Short Sale Process means TEAMWORK

How tight is the market for distressed properties in your world? Any recent changes in conditions?

Question asked me almost daily.

Yes, it takes time, patient and one major element, that most Realtors miss:

It also takes TEAM work to process the transaction.

If a short sale or foreclosure becomes available at a saleable price, there are multiple offers on it. This is especially noted in the below-$500,000 price range where demand exceeds supply by far over last year.

You need a strong team in place to help the client, (buyer or seller) get through this hectic process.

lenders are out of touch with the realities of the market. They bury their heads and claim they are not responsible.

There is a new law that Govenor Jerry brown has put in place to help the sellers through this mess, its SB458, this ensures any lender that agrees to a short sale must accept the agreed short sale payment as payment in full of the outstanding balance of all loans.

This law applys to jumior lien holders. Thats a big change.

There are 3 obstacles that the lenders throw in front of a short sale process.

1. Slow response time.
2. Loss of paperwork
3. Poor communications from lender.

The last survey taken, is that it took more than 60 days for the banks to respond to a short sale approval or disapproval, (soundsl like congress doesn't it)

But with a team in place, from escrow, title, appraiser, and yes even a local lender representing the buyer, things can get woked out.

One thing I always preach,

"The Realtor is the leader"

He or she must set the pace, keep communications going, follow up on every one and every piece of paper. By doing that, the team stays focused, and results do happen.



What kind of buyers are we seeing for distressed properties, in general?

There are multiple bids and the investors, and all-cash buyers, are winning out. Those willing to close quickly without a lot of contingencies are the big winners here.


However, the FHA has put a moratorium on the investors in that they cannot enter contract to sell to a buyer until 90 days has elapsed from their acquiring the property.

Even conventional banks are looking at that as being flipped to make sure the value (appraisal) comes in.

Whats the biggest surprise out there when dealing with short sale buyers?

Unrealistic expectations that many have regarding the price they can pick up a distressed home for.

Buyers that wanted to bid 10% below even that asking price. I hear this quite a bit: “10% below.” Maybe it is coming from seminars on how to purchase foreclosures, but it has no basis in fact.

There are very often of totally unrealistic offers “because the bank wants it off their books.” That’s another urban legend.

The banks have a duty to their investors and to protect the other properties in the area that the banks have a vested interest in — in the form of outstanding mortgages within the community.

The banks do not want to further erode the equity position they currently have.

The key is working with the banks, being professional, when they say paperwork is lost, then we are proactive, why argue and cause frustration? They too are under the gun, maybe they did lose the paperwork, but we are in a better position to get a new copy to them.

Team work in action!

We have completed 100% of all our short sales, but not because of the banks helping. In every single case, if we were not contacting them several times a week, they would not close.

The banks (every one of them) are a mess, overwhelmed, undereducated (lack of effort on the bank employees part), with systems (or lack thereof) that vary from negotiator to negotiator, even within the same departments.

The banks are willing to close and always have been, but they lack structure and an understanding of the process.


Many of my clients have asked me when we’ll see a market bottom — whether in your neighborhoods or in the regional overall?

Bottom has occurred already in the under $400,000 range. We still have people waiting for the $200,000 range which isn’t going to happen. When you can rent homes out for more than the mortgage payment, investors swoop in and rightfully so.

Numbers (rental incomes) don’t lie, it makes financial sense to invest.

So lets get together to discuss how to present short sale offers, let me go over my 10 point guide to buyeing a short sale and my 5 point sellers program to selling a short sale.

Then you will be introduced to the team that will make it happen and keep youi sane.

John Hacker

Unity west Realty Group
www.letsgobuyahome.com
jhackerleads@cox.net
949-275-3247
face book at Southern california Real Estate Consulting