Adriana West

It is incredible how many times I get a call from an agent in Metro Altanta, and when they hear that the property is a Short Sale, they decide not to show it.

Ladies and Gentlemen, I would like to share with you that Short Sales are a great way to continue in this market as a Real Estate Agent, either helping a seller in financial distress or motivated buyers with their next dream home.

Sellers will become clients for life, when you are there at their side helping them through their toughest time ever. Buyers are also going to be very impressed with your ability to help them walk in with equity in their dream home from day one. And most important, you will be able to continue your business as an agent - which is my passion and way of life. The market is showing us that there is a time for competition, and there is a time for us agents to get together and cooperate.

By the way, statistics show that after this Foreclosure madness, Lenders are getting ready to shift all their energies to the Loss Mitigation Departments due to the fact that Foreclosures are not working - too much money has been lost already. 2009 is going to be the Short Sale year, whether or not you make the shift with the market and are ready to represent your buyers in the best ever market to buy houses. I will be working with each of you as a professional on the listing side, and it will be my pleasure.

The reality is that lenders lose millions daily with foreclosures, but not that much with a Short Sale process. We, agents that work with Short Sales, are adding a small drop of help to all this financial mess in which we are living now.

In the month of November, I received an offer on one of my Short Sales in Cumming, GA (Forsyth County) which had great numbers for the lender. After sending my Short Sale packet, and going through the BPO process, etc., the Negotiator for the lender called me and told me the number for their ‘final counter offer': Full Payoff.

The builder had not finished the subdivision. They are selling NEW construction for far less than the negotiator was asking, less than the buyer had offered.

At the end of the day, the buyer decided to withdraw the offer. When the lender understood his mistake, he offered to accept the original amount from the buyer's offer.

Too Late... When I tried to call buyer's agent again to revive the transaction, he was very frustrated and not very cooperative.

Agents and Buyers, I share your frustration. My advice is that even though the lender is aiming that high, please understand that most of the time the people who have been assigned to a particular file have not been in that position for very long. Usually it is 6 months or less. If you are patient and are sure you have made a fair offer, stick with it for a bit longer. The lender will understand that they need a reality check.

At the end of the day, if we AGENTS work on our client's best interests, we close more transactions, and I said to this particular Agent: Christmas would be a better holiday for everybody.

Some months ago, I had been working on a Short Sale for several months in Lawrenceville, GA. After investing many hours of work, and finally finding a buyer, the lender who owned the loan told me that their system was so SLOW that there was no way to stop the foreclosure process and make the Short Sale happen.

My client was a senior citizen who did not have work, and could not afford where he was living. As I mentioned, we had a buyer willing and able to buy. The offer I received in July was to close "As Soon As Possible" and his loan was processed and ready to close.
Still the lender was going to foreclose.

Let's look at the reality four months later:

The lender has foreclosed on the property. It has been on the market for $2,900.00 more than the offer I presented to them, and they still don't have a buyer. Isn't it incredible that a lender would prefer to pay all the costs associated with a foreclosure ($7,000.00 would be a very cheap estimate), to have a house on the market for another six months, without getting the least bit of revenue - and at the end of the day sell it for LESS than what was offered in the Short Sale? On top of that, now my client will end up owing much more money to this lender, who will be investing yet more money on lawyers trying to collect on that debt from a Senior Citizen with no job and no income - whose children are now caring for him.

This is the beginning of my new series called Reality Checks because I have run across people on each side of a transaction who are not living in reality. This lender was one. In the series, we will also explore Buyers, Sellers, and Agents on both sides that need a Reality Check like this lender.

To me, this thinking is amazingly short sighted and stubborn. Everyone loses except the lawyers. The lender, for sheer stubbornness, will lose thousands of dollars - just because their system was too slow to stop the foreclosure engine.

Have you experienced examples where someone involved in a Real Estate transaction needed a reality check? I'd love to hear about it. Please leave us a comment here.

Statistics show a 25% increase this year in foreclosures, from September 2007 to September 2008. Foreclosures are at an epidemic level we have never seen before. The bailout was supposed to help, wasn't it?

Well, yes it was. But keep in mind, it happened in October and will take some time to have an effect. In addition, it was never intended to stop foreclosures, but to prop up the credit market overall so that money can continue to flow. At best, it stops the slide in prices that occurs when buyers cannot get loans to buy. Its aim was the overall economy, not the individual.

The original bailout idea was for the government to buy "troubled assets" meaning those mortgages that were in default and near foreclosure. The thinking was that it would provide funds to the banks to loan again, and provide some cover for those facing foreclosure so they don't lose their house immediately. Renegotiation of the loan might be possible, allowing the homeowner to afford to keep paying on their home.

But all that has changed. The government has decided instead to invest in stocks of the banks. It provides them with the same cash to operate, but they keep the bad loans. And many banks, instead of using the money to make loans, are using it to purchase other banks.

So where does the homeowner stand in all this? On the sidelines. Essentially, for you, nothing has changed.

The FDIC, however, actually has proposed an idea aimed directly at you. They want to create a 300 billion dollar program to renegotiate loans.

Also Wednesday, Housing and Urban Development Secretary Steve Preston said the government may let more borrowers qualify for a $300 billion program designed to let troubled homeowners swap risky loans for more affordable ones. The program was launched Oct. 1, but there are concerns that lenders won't participate because they have to voluntarily reduce the value of a loan and take a loss.

Unfortunately, the treasury secretary is adamantly opposed to this, and the President has already expressed his opposition to it. So there is no relief in sight right now for the homeowner in trouble.

This means that Short Sales are just as needed, or more so, than they were before. Call me and let me see how I can help you get out of financial trouble, and preserve your chance at a financial future. And comment here with your opinions of the bailout, the economic crisis, and the government's response. We'd love to hear from you.

As a Short Sale Specialist in the Atlanta area, I run across all kinds of people in a variety of hardship circumstances. The first thing I need to do is figure out if a Short Sale is right for them. It is not for everyone, and I only take on the Short Sale if it is right for the client.

After hearing what has caused the current hardship, I try to help the client understand their options. Each situation is different, and there are no clear lines to which option is best. Generally, though, there are seven different options.

1. Refinancing. Can you qualify for another mortgage, one that you can afford? That's always the best option.
2. Selling the house as a normal transaction, even if it means bringing cash to the table - if you can.
3. Working out a plan with the Lender. Amicable settlement is better for everyone.
4. A Short Sale. The lender must agree to accept less than the principle and not hold the seller responsible for the difference.
5. A deed in lieu of Foreclosure. Give the house to the lender to terminate the mortgage. The homeowner might be responsible for the difference between what the lender sells the house for and the principle.
6. A Foreclosure. The homeowner loses the house and their credit rating is damaged.
7. Walking away. This is the absolute last resort. The homeowner's credit rating is heavily damaged.

Let me help you figure out what option is best for you. Give me a call, or leave a question or comment here. I'd love to hear from you.