Joe Pryor.com Realtor Oklahoma Investment Properties

Part 2-What consitutues a Hardship for a homeowner and what is the next step.

In Part 1 we went over the reasons why a homeowner should consider a short sale if they are in default on mortgage payments. In this section we will go over what a mortgage company needs in order to accept the homeowner as a short sale . In many areas of the country where bubble prices have deflated, many people are under the value of their mortgage balance. In Oklahoma City, that has happened in very few cases. A mortgage company is no automatically going to give you a free pass just because you want to walk away from your payments, so let's go over the three most common reasons for a short sale.

Job loss or job disruption. So many families have two wage earners to keep up with expense requirements. When one or both loss their jobs, or if they are shifted down to part time work money gets really tight. You have to have your car for transportation needs and you can't neglect the kids. Even in the "low unemployment" environment of Oklahoma people lose their jobs, and the rate has climbed to above 6%.

Medical Reasons. Medical probelms can be devastating. I personally experienced this last year by being in Houston for 3.5 months with considerable personal expenses for cancer treatment. Fortunately I had reserves, and our business in mobile and i had a team in Oklahoma City. Most people can't do that.

Divorce. Oklahoma City has a divorce rate of around 50%. When two people are on the note and mortgage and one leaves, it can get to be a problem. I am listing a short sale today for this very reason. Also these problems don't have to be separate. Having medical problems can lead to job loss, and a loss of a job can lead to tensions that create divorce.

What is the next step? In Part 3 I will post about how to select a Realtor to help you. I will tell you now that considerable paperwork needs to be done to back up the hardship. My team does not list the property without anywhere from 40 to 100 pages of documentation done upfront. We will need a financial statement, tax returns, a hardship letter explaining the problem, and more. FYI, mortgage companies can't make empty your 401K or use your credit cards to make up differences if you have a hardship. Loss mitagators are swamped with work right now, and an incomplete packet will get you to the bottom of the pile. This packet is not sent in until a contract is signed, and typically loss mitagators get bonuses on the number of files they can push to Phase 2. In part 3 I will detail the qualifications needed in a realtor to rescue you from foreclosure. In the meantime you can check our our short sale answer site at www.stopforeclosureoklahoma.com.

Okay, my 3G cratered, Apple replace in under warranty, I sold it for $99, it was the 16 Gig, so for a 100 bucks I got the new one. It is faster and I like that, and it has a battery life that is much better. I could have used that in San Francisco at Inman. But the feature I love that comes with the phone is the compass.

Yes I am a guy and my sense of direction is limited. I think GPS's were made for us so that we didn't have to stop and ask for directions. But the compass is more. If gives longitude and latitude, and can do more. It can show you the google map placement, and give you the satellite view. The other thing I like about this is I can go to homes and landmarks and save the data, to be later put on a Google map, or one of the real estate designed versions like Mueller Maps or ZeeMaps. I love the new upgraded phone and this was an unexpected bonus.

Part One-What is a short sale and why do one?

Let me first state that Oklahoma City compared to the rest of the nation is doing great. This does not mean that evertything is perfect here in the Heartland. The last seven years has seen easy money, low qualifying credit scores, and the overall national meltdown has not left us unaffected. We have foreclosures and we have short sales. For many this is a devasting loss, but for others, they seem to be unaffected about losing a home. Our team does not care about whether you care or not becasue someday you will care, especially when you try to get any kind of loan. We will attempt to answer all your questions in this series. The first three will be about sellers, the next three will be for buyers, and the last will be for tieing all the lose ends together.

Why should you consider a short sale? I guess we should start off talking about what a short sale is. A short sale is when a lender or lenders decides to take a loss up front versus a larger loss later. Typically the loss is double for a foreclosure so a short sale can be a win for the owner, and a win for the lender. You first have to establish a hardship, then you have to be transparent about your finances, and as we will wstablish later, you need a Realtor who is a professional at short sales, not someone doing on the job training. Let's go onto why you should do it.

First is taxes. If you are an owner-occupant who decides on a short sale, the IRS will not consider foregiveness of debt as income through 2010. In foreclosure this is not so. Ask yourself, would you want to have to pay taxes on money you never made? The IRS gets theri way.

The second is future loans. In a forclosure an owner-occupant can't get a Fannie Mae loan for 5 years, and an investor for 7 years. In a short sale that period for both is reduced to 2 years.

Third is your credit score. A foreclosure is a minimum of a 250 point hit to well over 300, and has a three year period it strongly affects you. On a short sale only your late payments will affect your score and the credit hit can be a low as 50 points.

Fourth is the length of credit history. A foreclosure is reflected for 10 years, but a short sale is not shown on your creidt report. it will be be paid in full, settled or paid as negotiated.

Fifth is security clearances. You can lose a security clearance with a foreclosure. If you are a policeman, in the CIA, or the military a foreclosure can get you thrown out, and we have had clients in this position. A short sale will not affect a security clearance.

Sixth, employers have the right to check your credit. Think about it, you work with money as a cashier, an accountant, or with a mortage company, your employer has the right to terminate you, and often your emplyment contract with places like Wal-Mart will have that.

Seventh, you can get a deficiency judgement. In Oklahoma we are a deficinecy state. That means that a mortgage company can get a judgement against you and have your wages garnished. In a short sale, a deficiency properly negotiated is gone.

Eighth, in a short sale you bring a zero balance to closing. Once it is all said and done you have no money out and no past history to worry about. In fact, FHAhas a program that can pay for moving expenses.

In the next part we will deal with how do you qualify for a short sale, and what do you need to do to get it.

I have seen many comments about Twitter here on Active Rain, but the more i do webinars and the more out of state meetings i go to, I have come to realize that Twitter is the next big thing on the web, and it would be good to get into it now. Google has already won the search game so that one is over, but Facebook and Google are going after something more. It is to have the dominate platform of the 21th Century. But before you concede a two horse race, Twitter is moving up fast. I know Facebook has 20% of the world's population, but Twitter has gone up in usage 1298% in less than a year. This is a list of Twitter application sites recommended by Nicole and Reggie Nicolay:

Site 1. www.bit.ly.com. This is a great URL shortener site.

Site 2. www.tweetlater.com. This allows you to schedule Tweets in advance. Ever wonder how people find the time during the day to tweet? They don't, they schedule.

Site 3. www.tweetdeck.com. Twitter browser that can include other social media.

Site 4. www.tweetbeep.com. Monitors tweets for specific topics and names like Google alerts.

Site 5. www.topify.com. Turns tweets to emails so you can follow there.

Site 6. www.tweetmeme.com. Aggragates the hottest tweets.

Site 7. www.blip.fm.com. For the music minded who want to create their own radio station and tweet it.

Site 8. www.tweetboard.com. Puts a twitter aggragate feed forum on your website.

Site 9. www.bubbletweet.com. App that allows you to easily add video to your tweets.

Site 10. http://www.ibegin.com/labs/wp-lifestream/. WordPress plug in that is a Twitter aggragator for your WordPress blog.

One final thought. I was on a Domus Consulting webinar today. Patrick Kitano on today's call is a great believer in Twitter and I would recommend signing up for the training if you want more knowledge about social media, and Twitter specifically. One thing today stuck with me which was Google has been under reporting Tweets by anywhere from 500% to 1600%. Google is on a mission to work on the instant search for Twitter feeds. This means that a small group of Realtors who use Twitter, and get established now, are going to have incredible SEO potential when this opens up on Google, and that will be soon.

Deliver Happiness. Okay I spoiled the rest of the blog. Did you ever see two words more powerful than this when you are wanting brand your experience. Zappos has gone through a few mission statements but they have evloved to those two words. That could be the shortest but most effective blog post I could think of especially when we deal in service. But since I have a lot of blank space down below, let me fill in the highlights of the speech given by Alfred Lin, the Chairman, COO, and CFO of Zappos.

Point 1. He used a quote from Maya Angelou about service, "People may not remember what you said or did, but they will remember the way you made them feel".

Point 2. Decide to do this whatever it is you want to brand and market, and make the decision sooner rather than later. Figure out the value and culture. Most importantly, put everything into alignment, and then live the brand.

Point 3. Commit to transparancy. Be real and you have nothing to fear.

Point 4. Have a vision. Whatever you are thinking, think bigger. Use inspiration rather than motivation.

Point 5. Build relationships, not networking. Be interested rather than interesting.

Point 6. Build your team and make sure you balance it with the visionary, the artist, and the scientist.

Point 7. Think long term. If you want to get rich quick this won't work and those you try to work with will know it.

Point 8. be a part of something bigger than yourself.

At the end he said that if you want to tour Zappos email them at tours@zappos.com. They will pick you up at the airport or your hotel in Las Vegas at no charge. You may want to go there for the entertainment, the food, or the gambling, and that is okay. I am going to take a tour of this amazing company. Then I will see the shows.