August 19, 2013

How to Select a Short Sale Agent

Posted by martikilby under Experienced Short Sale Realtor, foreclosure, Mortgage delinquency, Short Sale, Short Sale Negotiation, Underwater homes | Tags: , , , , , |
Leave a Comment 

If you are considering selling your home in a short sale, the selection of who will represent you is an important decision. Not only will the agent be marketing your home, but they have the added responsibility of representing you in negotiations with your lender(s) and securing approval of your short sale.

So if you are wondering how to select a short sale agent, here are some questions you will want to ask when interviewing potential agents:

• Does the agent personally do the short sale negotiation or do they hire an in-house or outside negotiator? If they use the services of a negotiator, the following questions should be directed to that person or company.
• How much experience do they have? No number of certifications will make up for lack of experience.
• What is their success rate? It is likely they have had at least one unsuccessful negotiation. Ask them why it did not get approved.
• Ask them to explain the short sale process and what you can expect in terms of a timeline and the documentation you will need to provide. (They should provide you with some sort of a handout explaining the process and describing the required documents.)
• Will they request a preliminary title report? (This is important in order to determine if there are additional liens on the property that will have to be cleared).
• Do they request that the buyer deposit their earnest money into escrow BEFORE the short sale is approved? (This is a good way to make sure you have a serious buyer and keep them in the game and not out looking at other properties. If the sale is not approved, the buyer of course gets their money back).
• How often do they contact the bank during the review process? (They should be in contact with the bank at least once, but preferably twice a week.)
• How often will they provide you with updates? (You should expect an update at least once a week.)
• If you have received a Notice of Default, and/or a sale date has been set, what steps will the agent take to have the sale postponed?
• Are they familiar with HAFA guidelines? Are they familiar with Equator? (If they do short sales on a regular basis, the answer to both should be “Yes”).
• Can they supply you with a reference from at least one client that was happy with their short sale services? Just because they advertise on TV doesn’t mean their clients are happy.
• And finally, are they empathetic regarding your situation, or is their only concern getting the listing? A short sale can be emotionally tough for you the seller and you should work with an agent who cares about you and what you are experiencing.

Do NOT believe them if they tell you they have an inside connection at your bank and can guarantee that your short sale will be approved. That is simply not true. Investors have the final say on approvals and it is highly unlikely that the agent even knows who the investor is at this point, not to mention that investors do not speak directly with negotiators.

If you have any questions about how to select a short sale agent for your San Diego County home, please don’t hesitate to give me a call for a confidential consultation.

 

June 11, 2013

La Mesa Short Sales

Posted by martikilby under Experienced Short Sale Realtor, La Mesa CA, Short Sale | Tags: , , , , |
Leave a Comment 

Thus far in 2013, here are the La Mesa short sale numbers; 41 detached homes have closed escrow, and 19 other types of homes, including condos and mobile homes. This is down considerably since 2012 when for the same period; there were La Mesa short sale closings for 69 detached homes and 31 for other types of homes.

Although these numbers have decreased in the past twelve months, it is likely that short sales will continue to play a significant role in our real estate market. According to Zillow CEO, Spencer Rascoff, 44% of U.S. homeowners with a mortgage still owe more than their home is worth. For the thousands of folks that remain underwater, a short sale might be a good solution.

If a short sale is an option that you’re considering, you’ve probably heard horror stories about how long it takes, and how few sales are ever approved. That’s often because the listing agent doesn’t understand the short sale process, or lacks the necessary experience and negotiation skills. Steele Group Realty has been negotiating short sales for 5 years and has a 95% success rate for successfully selling and closing short sales throughout the county. Here’s how we take the mystery out of La Mesa short sales and improve your possibilities for a successful close:

• Before listing your home, we determine if a short sale is an appropriate option and if you qualify according to general lender guidelines.
• We research your title report to identify any potential issues and develop a strategy to overcome obstacles.
• If approved to enter our La Mesa short sale program, we aggressively market your home on over 100 high-traffic websites to quickly secure an acceptable offer.
• Our professional short sale negotiating team works with your lender to win approval. We have an unbeatable track record, successfully closing over 95% of all transactions.
• All fees and commissions are paid by your lender, not you.
• Depending on the investor for your mortgage, we may be able to negotiate a relocation allowance ranging from $2000 to upwards of $10,000.
• From start to finish, we guarantee to keep you informed of the progress on your sale with regular phone and email updates.
• Click here for references

For a confidential, no-obligation consultation regarding a La Mesa short sale please contact me at 619-846-9249.

 

October 9, 2012

Will HAFA II Make Short Sales Easier?

Posted by martikilby under Experienced Short Sale Realtor, Fannie Mae, HAFA, Short Sale, Underwater homes | Tags: , , , , , , , , |
Leave a Comment 

Effective November 1, 2012, there are new guidelines for all Fannie Mae and Freddie Mac short sales.  The new program, dubbed the Standard Short Sale /HAFA II requires Fannie and Freddie servicers to manage short sales under one uniform process.  It is anticipated that this new streamlined process will make short sales faster, easier and more accessible to underwater borrowers.   Under the new program:

  • Homeowners do not need to be delinquent on their mortgage payments if they meet other hardship criteria.
  • Deficiency judgments will be waived in exchange for a cash contribution from certain qualified homeowners.
  • Military personnel who are relocated will automatically be eligible.
  • Up to $6,000 will be offered to  2nd lien holders to speed the process.

The new hardship criterion includes:

  • Death of a borrower or  co-borrower
  • Divorce
  • Unemployment
  • Disability
  • Relocation for a job

The good news is that this program should allow more homeowners to participate in a short sale and get out of a negative equity situation, even if they are not delinquent on their mortgage.  The bad news is that even with no missed payments; their credit will suffer as they will have settled their mortgage debt for less than the amount owed.  In the world of credit reporting, a short sale is a short sale, whether or not there was ever a missed payment or a Notice of Default recorded.

Overall, HAFA II should allow more homeowners to take advantage of a short sale and standardized processing can’t help but improve the whole experience for everyone involved.  As a Realtor who lists and negotiates short sales, I welcome anything that will streamline the often cumbersome and lengthy process.

If you live in San Diego County and are considering a short sale, or if you’re an agent looking to out-source negotiation, please call me for a confidential no-obligation consultation.

 

April 23, 2012

3 Ways to Kill a Short Sale

Posted by martikilby under Experienced Short Sale Realtor, Short Sale, Short Sale Negotiation | Tags: , , , , , |
Leave a Comment 

Short sales are tricky at best, and negotiating a successful resolution can try the patience of even the most experienced agent.  With the foreclosure clock often ticking, it’s important that the listing agent keep the transaction on track. Here are a few things agents should avoid that can be real deal killers:

  1. Accepting the wrong  offer.  If you know that the property has termite issues, doesn’t have a working heater, or has other significant repair issues, look carefully at the type of financing  the buyer will use.  VA will not allow the buyer to pay for repairs and it is unlikely that the lender will  pay.  FHA also has fairly stringent rules about the condition of the property, unless it’s a rehab loan.  If there are issues with the condition,  selecting a buyer that is using conventional financing, or cash and agrees  to buy the home “As Is” will improve your odds of success.
  2. Failing to  communicate.  As we all know, short sales are anything but short in terms of the time it takes to close.  Having a buyer that stays the course and doesn’t wander off to buy a different property is critical.  The listing agent should be in touch with the buyer’s agent at least twice a week and provide  updates as soon as they are available.    I also have the buyers deposit their earnest money into escrow within 3 days of acceptance of their offer by the sellers – we don’t wait for short sale approval.  Buyers that have put their money into escrow and receive regular progress reports tend to be much more committed to completing the purchase.
  3. Assuming….anything!  Just because you faxed in your seller’s tax returns, doesn’t mean that they were received and made it  into their file.  For most banks, allow 48 hours for items faxed to the loss mitigation department to be  posted into your seller’s file, then call and confirm.  Failure to provide documents when requested can kill the deal.  Also, don’t assume that the 2nd lien holder will accept whatever  pay-off, the 1st lien holder offers.  Don’t wait for the 1st to be  approved to start negotiating the 2nd .  Better to know what they want early in the game.

The list could go on and on, as each sale has its own peculiarities that could spell trouble.  The key to short sale success is a combination of patience, education, organization, tenacity and a crazy instinct to anticipate obstacles and leap over them before the deal dies.  Good luck out there!

For a no-obligation consultation regarding a short sale inSan Diego County please give me a call at 619-846-9249.

 

April 14, 2012

Is Lazy Worth $200?

Posted by martikilby under Bank of America, Experienced Short Sale Realtor, Short Sale Negotiation | Tags: , , , , , |
Leave a Comment 

I attended a webinar on Tuesday that was presented by the Charfen Institute, all about the changes that are occurring in short sale processing at Bank of America, effective tomorrow.  As I currently represent the sellers in two B of A short sales, and the buyers in two other B of A short sale transactions, I logged-in wanting to see if there was anything I had missed in reading the information at their short sale resource center.

The information in the webinar was well presented, including a slick commercial for the Charfen Institute CDPE (Certified Distressed Property Expert) Designation Course.  However, I didn’t really learn anything new….

But the thing that really got me steamed was the marketing “call to action”.  If I signed-up to take the CDPE course before 5:00 p.m. Thursday, I would receive $900 in FREE Resources – a CDPE short sale success bundle.  Here is one of the items included:

“Bank of America Add-On Kit ($200 value) – Get the five newly-required documents that MUST be submitted with all short sale offers, effective April 13.”

My problem with this is that the list and actual documents available for download are offered for FREE at the Bank of America short sale site….so how is this a $200 value??? 

And the other two items valued at an additional $700 and included in the “success bundle” are all things that are available online from the various lenders, or with a phone call – all at no charge.

Now I’m all for free enterprise, understand incentives, and the take-away tactic in sales.  And I am not knocking the CDPE course, of which I’ve heard good things.  But come on!  I just don’t think it’s right to assign a dollar value to something that is not under your copyright, that is free, readily accessible, and a necessary component to our job representing clients in a short sale.  Why not just share the links?  I would have been more impressed. Is the $200 value assigned because of convenience to the agent?  In my book, if an agent is too stupid or lazy to figure out how to get lender forms, they shouldn’t be doing short sales, with or without any certification!

 

 

 

March 13, 2012

The Bank of America Un-Cooperative Short Sale

Posted by martikilby under Bank of America, Short Sale, Short Sale Negotiation | Tags: , , , , |
[2] Comments 

Last March, I participated in a Bank of America webinar where they introduced their Cooperative Short Sale Program.  I remember being cautiously optimistic because the speaker promised that the Bank would respond to offers in 10 days.  Well, it’s now been five, yes five months since I uploaded an offer for the Cooperative Short Sale purchase of one of my listings.  We are finally in escrow and set to close on April 6th, but this has been, to say the least, a rocky road and not what I would call a “cooperative” negotiation.  Here are a couple of the low points:

  • The amount that B of A was offering to the 2nd lien holder was incorrectly communicated to  me.  They offered one amount and  then later came back with a much lower figure. I had to escalate the issue  and get pretty angry to make them stick to the original amount offered.
  • Shortly after finally getting  an approval in the first week of February, our buyer lost her job and we had to substitute her husband as the buyer.  Same transaction, no changes except the loan and sale were now going to be in the husband’s name.  It took over a month to get a new approval, and that was after I again had to escalate the issue.

Here is what I see as a big problem with the whole system:  Although the Equator platform is supposed to keep all parties in communication, it really doesn’t work that way.  Bank of America farms out the work of negotiating their Cooperative Short Sales to Asset Management Outsourcing, Inc., AKA, AMORecoveries.  So during the whole “negotiation” portion of the short sale, the agent for the seller is only in communication with a case worker at this company.  If you do need to escalate a matter to B of A directly, they might not be in the communication loop as far as the file and Equator are concerned.  Additionally, I find communicating through Equator sketchy at best.  Every step of the process is a “task” that gets accepted, completed or denied, and let me tell you, a short sale is simply not that black and white.  The only way I really got anything accomplished was when I could actually speak to someone.

Once you finally get an approval, the file becomes the responsibility of a “closing specialist” back at B of A.  So the person you’ve been dealing with throughout the whole process is now out of the picture.  When we had to substitute the new buyer, the file went from our “closing specialist” at B of A, back to AMORecoveries, to a different negotiator who thought it was an entirely new file!  I thought I was going to tear my hair out!

So I’m not a fan of the Bank of America system or the Cooperative Short Sale program that was supposed to streamline the approval process.  And I know that without going up the food chain and fighting for my seller this deal wouldn’t be closing.

 

Got a tough short sale in San Diego County?  Give me a call!

 

 

 

December 1, 2011

2nd Lien Holders Blocking California Short Sales

Posted by martikilby under 2nd mortgage, California SB 458, Short Sale, Short sale deficiency, Short Sale Negotiation | Tags: , , , , |
Leave a Comment 

Well, we saw it coming, and sure enough, as a result of Senate Bill 458 2nd lien holders in California short sales are putting on the squeeze.  The bill was well intentioned, as it restricts 2nd lien holders in a short sale from issuing a deficiency judgment or demand that the sellers bring money to the table. 

But since the bill passed in July, I am increasingly seeing the 2nd lien holder holding out for a pay-off of as much as 35% of the remaining balance on the 2nd TD.  And they don’t care who brings it to the table.  I recently had a 2nd lien holder request that the seller ask her friends if they could contribute!  Are you kidding me?  The result of course is that 2nd lien holders may be blocking California short sales.

Case in point:  I have a short sale that I’m negotiating with servicer G—-T— in the 2nd position. They are demanding 25% of the outstanding balance on the 2nd, which is approximately $40K, so they want roughly $10K.  The 1st lien holder won’t allow more than 6% ($2400) to pay-off the 2nd.  The buyer is contributing another $2K and the selling agent and I are each kicking-in $1K…but that still puts us short of what the 2nd lien holder is demanding by $3600.

So, I’m in the process of trying to negotiate with G—-T— to lower their demand.  Don’t they understand that if they refuse to accept a lesser amount the property will foreclose and they’ll get nothing?  The 1st lien holder is holding firm at 6% and there is simply no other source of funds.  Will they lower their demand, or will this be a failed short sale, killed by the 2nd lien holder?

 

August 8, 2011

San Diego Short Sales: The Real Numbers?

Posted by martikilby under Exp[erienced Short Sale Realtor, Real Estate Sales Statistics, Short Sale | Tags: , , , , |
Leave a Comment 

In the world of real estate, being an effective representative for your client means staying on top of sales numbers and making sure that you have a clear picture of the market place.  So I spent some time today researching short sale numbers in San Diego County and found two interesting statistics: 

  1. There has been little change in the number of short sales that have closed escrow this year as compared to the same period last year.

                                      Detached Homes                Attached Homes

            2011                2172                                        1508

            2010                2074                                        1578

  1. The number of short sale listings that did NOT sell in the same period is much higher than I believe most people would expect. 

                                     Detached Homes                 Attached Homes

            2011                2371                                        1462

            2010                1769                                        1227

This means that roughly half of all short sale listings this year did not become successful sales transactions.  So what happened to these homes and their owners?  We can hope that some of them received permanent loan modifications or in some manner managed to reinstate their loans and keep their homes.  But it is likely that the majority became foreclosure statistics.

And why does the short sale listing failure rate seem to have increased this year over last?  Is it just because there were more attempted?  Are the bank requirements becoming more stringent?  Are there more inexperienced agents trying to handle the negotiations?

The answer is probably, “All of the above.”  But whatever the reason, don’t let your short sale become one of the failed statistics.  Make sure that you work with an experienced short sale Realtor who will pre-qualify you and your home and knowledgably guide your negotiations to a successful conclusion.

 

 

May 30, 2011

Bank of America’s Cooperative Short Sale Program – Not as Advertised?

Posted by martikilby under Bank of America, Short Sale | Tags: , , , |
[5] Comments 

In March of this year, I reported on the newly introduced Bank of America Cooperative Short Sale Program.  As noted in that post, the two key elements of this new program are the relocation fee of $2500 paid to the sellers, and the timeline.  Instead of waiting for the short sale seller to find a buyer, this program was designed so that a seller could submit all paperwork in advance and be approved prior to a purchase offer.  According to Bank of America, by approving the property value and seller hardship up front, this would decrease the amount of time needed to process the actual sale and approve the buyer once an offer is presented to the bank.  At that time, the bank indicated this would shorten that approval timeframe to about 10 days.

So when my negotiator called last Friday to let me know that Bank of America had determined that one of my files might be eligible for a Cooperative Short Sale, my first thought was, “Great!”  I figured that we’d be able to get this closed quickly as we already have a strong buyer, and my sellers would receive $2500 to help with moving costs.

I then asked about any down-side to my sellers accepting the Cooperative Short Sale versus a traditional B of A short sale, and my negotiator’s response was surprising.  She said that in her experience, (and she has been a full-time short sale negotiator for several years), the Bank of America Cooperative Program takes about 6-8 weeks LONGER than their regular short sales.  Longer???  The normal B of A processing time is 6-8 weeks, and now participation in this program would essentially double that?  According to my negotiator, the reason it takes longer is because there is a more intense review of all seller financials – probably needed to justify the $2500 relocation payment.

My first thought as a Realtor protecting my seller’s interests, is that participating in this program could double the chances of a buyer to walk!  It is hard enough to keep buyers waiting 6-8 weeks for an approval, but to extend that period for another 2 months is asking for trouble!  I have also heard it rumored that by performing a more intense financial review B of A is actually looking to see who has sufficient assets to target with a deficiency judgment.  I don’t have any evidence to support this, but it could pose a potential risk if there is any question as to whether or not the seller’s loan is protected under the state’s anti-deficiency laws.

I presented the choice to my sellers who quickly decided that the risk of losing their buyers was not worth a $2500 gamble.  Who knows?  Their file might have been processed quickly, but on the other hand we might have ended-up back at square one looking for a new buyer.  It is definitely a choice that each seller will have to make based on their unique situation.  If anyone out there has experience with this B of A program, I’d love to hear from you!

 

May 10, 2011

The Secret to a Successful Short Sale

Posted by martikilby under Realtor, Selling your home, Short Sale, Short Sale Negotiation | Tags: , , , , , , |
Leave a Comment 

No secret, actually.  The success of your short sale all comes down to your listing agent.  Really.  Negotiating a short sale is one of the most challenging jobs in real estate today. An agent representing a short sale client is responsible for helping them get out from under a huge financial burden and save their credit, and responsible to the new buyers for closing the deal in a reasonable length of time.   Without the right agent representing your interests it’s easy for the deal to fall apart and your home go to foreclosure. 

Here are some important questions to ask a perspective agent before listing your home as a short sale: 

1)      What is their short sale experience and what percentage of attempted sales have they successfully closed?  This is not the time to hire an inexperienced agent as short sales are an intricate process that requires an understanding of lender procedures and requirements.

2)      Do they do their own negotiation, or do they work with a professional negotiator?  An experienced, professional negotiator may be a real plus as that leaves the agent with more time to focus on marketing your home and finding a qualified buyer.  Also, a professional negotiator will have established relationships with a greater number of lenders which can often help expedite approvals.

3)      Will the agent pre-qualify you for the short sale?  Although the lender will have the final word, an agent should be familiar with all required documentation and be able to pre-qualify you for a short sale.  If economic hardship cannot be proven it is unlikely that the bank will approve a short sale.  They should also be able to let you know if you might be eligible for HAFA.

4)      How will the agent determine the list price of your home?   Listing your home too low may get you a quick offer, but it’s likely the bank will counter and you may lose your buyer.  Remember, the bank needs to recoup as much of the loan amount as the market will bear.

5)      What is the process?  An agent should be able to explain the entire process and timeline and describe exactly how and when you will be updated on progress.  They should also be able to provide information about the pros and cons of moving early in the process or staying in your home until closing.

6)      How will they market your home?  Over 90% of buyers begin their home buying search online.  Make sure your agent can provide an extensive online presence for your listing.

7)      What is the outcome that you can expect?  The agent should be able to discuss the potential outcomes including 1099s and deficiency judgments. They should also make recommendations to you about seeking the advice of other professionals, such as a lawyer and accountant.

8)      And finally, can they provide you with references of past short sale clients?   Hearing from a satisfied client can go a long way to easing your concerns.

A short sale is a complicated transaction, but it needn’t be stressful.  Please don’t hesitate to contact me with your questions or concerns.  I have a 100% short sale success track record and look forward to hearing from you.

 

Next Page »