditions only makes the next contract more attractive, and banks will gladly accept a pile of contracts before they make a decision.  Keep it simple.  Some things are unavoidable like a final loan approval, but you can skip some contingencies.  Talk to your Cornerstone agent. 

Don't give up on foreclosures because they're more work.  A foreclosure might be the buy of a lifetime.  It takes patience and understanding, and when you're ready to buy a Winchester VA foreclosure, give your Cornerstone agent a call.

Buying a foreclosure in Winchester, VA

What to look for when buying a foreclosure in Winchester, VA

If you are the Personal Representative for an estate that has property to sell it will be your responsibility to pick a real estate agent to list the home for sale. If you do not know any agents who are familiar with Probate sales, you have another excellent option, a Foreclosure specialist.

Foreclosure specialists, also known as REO agents, have the skills needed to be a successful Probate Agent. 

Here are the similarities:

1. Pricing your home: REO agents have done hundreds to thousands of BPO's. These are broker price opinions which are used by the bank to help determine market value of a property. No one knows the market value of a home better than an REO agent. They can advise you on the price you can reasonably expect to get for your home, and the listing price that will be most effective to get that price.

2. Cleaning out your home: REO agents have "trashed out" hundreds of home and know the best haulers to accomplish this at the best prices. Even more important REO agents are trained to know the difference between trash and valuable personal property, so you will not have to worry about valuable items that were hidden away getting trashed instead of returned to the estate for sale or distribution. Every probate home I have ever helped sell has been full of both trash and personal items. You can hire firms to sell the valuables, but the trash out has to be paid for separately in most cases. Very often valuables are hidden in furniture or other items that were called worthless by the appraisers and auction houses. These valuable will not escape a good REO agent.

3. Need carpet, paint, or some other cosmetic repairs? Again, REO agents have done this hundreds of times and know the best contractors to do things properly and at the best prices. They also know the difference between what has to be done for health and safety and what items should not be fixed because it will only add liability to the estate.

4. A Probate agent needs to follow directions from the Probate attorney and not just take the lead. REO agents are team players and are used to taking direction from the banks that hire them. If there is a rule they follow it, whether they agree or disagree with that rule. You do not want any rogue agents dealing with your probate sale and making up their own rules.

5. Picking the best offer for the estate, not for personal reasons is essential in a Probate sale. An REO agent is experienced in knowing what kind of offer is best for the estate. They are not swayed by compelling stories like this is someone's dream home, or my grandmother knew your grandmother. They can guide you towards choosing the offer that will be the best one for the estate. The Personal Representative's job is to do the best job for the estate, and not let his or her own emotions make decisions.

6. Do you represent an estate with a valuable house but no cash? Does the house need some cosmetic upgrades in order to get a better price? Is it full of trash that needs to be disposed of? Are the carpets stained and smelly? Is it full of furniture that has no resale value, but no money to do any of these things. Very often you can get an REO agent to front the money to get the house ready, and then repay them at close. The banks did this for foreclosures so it is not a foreign concept for an REO agent.

In the past, REO agents were so busy with selling homes for banks that they had little time for working other kinds of transactions. However, foreclosures have plummeted, and now there are plenty of real estate agents with exactly the kind of skills you need to sell your home in Probate. 

If you are looking for an REO agent the best place to go is http://reopro.ning.com/ Here you can find REO agents from all over the country.

If you have any questions about finding an agent for your Probate sale please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

The market is always changing and as such, I have learned that I too need to always be changing or at least growing. With that being said, for the past 3-4 months, I have been doing a lot of reading on self directed IRAs. More specifically, the "Private Bank Concept" within the self directed IRA industry. Honestly, this concept amazes me, in fact, I am struggling to understand why more of us in the REO industry aren't cornering this market.

I guess first off, I had to realize that many people don't even know they have the ability to direct their own IRA. I had read somewhere that 3.4 trillion dollars is setting in IRA funds right now across this country and most people (like 99%) aren't making more than 1-2% annually.....if that. Granted, most of these people have their money with some investment firm who has the money diversified in stocks, bonds or mutual funds and they make money by managing those funds for you so, it's not in their interest to tell you, "hey, did you know you can do this better on your own and save the money you are paying us?" so, most of you don't know anything about self directed IRAs. Don't feel bad, as of 3-4 months ago, I didn't either. I don't even remember how or who told me about them so, I can't even source or thank anyone for directing me to this awesome opportunity.....sad but, true.

At this point, it's important to tell you, I am a Realtor, not an Investment Adviser, not a Certified Public Accountant and most definitely not an Attorney (no offense). I am simply a Realtor who is looking to drum myself up more business, make more money and start my own brokerage by the start of 2013. Like any good small business owner, I need to find capital however, I don't want to be tied to the SBA (Government Secured Loans) or tied to a bank, personally, I would like to work with individual investors however, it's tricky. Yeah, I have a proven track record and yeah, I have a great business plan...as told to me by my SCORE counselor but, it's not easy to convince someone to give me their money to grow my business and in return, I will give them their money back plus interest. Let's face it, money is tight these days for us all however, what if I was able to tap into money you aren't using to pay your day to day bills? Ok...so, who isn't living paycheck to paycheck, I get that but, some of us worked hard enough that we have nearly 3.4 trillion dollars that isn't doing much for us and my thinking was, how could I convince people to give me some of that money. My thinking was, what if I told potential investor, Priscilla Penny Pincher that I was able to find a real estate investment (flip) that would net her a 10% return on her retirement money, why would she say no? Ok....yes, I am sure you can think of many reasons to say no but, really.....10% return in 6 months on money that is making 1% return in 12 months, it's a no brainer, right?

Well, that is where the Private Bank Concept with self directed IRA funds comes into play. It's nothing more than a strategy that real estate investors are using to complete more deals than ever before. Basically, it allows me to borrow money from an individual...not a bank, to do my flips with while paying the individual back the money borrowed plus a interest rate triple, quadruple or even quince the rate they are currently getting on the money.

Yes, it's risky, it's real estate and yes, we can't guarantee anything but, we can reduce risk by implementing strong, robust loss mitigation and exit strategies so, risk is minimized. Let's also not forget, the loan you are providing me is secured by real estate....real property so, it's not like you're going into this with no collateral.

So, here I am, learnded (yes, that is my Honey Boo Boo term for the day) about this Private Bank Concept and all I need now are the funds however, I am curious, are any of my REOPro member doing this already? If so, let me know, let's talk, let's exchange resources, let's work on creating our own Private Bank!

The Liability of a Preferred Short Sale Agent.

I had a conversation with a friend and colleague today that I want to share with you. As always, all of my conversations are confidential so, the names and vital details will be changed in order to protect the identity of everyone involved....except myself, of course.

So, she calls me up to tell me that she has been speaking with executives from the top banks, GSE's and largest default real estate portfolios holders in the country and as a result of those conversations, she had some questions for me. Flattered of course, I obliged and let her know I would answer any questions she had to the best of my knowledge and experience.

She starts by telling me what she was doing and why she was talking with these executives and as I am following along, I begin to understand why she is calling and realize, flattery is far from her mind and she needs real answers. She begins telling me that out of these conversations she was having, she has gotten the impression that many banks, GSE's and holders of default real estate portfolios are not only have trepidations about developing a "preferred short sale agent" list, much like how they have a "preferred or REO agent" list....they have outright hostility to the idea.

In order to further my understanding and get a better sense of the fear they have, I asked some probing questions and fortunately, I got some good answers...of which, I want to share with you. In no specific order, here is what I go....

Question 1: Why wouldn't the bank want a preferred short sale agent they can recommend to their default occupants / homeowners?

Answer 1: Liability.....too much liability.

Well, as you can imagine this answer wasn't good enough for me so, I had to break it down a little. Now, our conversation was nearly 2 hours long and I didn't record it so, I am going to summarize here for you.

The banks issues of liability revolves around some key problems that they can't seem to correct, fix or better yet, feel that they want to even be involved in fixing, those are...

1. Lack of Quality Agent Training:

From what I took away, I was impressed that many banks (let's use the word "bank" to refer to all of them....banks, GSE's and Default Real estate Holders, alike) know our industry has developed good education however, they have a few problems and they are...

                A. OUTDATED: Current education always seems to be outdated or not updated timely enough to positively impact the quality of the actual work completed by the agents.

                B. NO RETENTION: Even though the education may be good on paper, the retention of the agent is poor and by the time they need to use what they learned...they lost it.

                C. NO QUALITY ASSURANCE: You may have an agent who took the course, passed the exam but, has such poor operating processes and procedures that they fail to implement the best practices they were taught.

2. Severe Inexperience:

Now, for many of us who do short sales regularly, this was a bit of a surprise but, after I really thought about I came to accept that sure, a lot of agents out there just don't know how to do a short sale. What got me thinking was how this breaks down from a banks point of view.

                A. INCREASED PROCESSINGTIME: Due to lack of experience errors like, documents that aren't fully executed or not doing a preliminary title report, it ends up creating increased processing times, waiting for corrections.

                B. UNECESSARY ESCALATIONS: Because the agent hasn't completed enough short sales, they haven't worked through the common practices, procedures and processes of the bank or the short sale in general and end up getting frustrated and escalating which creates a back log for the bank.

                C. LACK OF PROMPT AND OR ACCURATE COMMUNICATION: Agents who don't understand the jargon or worse, set unrealistic expectations due to simply not communicating or not knowing how to effectively communicate cause delays and end up resulting in lost deals.

3. Fraud - Nepotism:

Sometimes it's not what you know or how well you work but, who you know and what they can do for you. Sad but, its true and yes, the banks see this as a problem they want to conquer however, not as easy as you may think.

                A. SAME DAY / SHORT SALE FLIPS: Regardless of how you come down on the same day short sale flip, the reality is the bank know this is happening and consider this a fraudulent act. I am not going to get into the details just why this is fraud however, its a problem for the banks and they are afraid that having a preferred agent list, they may open themselves up to this happening more often.

                B. UNQUALIFIED AGENTS: Have you ever wondered how that agent got that REO when you now beyond a shadow of a doubt they never worked a REO in their life? Well, it's likely because they made a great connection through a friend or at a conference and BAM, fast tracked to becoming a REO agent. This wouldn't be allowed but, not exactly sure how to stop it or prevent it seems to be the issue.

4. Severe Incompetence:

You can be the most trained and you can even be experienced but, we have all met those agents who just simply don't get it, completely, utterly incompetent and we are left scratching our heads and asking ourselves, "Who did they pay off?"

                A. BEST INTERSEST OF THE CLIENT: The banks have found that many agents just don't know what is truly in the best interest of the client or better yet, they don't know the law requirement or risk management strategy that will protect their client from any future liability.

All in all, my conversation was a good one however, it seemed to me to be a little late because for those of us who have been doing short sales for at least 4-5 years now, we have had these issues ourselves dealing with other Realtors or the banks themselves.

I don't really know what has spurred the action by many of these banks to finally look a little closer however, I am all for it. The reality is, this business is all about change and the moment you can't or don't change, you die. Truth is, I thrive in the changing environment because I have built my business around conservative fundamentals that have kept me nimble and flexible while others have retired early or simply gone bankrupt. Granted, I do believe competition is good and in a free market necessary but, I also believe a free market competitive environment gets rid of the wasteful, lazy, and propels the hungry and innovative to the top.....so, let's bring it.

Not sure what the result of my conversation will be but, I have a feeling you may end up seeing a survey from me shortly and if that is the case...please respond, let's us know your thoughts because, we may be able to effect some change.

Unemployment Rises and Hopes of a Wide Spread Housing Recovery Begin Falling.

Many of you have been hearing that in some areas of the country, home prices are rising and sales are starting to recover however, it has been my argument that with an unemployment rate above 8%, this recovery is a false recovery brought on by REOs being held off the market for political gain.

A 8.3% unemployment puts us back in the unemployment numbers of February of 2009, per the Bureau or Labor Statistics (see graph below) and if my memory serves me correctly, REO Listings Agents were slamming and jamming. That is, it wasn't uncommon for mega REO agents to be closing a REO a day. Yet, here we are with the same, if not worse unemployment number and REO has dried up much like the unprecedented drought in the Mid-West.

Granted, a 8% (+) unemployment rate isn't good however, it's not the "real" unemployment rate. Keep in mind, that number is only reflective of the people claiming unemployment for the first time and those getting a government paycheck from unemployment insurance. The reality is, many more people have fallen off the unemployment radar because they have exhausted their benefits and are no longer counted however, they do count. The Government does release this "real" unemployment number and it's called the U-6 which as described provides a more complete tally of how many people are really out of work. As of today, this number is 14.9%, according to the Bureau of Labor Statistics.

At a 14.9% U-6 number (Real Unemployment Rate), I have one question....... Where are all the REOs?

It's no secret, the Federal Government is doing all it can to keep people in their homes and as noble a cause that is, it doesn't change the fact, you can't pay a mortgage without income. Many of us in this industry have known for years, the banks, Fannie Mae, HUD, etc.... are holding massive amounts of REO inventory off the market. I understand why, if it was dumped on the market, we would collapse the US economy in a way never before seen but, to not release the inventory in hopes of artificially inflating the market you do more damage in the long run.

So, what damage is done by holding on to these REOs and not letting them hit the market?

Well, I am no economist and I don't play one on television however, I have a working man's knowledge of my industry and can tell you what I have observed. I will focus on one major negative that I see because I don't want this blog to become a book.

1. Paradigm Shift: Back in 2006 / 2007, when you weren't able to make your house payment, you knew that in about 3 months or so, you were going to be evicted and your house was going to be sold at auction. This is no longer the case. The last relocation assistance package I negotiated the man had been living in the home for 52 months without making a payment. This seems to be happening more and more. That is, I am seeing more people living in the home for 15+ months or longer before I am even called out to offer relocation assistance. This increase time that people have to free load causes an incredible shift in how people view foreclosure....or better yet, just paying their mortgage. It causes people to become entitled, lazy and even belligerent or combative about the relocation assistance or ultimately the eviction. They start feeling, thinking and fighting for their "right" to keep their home. They start acting and believing they are owed the home even though they can't pay the debt.

With all of this, where do we go as a country? Who do we look to? As America has done and I believe as we will do, we will look inward. We will realize our mistakes and we will recover, just when that happens, I don't know.

We are happy to announce that last week we had another successful Wisconsin short sale closing, this time in Marshall. As you have likely heard, short sale transactions can be complex, and an experienced Short Sale Realtor® is a must.

This was a great home that the new owner is sure to enjoy! If you are thinking of selling or buying a short sale home in Wisconsin, our short sale specialists would be happy to assist you. Give Rock Realty a call at 877-774-7625.

Or, if you are considering a short sale for your home, feel free to fill out our no obligation

Short Sale Home Evaluation Form

How to Buy a Home Once You Have Completed a Short Sale

Tragedy strikes across the country every year.  People lose jobs, injuries are sustained from accidents and financial hardships cause tough decisions.  Fortunately, most things improve with the passage of time.  Read on to see how you can prepare for your next home purchase once you have sold a home via short sale.

Option 1: Big Down Payment

One constant that has remained in mortgage lending in many years is the power of a large down payment.  Although it is uncommon to see someone with a 30% or more down payment, it does happen.  Especially for people who are recipients of a windfall, such as payment on a judgment or an inheritance.  If you can rationalize the high interest rates, and you have the funds for the large down payment, then you can usually find a private lender to set up a mortgage for you.

If you choose this route, be alert to a few items.  First, the lender may have a stiff penalty for paying off the loan within the first few years.  Secondly, the lender may attempt to set up the mortgage with a balloon payment.  Avoid these two snags at all cost.

Option 2:  Wait a Few Years

If you don’t have the money for a 30% down payment you can simply wait for three years.  The Federal Housing Administration (FHA) will ask that a person who sold their home via short sale to wait for three years before applying for a new mortgage.  However, if your circumstances show that the short sale was beyond your control, and you kept your payments up to date right up to the sale date, then you may be able to get the loan sooner.

People who would prefer to use conventional loans offered by Fannie Mae or Freddie Mac will have a similar wait.  Fannie Mae only asks that borrowers wait for two years if they are able to pay a 20% down payment.  For circumstances beyond your control Fannie may allow you a 10% down payment after a two year period.

Veterans who wish to use the VA loan will need to wait a full two years after their short sale to apply for a new loan.

Option 3: Lease with Option to Buy

It is not surprising that many home sellers have chosen to offer their homes with a lease and an option to purchase at a certain time and at a designated price.  Due to the economic slump over the past few years, home prices have dropped.  Sellers do not wish to sell their home at such a loss so many are willing to lease out the home in hopes that the market will rebound.  For buyers who are not quite ready to qualify for a traditional mortgage, buying with a lease-option could be the easiest way to get in to a home.

With a little planning and a little patience it is possible to find yourself holding the keys to your next home after you have made it through a short sale.

Original Post - Buying a Home after a Short Sale

Your company's online presence and reputation is a critical component of bringing in new leads and business. One of the most effective ways to communicate that your company is both competent and reputable is to post online client testimonials.

Up to this point, we had been sending customers a direct email asking them to reply with their personal testimonial. The response rate was less than ideal. Today I created an online form that hopefully will make a positive difference. It's a short form that was easy to create using Wufoo.com. Setting up a free account will allow you to:

• Create 3 unique forms
• Max of 10 Fields per form
• A limit of 100 client form submissions per month

Here recently, my business has been going well enough that I am now at the point that I need to start looking at expanding the task I complete to another agent.....a co-list agent. In thinking about this, I did have a agent in mind however, I am not exactly sure he is a good fit for what it takes to do the things I do. That got me to wondering, what exactly do I do? Yes, that may seem like a silly question but, it got me to wondering even further about what exactly it takes to be a REO Listing Agent and thus, this blog.

So, before we get to talking about the day to day task, let's talk about some larger concepts that need to be realized by any REO Listing Agent.

First off, let's talk about commitment. Yeah, yeah, you know what commitment means but, how many of you actually put it in to practice daily. I suspect that many of us have so many commitments that sometimes we feel overwhelmed and can't actually get to all of our commitments in a day. In these cases where we put our commitments off till tomorrow because today was so busy, I have to stop and ask you, is what you put off till tomorrow really a commitment? To me, it sounds more like a obligation but, nothing like a commitment. The way I distinguish a commitment from an obligation is by using a time line. More specifically, if my Asset Manager gives me a task and says they need it completed in 48 hours or less, I am committed in that I no longer have the option to complete the task in 48 hours and 1 second later. This is different to me from an obligation because in my mind, an obligation doesn't have a timeline...a deadline. I am obligated to do something but, I can do it in my time....hence, my difference between a commitment and a obligation. In other words, are you committed to doing the task at hand in the time provided, regardless of other obligations you may have? If you are not because of priorities, ie.....I can't complete the assigned task because I have to pick up my child from school, then I would tell you that you may want to reconsider being a REO Listing Agent. At least my Asset Managers are looking for commitment from me and that means when they tell me at 3pm on Friday that they need a monthly marketing report completed no later than 4pm the same day.....it gets done because I am committed.

Secondly, let's have a discussion about priorities. Once again, I know you know what a priority is however, do you prioritize daily? Of course you do, we all do however, the better question is, are you prioritizing your commitments correctly. You see, many of us don't and it's not because we don't know how, it's because in many ways we have too many obligations. For example, I have a priority in my life to spend more time with my family however, that priority doesn't out weight my priority to my clients. Yeah, you heard me correctly, I said it, my family isn't a greater priority than my clients. Pick your jaw up off the floor and breathe. If you are going to be a REO Listing Agent, you need to know that your clients needs and priorities are more important than yours. As such, your clients priorities will always trump yours. For many of you, this is a problem because when I said that my client takes priority over my family, I am sure a lot of you bristled at the idea and some of you may have even said, HELL NO! It's for this very reason that you will not make a great REO Agent. Why? Because people like me will be ready to pick up your slack, show your Asset Manager that we are committed and that they are a great priority in our daily lives. Now, put yourself in your Asset Managers shoes, who would you want to work with? That's what I thought.

Thirdly, let's talk about balance. Believe it or not, you can be fully committed and, have proper priorities and still keep your life in balance. It's not easy....let's be real, it's almost impossible but, it can be achieved. You can give your client all they need....and more, as well as complete the task of other commitments, obligations , and or priorities. What does it take on your part? An incredible amount of attention to details, planning ahead, open dialogue with others, understanding your own limitations and most importantly, knowing when to ask for help. For me, balance is achieved by having the right people around me who share in the heavy burden that being a REO Listing Agent is. Team work is the only way a single person can achieve being a REO Listing Agent who close multiple millions of dollars in deals a year. Now, not all of us have the inventory on hand that would require us to have a team but, if you aren't there yet in your business, trust me, when it comes, this may be the most important thing you take away from this blog and that is Team Work.

Finally, I could go on with this blog and talk about trust, task, following instructions, etc...etc...etc... however, I have a sneaking suspension that for many of you, you never got past the second point I made....lol

With 50 + listings in 2011 year's end and 50 + sales in 2011. I have received the following award.

I am now a 50/50 member with Coldwell Banker and have won the International President's Elite award for 2011.

COLDWELL BANKER REAL ESTATE LLC 1 CAMPUS DRIVE PARSIPPANY, NJ 07054-0642

February 2, 2012

Congratulations! You achieved impressive results in 2011 that entitle you to the use of the President’s Elite designation within the Coldwell Banker brand during 2012. As a member of this distinguished group, you are among the top three percent for President's Elite, for all Coldwell Banker sales associates, depending on the designation you earned. Wow!

So you have to sell. Here is what you should do.

FIND A REALTOR

1.  You can not do this on your own. The banks will want the home to be extensively marketed and you can not do that as a FSBO. Since the lender will pay the real estate commissions that should not be a concern.

2.  Gather your financial information. You will need 2 years tax returns, 2 months bank statements form all accounts, 2 months statements from all investment accounts, profit and loss for 2 years from any self employment.

3. Fill out a financial statement which shows all your income and expenses

4. Write a hardship letter which explains why you need to do a short sale

5. Make your home available for showings and open houses

6. Keep your financials updated every month and give the bank everything they ask for

7. Accept the best offer you can get on the property

8. Be PATIENT

If you have any questions about short sales in San Mateo or Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

I have been doing short sales for about 3 years, I have seen a lot but I am still learning. I known that banks sometimes might denied a short sale in the following cases:

• 80/20 they can agree on how much each one is getting, sometimes the 2nd mortgage wants more than what the first mortgage is willing to approve.
• Contract price is too low or property is so ugly and has to many issues that no one is interested to pay what the bank has approved.
• Too many liens on the property and bank wants seller to pay for all or some of them and seller doesn't have the money to do it.
• Strategic short sale, the homeowner is comfortable making payments but because they are upside down they want to sell, but there is no real hardship.

This is the new one. Homeowner bough property with FHA loan back in 2007, got married and move out of the house and rented the property from 2008 to 2009. Husband loss his job and they moved back to the house in 2010. She was denied a loan modification, Wells Fargo send her a letter advising her to short sale the house. Then when I sent the concent for the bank to release information to me, they told me that FHA rejected the short sale because she used the house as a rental for a period of time and that she can't even do a deed in leiu.

We learn something new everyday.

The question of whether to short sell a home in probate used to be rare, but now unfortunately it is not. There are estates where the owner dies, owes more than the house is worth, and a decision needs to be made by the Personal Representative (executor) as to what to do.

My opinion, try it. If it is in the best interest of the bank/investor to short sell rather than foreclose they will do it. If it is not, they won't and will take it to foreclosure.

So who benefits if the home is sold as a short sale?  Well the realtor for sure.  The commission is paid by the bank.

However, if the attorney's fees are put on the HUD1 statement (the statement saying who is paying for what and who is receiving what money) the bank may pay them.  Also, the payment to the personal representative can go on the HUD1. This would make it worthwhile for the Personal Representative to try and do the short sale.  This can be very handy if the representative is a Bank or Professional Fiduciary.

The heirs do not get anything out of a short sale so it does not matter to them if the property is foreclosed or sold short, but it does matter to the neighborhood.  A vacant foreclosed home brings the other homes around it down, while a short sale is cared for by the realtor and even if vacant is not abandoned.

So should you bother?

I think so.

If you have any questions about probate or short sales, please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

Below Is part of an email I received this week I am wondering if anyone here on REO PRO has had a track record with this program with other outsourcers that may have tried this before. If you have ran into this already how easy was the conversion any problems to look out for?

One or more of the properties assigned to you has/have been selected for Fannie Mae's Utility Management Pilot. As part of the pilot, Fannie Mae has authorized a third party vendor to take over the management and payment of electric utilities on selected properties. 

Please read the linked FAQs and make a note of the properties listed below which have been selected for the pilot. A utility management company will contact your AMP within a week to request utility documentation. We ask that you work with your AMP to ensure they have the most up to date utility bill. Please Note: If you also work with Fannie Mae directly, it is important that you submit 571 reimbursements on AMP properties to your AMP rather than to Fannie Mae. 

Pilot Details

This pilot only affects the electric bills on the list of properties shown below unless the property has joint utility billing. If the property receives one bill for multiple utilities, then those properties will also be included in the Utility Management Pilot. All other bills and properties remain unchanged and you are required to continue to pay them as outlined in the Fannie Mae REO Sales Guide. If you have any assigned properties that are not selected for this pilot, it is your responsibility to continue to pay the electric bills of those properties. In addition, there are no changes to how you submit for reimbursement. Continue to submit to your AMP for reimbursement for all bills which you have paid.

The electric bills for the properties below will be transferred to a third party vendor and will no longer be sent to you. In order to facilitate a smooth transfer, you must activate service. If you do not activate service, the transfer cannot take place. Once the transfer takes place, a representative from the third party vendor will notify you and your AMP of the exact date service is transferred.

Important

If you have not recently submitted an electric bill to your AMP for reimbursement, one of our third party vendors may contact you for a current copy of the bill. The third party vendor will provide you with a Letter of Authorization from Fannie Mae allowing them to procure utilities on our behalf. We ask that you cooperate and promptly provide the assigned vendor with a copy of the most recent electric bill for the property requested. 

Please be mindful of the following points during the utility transfer to the third party vendor (utility management company).

• Do not turn off the electricity on the selected properties. If electricity is activated, we are simply moving the billing to the utility management company. 
• If any of the properties selected are occupied by a tenant, immediately notify your AMP so the property can be removed from the pilot.
• The Utility Management Pilot is for electric bills only. However, if any of the properties selected have the electricity and gas combined under one utility company, the utility management company will still work to transfer billing of both services on these properties only.
• If any of the properties selected do not have electricity turned on due to safety issues or concerns, immediately notify your AMP so the properties can be removed from the pilot.
• If any of the properties selected are scheduled for closing in the next two weeks, and they have not transferred to the utility management company, please notify your AMP so the properties can be removed from the pilot.
• After the transfer has occurred, the utility management company will contact you with the details of the effective transfer date, and let you know to expect a final bill. At that time, please pay that final bill, and submit it to your AMP for processing.

Thank you for your assistance with this initiative

Titanium Solutions a dream or nightmare?

I have been a Titanium Housing Retention Consultant for a while now and as of tonight, I don’t believe I am anymore.

Let me say, when Titanium first started, it was a force to be reckoned with. They had clout, standing and were well respected yet, how time strips even the most promising of their ability to fulfill a profitable future.

You see, it has come to my attention through my experience and company insiders that Titanium has greatly reduced their Salt Lake city staff, greatly reduced their number of assignments and it’s staff are wondering, will today be the day the doors are locked.

I don’t want to talk about my personal experience with Titanium Solutions because, at one time, it was a company I truly supported and in fact, it could be argued that due to me, a lot of their HRC’s heard of them so, I have a bit of affinity for the company however, things have changed.

I have been rejecting assignments lately because the pay has become almost laughable, the contact ratio is ridiculously low and the short sale conversion rate has almost dried up. Granted, some might say all of these things depend on the individual agent however, I beg to differ.

You see, Titanium no longer has the monopoly on home retention specialist or short sale experts and thus, these homeowners are finding alternatives and not relying on the banks to make first contact. In fact, most of these homeowners are going to 3^rd parties like NACCA or Federal and State foundations set up through local community centers, churches and non-profit organizations. Truth be told, even banks are now sending out information to local resources these at risk homeowners can drive to in order to get the help they need so…..large national outreach companies like Titanium are finding this new market place of proactiveness very difficult to deal with. You see, the Titanium business model was built on a reactive frame work. In other words, when the bank wanted to make contact with a homeowner to save the home, they would send out Titanium as a last resort but, that is no longer they case. In fact, many States now handle home retention locally through nonprofit organizations so, instead of paying a company, they can get a nonprofit to do the work for much less.

Anyways, enough about why Titanium is failing let’s talk more about my call with Francine Bailey Bird. Francine is my HRC Manager, or something like that and she calls wanting to know why I haven’t accepted or declined my assignment. Well, I explained to her the pay was too low and we the conversion rate to short sales was non-existant because, many assignments we were now getting were strictly home retention. Of course, she begged to differ with me and that’s fine but, none the less, I told her I wasn’t going to be accepting the assignment if it was just another home retention assignement. She then proceed to tell me that is all she does and if I am not interested she can just remove me from all assignments. Her flippant attitude towards me really sealed it and I replied with a, “Ok, that’s fine with me”

So, as of right now, I don’t think I am a Titanium HRC but, I have to be honest, with a Area Manager like Francine, I am ok with that. I mean, I am sure someone would find her as effective and good at what she does but, if her job is to keep HRC’s and work at making them successful in a team effort….in my opinion, she will fail miserably.

I don’t think Titanium is on the right path, I think Excellen, their REO division has destroyed them and their reputation. I think they have lost a lot of great employees that once made them great and now they are dealing with a skeleton crew, over worked, under paid, under appreciated, jaded, pissed off Area Managers and now, they can watch their best HRC’s walk away because half of us were only staying on due to the promise of getting REO inventory and now we are one and half years later with nothing more than an email telling us Excellen isn’t expeting REO’s for a “while”

Sorry Titanium but, your house is obviously not in order and we are seeing it.

You may not have ever heard of Techwood Homes however, that doesn’t negate its pivotal role in American history, our history.

Techwood Homes was the first public housing project in the U.S. Located in Atlanta Georgia, it was completed in August of 1936. However, keep in the back of your head that it wasn’t till November 1937 that it was opened and dedicated by the trumpeter of Social Housing, Franklin D. Roosevelt, himself.

Now, it’s also important to know why America decided to get in the business of Government housing. The reality is, America had a concentrated number of poor and most all of the poor were living in slums. These were not nice places. In fact, many municipalities contributed large majorities of all their criminal activities to the slums and the poor who lived in them. So, in many ways, the American Government got into the business in the name of reducing or eliminating crime and yes, if it also progressed the Socialist Agenda…….well, that was a side benefit that wasn’t talked about much.

Now, the Techwood Homes were posh. They had bathtubs, electricity, ranges, garages, laundry facilities, library and even a kindergarten on site. By all accounts, they were nice, for what they were.

The sad part of this story was, the irony behind what eventually happened to Techwood Homes. You see, it became what it was supposed to prevent, a nest of crime, corruption and an example of urban blight.

After Techwood Homes were developed, many other Social Housing units sprung up in many urban settings, namely, New York, Chicago, New Orleans and San Francisco. Unfortunately, I can’t think of a single one that was ever trumpeted as a triumph…..I wonder why?

In 1996, Atlanta decided to destroy the Techwood Homes, it was an embarrassment to the city and because they were entering the world stage due to the Olympics, they couldn’t allow the blighted structures to stand.

The fact is, where you find poverty, you will almost always find high crime. It doesn’t matter how nice the house is, where the house is located, who maintains the lawn and plumbing, poverty is an incubator to criminal activity.

The Progressive leadership learned their lesson and decided that Social Housing, in the sense of large institutional style structures just weren’t a good way with progressing their agenda to provide government housing in their socialist society. I guess they never realized the power of poverty.

Shortly after these failed attempts, it became a political death nail in a politicians preverbal coffin however, it didn’t stop the agenda. It was during this time we saw private sector subsidy’s in the form of Section 8 housing and others.

Well, the socialist mantra, to never let a good crisis go to waste has never had such gusto. You see, during this housing crisis, which was engineered by progressives through the Community Re-Investment Act, they now see the light at the end of the tunnel. That’s right, a Progressive crafted crisis will give them the ability to forward their agenda and provide Social Housing through programs such as HAMP and other Foreclosure Prevention programs.

Yes, I am saying it and I am not apologizing.

I believe this housing bubble was engineered, crafted and laid in plan through the use of the Community Re-Investment Act and in turn, the Progressive dream of every American to have a home, laid down by F.D.R. can now be accomplished because no politician has the fortitude to tell people if you can’t afford your home, get out!

Make no mistake, I am all about saving people from foreclosure but, I also know that unless a homeowner has a job, counting peoples unemployment benefits as income so they can get approved for HAMP is a recipe for a bigger disaster or better yet, a door way for more Government assistance and possibly eventually allowing the Government to cancel the homeowner’s debt and remain in the home through a bank the Government has institutionalized or taken over……let’s say ….I don’t know…..Bank of America.

I do believe, it’s Obama’s agenda, along with the Progressive party, to either cancel the debt of homeowner’s who are struggling to make their payment or at least, give enough government subsidy that the homeowner can keep their homes under the waving flag of social housing. Be careful America, we are treading on dangerous ground.