Hello everyone! Whew, went on a small blog hiatus there. Now im recharged and ready to go! New subject today is the power of Short sales, On the listing side!

Now I already have a pretty detailed section on short sales on my main page curtailing how they work out, what is required, etc. etc. (some of which has already changed. FOR EXAMPLE. . . now they're starting to look at doing closing costs) yet they are more concerned with their net, so sometimes you have to raise the price to accomodate your closing costs. (for example, house is listed for 100000. You want three percent concessions. That's 3000. So a lot of times the bank would like to see an offer of 103,000 with 3% concessions) Anyway, the point here is that if you are in a bind and trying to avoid foreclosures (IE in the preforeclosure status), The Short Sale is very powerful! REO's are fantastic buying side, but everyone of those REO's/Lender Owned properties all had someone take a foreclosure sized bite out of their credit report.
On Short sales this is a situation where WHO you have listing the property is super important. ASK! are you familiar with short sales? Agents are starting to get a better handle on short sales and REOs as a whole, but a lot are lazy. They'll list them with no pictures, no descriptions on them (no personal touches, or detailed descriptions; pretty weak agency in my opinion.) Same goes for REO Agents, but that's a story for another day. Short sales, like REOs and every other listing require good exposure if you want to help pull the home owner out of their potential wreckage. They are a long winded procedure that ends up being a arduous, overwhelming and downright infuriating. . . YET with the proper agent it can be a great experience.

One of the major keys to success is having an annoying gnat attitude about it. If your agent says they'll call every few days or once a week; they are just asking to get put on the bottom of the pile EVERYTIME!!! These people need to be hounded, and bugged, and inquired, and have their shoulders looked over constantly! You'd think a bank would want to get a situation for a possible foreclosure (REO) off their books as soon as possible. (Banks are not in the business of Real Estate Owneds (REO); They are in the business of selling money!) If someone advertises being a short sale expert; question them! What do I need to have together in my short sale package (here is a good one to get them with cause there are some standard items people need, and then other specifics depending on who the bank is, and what temperment they feel that day) so if they give you a definitive answer, or make it sound vague . . . gauge that out. They need to first get your approval to negotiate on your behalf with your bank ON THE SUBJECT PROPERTY ONLY! Read the letter they put together, and make sure they don't have full access to everything concerning that bank *Especially if you bank there, or have other properties* they should only be granted full access to THAT loan. Period.

Then this is where it starts to get messy; the "short sale" department at a bank is their loss mitigation, or some other similar name, department. This is a pain to get in touch with, to even find out numbers for, etc. Once you've made the plunge this far, you have to turn your A game up and get answers! They might ask for the whole short sale package now, and tell you they're ordering a BPO (Broker Price Opinion) and they'll tell you a value they want the house listed at. This is the PERFECT scenario, so as you can guess it RARELY happens! Most of the time on short sales, they will let you submit the short sale package, and then tell the listing agent, "We want an offer before we go any further. . . " What a shot in the foot! now you have to wait for someone to make an offer on the property. This is where that nicely showcased jazzed up home that was expertly marketed for you comes into play. You'll get that potential short sale (or also called lender/corporate approval listing, or Sale subject to lender approval) a lot of exposure, and in turn showing, and finally offers. Now what property is going to be seen first; the nicely staged, great pictures well described house... Or the one with no pictures and ONLY has instructions on what to attach with the offer where the house description should be.

The listing agent can make or break these deals! it's crucial to have someone informed... Now for the good part *yes there is a light at the end of the tunnel IF you can make it that far* . . . After all of the paperwork, and constant fighting everyday on the phone, and bugging, and annoying, and pestering, and prodding, and incessant iron willed determination; you get an acceptance letter from the lender. WHOO HOO it's approved! Now you have an approved short sale. (there are still hurdles mind you, what if it took 3 months to get this letter... is your buyer still around? maybe, maybe not... but then at least you know what price the bank wants, and you run with it from there) So now that it's approved, (the buyer should already have a fully executed contract from the seller within the contract acceptance date) you send out the letter, open escrow. . . and now you have to dodge all of THOSE bullets that normally would be the only ones! See how glorious short sales are... but wait, I told you there was some good stuff, right!

After the bank slashes the agents commission and finally accepts defeat and gives that acceptance letter, the client who's house was in foreclosure gets to sell it for less than they owe. . . and they are FORGIVEN FOR THE FULL AMOUNT! you owe 178,000, you get approval to sell it for 150,000. . . you don't have to pay that 28,000 you just saved. . . AND it's not going to be reported as supplemental income to the IRS. Now after all the hell you and your listing agent had to endure; Here is that light at the end of the tunnel. How it affects your credit is different each time. it's usually 30-60 points off of FICO *heard of it being less, other times a little more* but that sure beats having that foreclosure for 7 years on your credit report... AND you saved money!
So instead of staving off the inevitable, get in contact with me immediately! This is a long process, so allowing ample time is crucial! With everyone working diligently towards the goal of closing it out, avoiding becoming an REO (foreclosures), and being forgiven for the full amount of your loan via paying less. . . this isn't a bad option at all! REMEMBER last thing that is important; you need to prove that you have a financial hardship and NEED their help.

Thank you so much for reading this... If any of this interests you, you would like to learn more, (or learn about anything else related to real estate), want listing, etc. Please contact me! I appreciate it, thank you all very much for reading this!
REMEMBER...

There are no foolish questions; it is only foolish to NOT ask questions!

Jason Caballero
Dan Schwartz Realty, Inc.
Mobile: (520)250-6369
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