Tom Perry

Sometimes we forget that foreclosure is the other side of short sale. As real estate agents, many of us work with buyers wanting to purchase short sale properties. The reason, in most cases, is that buyers are looking at short sales to get a great deal or "steal" a property. The chance of getting a great deal is slight even though it is possible. We have found that the best deals for investors are on bank owned properties.

Sellers on the other hand, rarely think about the short sale. They simply want to walk away from their property without any obligation to repay the existing mortgage. They're fed up, angry and embarrassed. In some cases this is possible to simply walk away, but there are some situations in which the seller will still owe money after closing. The Sellers would certainly negotiate differently if they understood this.

The Seller must qualify for short sale relief?

- The lender will look at the Sellers situation to determine if they qualify for a short sale. Their financial situation scrutinized income, employment, expenditures, savings and net worth all play into the decision.

The lender makes the final decision on the price and terms of the sale?

- The bank may consider a short sale if there is $400,000 owed on the property and the lenders appraisal shows that it is worth $300,000 today.

- As the days on the market grows, the lender may be in a mindset to accept less but not deep discounts.

- The condition of the property and market trends in the general area my play into the decision. A good house in a good neighborhood will generally sell for close to fair market value.

The lender can come after the Seller for payment of the net balance due?

- The lender may require full payment of the debt if the Seller can NOT prove that they are financially incapable of paying.

- A second mortgage or a refinance in which the Seller took cash out may be reason for a "Deficiency Judgment".

- They can file the judgment up to 7 years after the close of the short sale.

Hire a qualified real estate agent.

- The agent must understand the process.

- The marketing strategies incorporated by the listing agent can be a big part. Looking at this $300,000 property with an existing mortgage of $400,000; The lender may take a long time to reply or not reply at all if the agent lists the property at $240,000 and the Seller accepts and offer of $210,000. The listing agent did NOT try to protect the banks interests.

Consult legal council.

- A real estate attorney will explain the situation and the Seller's options. They will map out the best plan for the seller.

- They will negotiate with the lender for them and be sure that every step is taken to eliminate the chance any future deficiency judgments or negotiate a smaller balance in interest rate for the Seller in cases where the judgment is inevitable.

In Summary: A distressed property facing foreclosure, especially one that is new on the market with a price that seems too good to be true, isn't the best option for your buyer. See my blog post "... Patience. The lender is only looking at their bottom line. Their vantage point is through data only and their strategy is to reduce loss for the company. In most cases, the Seller has little incentive to negotiate a high price and very little leverage. The Buyer must be sure to enlist the help of a qualified agent with short sale experience. Many agents don't understand the process and make strategical mistakes in the process.

If you're thinking about listing or buying a property to be short saled, contact Tom Perry today. TomPerry@RealtyExecutives.com Tom and his team is ready to assist you to explore your options. See our website to search for properties and to see more of my blogs. www.teamBePicky.com

We are finding that a quick consultation clears the doubt of most home owners that are facing foreclosure. The real question is "What are my options" and "What does it all mean to me"?

What if I not late on my payments?

How long can I stay in my house?

Will the bank want repayment for the amount they don't get paid?

Does the bank pay all my fees?

Can I make a little money from the sale?

The questions go on and an. The most important thing for you to know is that time is your enemy. The clock is ticking. You MUST make a decision soon or run the risk of a 7 year foreclosure on your credit history.

Just contact us at shortsales@BePicky.com to set an appointment for our FREE ... NO obligation - NO hassle ... consultation. We will look at the information you have received from your lender and explain the options that are open to you.

You're new at real estate investing and want to get a great buy on a house. Short sales seem to be the way to go, BUT ... When is the best time to buy? There are two things to keep in mind.

Do you know someone that is facing foreclosure? Or maybe someone you think is in financial trouble but too embraced to talk about it. Be a friend and let them know that with a foreclosure, it's not time to drag your feet. Time is of the essence!

There are three distinct periods they are facing.

First, when they know there is a problem and they're doing everything they can to solve it. But, they know that they're in trouble. This is when the fear and embarrassment starts. It's hard to talk about.

Second, is when they get the notice of default letting them know that they have 30 days to bring the account current or sign a forbearance agreement to repay the amount owed. Neither option is usually realistic for them. There isn't enough money to make the regular payment. They can't pay more each month and probably can't get a large lump of cash to bring the account current. Now it becomes more real. "We are losing our home". They need a friend.

The third begins when they get home and there is a foreclosure notice stapled on their garage. Their heart drops. "What are we going to do"? During this whole time they may not tell a soul about what they're going through. Some simply drag their feet thinking it will somehow be OK. They now have 90 days to cure the debt, sign a forbearance agreement, get the home SOLD or walk away. Curing and forbearance are simply out of the question in most cases. So, Selling the home in a short sale if the answer. We can help them but it takes 90 days or more. So let's get on it.

To find out more about foreclosures and short sales go to www.BePicky.com . Scroll down to the foreclosure box and click ... To discuss your options email Tom Perry at ShortSale@Bepicky.com

The bottom of the market: That specific time that the prices are the lowest so you can buy the most house for the money. That's all fine ...

Last week the interest rates increased more than 3/4 of a point. That's huge. Do the math. A $400,000 loan at 4.75% increases to 5.75% and it cost you $8,100 over 5 years. The tough part is this; If you qualified to the limit at 4.75% for the $400,000 ... with the increase to 5.50% you can only purchase about $365,000.

So the market may have come down but the increase in interest rates has more than washed that away. The home you can buy may be of lesser quality that those you could buy 2 weeks ago.

I've been saying for the past 3 months, "It's Time". To find out more about us and our services, go to www.BePicky.com. Contact Tom Perry directly to schedule a meeting to discuss your options.