Temecula, CA

• Banks - (each have their own Loss Mitigation department that handles  business a little bit differently)

• I would like to hear from some loss mitigation managers here?
• Please give us your comments on this blog regarding your procedures that you use to handle your inventory.  This will help educate Mr. and Mrs. Buyer.

• Borrower/Owner - (Depending on how much they owe and if they have a 2nd or 3rd Trust Deed) Is their short sale package complete?
• I would like to mention here that people loosing their homes are hoping for a short sale so that they do not have foreclosure on their credit report.  Many are victims of bad loans and it is not always their fault.  They need to be treated with respect and compassion. 

In my opinion a house should not be listed until the short sale package is accepted in the first place.  However, many owners anxious to get out from under their loans will list their property before their Short Sale Package is approved.  

• A short sale package is what the borrowers' bank uses to determine if they will accept less than the borrower owes in the first place.  The Borrower/Owner has to substantiate that they cannot make the payments due to lack of income or some other situation or hardship. 

Then, if the borrower/owner has the short sale package approved, the bank will determine what they will accept for a short sale price.  This is usually done by using a Broker Price Opinion.

 

Bank Owned Homes

• (If the Short Sale is not approved by the bank then the home becomes a Bank Owned Property when the borrower/owner has run out of time to "cure" the debt.) 
• The foreclosure process has gone through all steps. Notice of Default and Trustee's Sale are complete.  Property's title is in the Banks Name. 
• The Borrower now has a "Foreclosure" on their credit report.
• If the property does not sell at the Trustee's sale, (most do not), then the bank will re-list the property with another Real Estate agent. 

The Parts:

• The Condition of the house -  If the house has problems, such as water damage, that is a good reason for it to sit for a long time. This leads the general public to think that all houses are sitting and all houses should be purchased lower than the listing price.

• The Location of the house -  If the house is in a prime area, and in good condition, then there are probably going to be multiple offers higher than the listing price.

The savvy buyer versus The Impatient Buyer

The savvy buyer follows this plan:

• The Savvy buyer will wait and understands how long a short sale can take.
  • Due to the quantity of short sales being submitted to the banks loss mitigation manager, on a daily basis. 
  • And the fact that the loan could have been sold/packaged in a bundle of loans and several investment banks may need to be contacted to approve the offer.

• The savvy buyer has been educated by reading investment articles on the Internet, in books  and television shows.  He/she also listens to his/her Real Estate Agent who explains that the short sale process can be profitable but slow.

• The savvy buyer makes a full price or above full price offer depending on the most recent sale amounts of comparable properties, provided by his/her agent.

• The savvy buyer realizes that making a clean offer with no contingencies is best.

• The savvy buyer places several offers at the same time on several houses knowing that at least one will be accepted.

• The Savvy Buyer closes escrow on a home after a longer than expected escrow, sometimes 60 or 90 days. 

• The Savvy Buyer is in a position several years later to sell the house for a nice profit.

The impatient buyer follows this plan:

• The Impatient Buyer makes a lower offer than the listing price, "thinking that everyone should be just head over heels that he has made an offer at all".

• The Impatient Buyer is amazed that his offer is not jumped on and accepted immediately.

After only one or two weeks........

• The Impatient Buyer gets so angry thinking that it is someone's fault, his agent, the listing agent, the bank...that he cancels the offers and does not buy anything.

Which plan makes sense to you?