Phillip Auguste Broker/Realtor

Three Simple Steps to Closing More Short Sales
Published on Tuesday, March 3, 2009, 10:34 PM Last Update: 6 day(s) ago by Scot Kenkel
Tags: Foreclosures Short Sales Listings Agent Training Default Mortgages Stimulus Package

Darn, not another Short Sale!

As you sit listening to the too familiar recording on the other end of the line....you hear one more time... Thanks for calling. Federal law requires that we inform you that we are a debt collector. Please enter the loan number you are calling about. You press the number in one more time. "How many times have I entered these numbers?" you ask yourself. 50 – 75 times and how much closer are you to getting this deal done.

A page comes through the office intercom. Oh no it’s for you. Mrs. Smith is on line one and you know it’s your panic stricken sellers desperately looking for a nugget of hope on the progress of the sale of their home. You look at the blinking line on hold and your stomach starts to tighten and you feel a little sick. Do you hang up after your 10 minute hold or take the call. You know they are calling to remind you the auction is only three weeks away, and they want to make sure you are doing everything you can to get this sale closed so they don’t end up with a big fat F on their credit rating.

You decide to stay on hold. You don’t want to start the wait time over again. As your ‘On-Hold’ session with the lender’s Loss Mitigation Department continues, you start thinking through all the steps you’ve taken to help these folks get their home sold. You start wondering where you might have gone wrong. Even though you’ve done everything the lender has asked of you you’re left wondering if you missed something. Why has this become such a painful experience? There has to be a better way to get the lender to approve this deal. There just has to be!!

Every day there are thousands of hard working, dedicated real estate agents, just like you, that are feeling the same frustrations with their Short Sales. At the same time though, there’s probably an equal number of agents that have taken the time to jump in and learn how to master the process. Like any other niche market, Short Sales have their very own idiosyncrasies, but they can be profitable and rewarding once you understand the basics.

By following these three simple steps you’ll not only close more of your Short Sales but you’ll also find the process a lot more rewarding both professionally and financially.

STEP ONE: PROVE to the Lender that your Sellers are DESERVING of a Short Payoff.
Convincing a lender that your sellers, their borrowers, are deserving of a Short Payoff is similar to proving credit worthiness in reverse. First you’ll have to establish what catastrophic event took place in your seller’s lives that created their current financial hardship. This is commonly referred to as a ‘Hardship Letter’. The letter itself should chronicle the chain of events that led them to this point in their lives where they’re no longer able to meet their financial obligations.

You’ll also need to prove to the lender that your sellers have no other resources that they could tap into to pay their mortgage. Be sure to get copies of your seller’s previous tax returns, bank statements, recent pay stubs, a prepared financial statement, and any other collection letters, default notices or past due bills. Keep in mind that unless you prove your sellers are unable to pay their payments the lender will assume they’re able, but unwilling. If you believe your sellers are able and unwilling then you might want to rethink whether or not they’re deserving of your help.

STEP TWO: PROVE to the Lender that the Property is only WORTH what it sold for.
There’s a reason it’s called a Short Sale and not a Short Maybe. Lenders don’t deal in the world of make believe. They like facts, figures and proof. They like to know what is, not what might be. So don’t fall victim to one of the most common Loss Mitigation traps out there by asking the Lender what they’ll consider taking as a Short Sale. They might very well give you a number but what good will it do if the market doesn’t agree?

The best approach is this; prove what the house is really worth by simply getting it sold before you start dealing with the lender. Any property can be sold quickly if you know how to price it right. If it’s not sold it’s not priced right. Price it right and it’ll sell.

Then, once you’ve sold it you’ll need to justify the sale price with current, similarly distressed sales in the area. If it helps you’ll want to include a detailed repair list and an agent narrative explaining your local market conditions. There are a dozen ways to prove to a lender that the house won’t fetch a nickel more but understand this; if you don’t deliver the PROOF that it’s only worth what you’ve sold it for you won’t have a deal. No PROOF, no deal.

STEP THREE: PROVE to the Lender that you are COMPETENT in dealing with Short Sales.
Lenders don’t enjoy foreclosing on a defaulted borrower’s property; it’s messy, expensive, and time consuming. Because of the many legal and practical complexities, lenders will often create entirely separate Loss Mitigation departments to oversee this side of their operation. These Loss Mitigation departments are supposed to do everything possible to minimize the overall losses to the lender.

With the growing avalanche of defaulted mortgages over the past few years, along with the consolidation of so many failed banks, these Loss Mitigation departments are having a hard time keeping up with the growing demand. This has forced most lenders into a massive hiring and training initiative just to keep up. These loss mitigation reps tend to be modestly paid, modestly trained, overwhelmed and over worked and yet these are the same individuals that determine the financial fate of your seller.

The average loss mitigation rep has got two to three hundred other case files staring them in the face and every week they have to decide which ones to give attention to and which to ignore, or send to the back of the line. They are the gatekeeper to the files and they alone decide which ones move up the line and which get ignored. If you, the agent, come across as competent, appreciative, easy to work with, kind (I can’t stress this one enough) and considerate, you increase the odds that you’ll win. On the other hand if you come across as incompetent, your Short Sale will be sent to the back of the line. It’s just that simple.

The best way to prove you are competent is by NOT acting incompetent. Don’t make the mistake of calling the lender and asking if they DO short sales. Do this and you’ll definitely be added to their ever growing list of agents to avoid. Don’t say or ask questions that’ll tip them off that you don’t know what you’re doing or your deal will likely go to the end of the line. And don’t make the most common mistake of sending the requested documents one at a time; it drives them crazy. Take the time necessary and put an ENTIRE Short Sale Packet together. Include anything and everything you can to make the loss mitigation rep’s job a little easier. If not you risk going to the back of the line.

Keep in mind that the lender’s Loss Mitigation representative is looking for any excuse to kick your deal to the back of the line, so don’t give them a reason to do that. Be the professional you’ve always been and focus your energy on helping your sellers the best way possible by getting this deal closed. As long as you’re able to prove your sellers are deserving, the house has sold for the most anyone could ever expect to sell it for, and you’re a competent agent looking out for your seller’s best interest, there’s no reason you won’t be able to get your next Short Sale Listing closed.

Scot Kenkel delivers high impact training programs for agents interested in growing their businesses without going broke

Phillip Auguste’s Newsletter Information

The Charlotte community has seen all the national and local news about the mortgage crisis. The housing landscape has changed, but that is not necessarily a bad thing. Will you need a down payment or find down payment assistance? Yes. Should you look for housing within your means? Yes. Should you educate yourself on all aspects of a housing purchase? Absolutely.

Amid the challenges in the current market, let me be just as quick to remind you there are many, positives to owning real estate, especially in the Charlotte marketplace.

For one home prices have fallen slightly. That impacts your ability to afford a home. According to the Case-Shiller Home Price Index, home values in Charlotte have dropped two percentage points since June 2007. Compare to the 52 -points drop in Las Vegas or the 45- point drop in Atlanta. We’re doing pretty well.

Although homes values in Charlotte have not seen a precipitous drop, buying a home today can still be a dream come true. Housing is an asset that can be passed along to your heirs. If you rent, you know your payments do not have the potential to create equity in the property, to say nothing of the potential tax benefits (consult your tax advisor) and pride-of ownership pluses to homeownership.

I’m a Real Estate Broker/Realtor in Charlotte NC and I service the Charlotte Metro areas, surrounding counties, and South Carolina. I will be the first to tell you the housing landscape has changed, but for educated home buyers, the current shift in housing prices and increased local home inventory could present a very attractive home ownership opportunity-right now!

For more information or to contact me, visit my website at http://www.PhillipAugusteRealtor.com. Start your journey to homeownership by contacting me so I can assist you with locating a lender www.allentatemortgage.com which is the first step to finding out how much you qualify for.



Phillip Auguste
Broker/Realtor Licensed in NC&SC
www.PhillipAugusteRealtor.

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Right time to BUY and to SELL. How can this be?
Yes. Due to the perfect storm in the Charlotte market, it is indeed the right time for Buyers to purchase and Sellers to sell. This is a great time for buyers to purchase a home. Low mortgage rates. Large inventories of nice homes. And dropping prices. Some of you may say, I'll wait a little longer till the bottom of the market. The problem with this is you won't know the bottom of the market and when it turns to the upside, there will be so many buyers in the market, all of people just like you waiting on the sidelines, that pour into the market and prices will move quickly upward. So I suggest you take advantage of the significant leverage that buyers have in the market place right now and don't wait. Also, mortgage rates are tending to move upward, which quickly reduces the amount of home you can afford, sometimes more than any savings on lower prices.

Sellers, unfortunately, prices in Charlotte, and around the country are expected to continue to fall into next year. If you are concerned about maximizing your sales price, you should consider selling now at a realistic price and taking advantage of the opportunities to save on the buying side of the transaction. Prices are expected to fall because, even though Charlotte escaped the sub_prime mess relatively good, the next wave of foreclosures will not. Many homebuyers purchased with exotic adjustable rate loans that will be resetting soon and they will be unable to afford the increase in payments. When you have to sell your home against a forced sale, you will not win.

We will come out of this downturn, slowly, but surely. I suggest if you are wanting to sell to move up or down, really think about doing it sooner, rather than later. Buyers, there is no excuse not to be looking in this market. You will not see this opportunity again in the immediate future. Don't be saying WOULDA COULDA SHOULDA when you miss out.

Published Monday, November 3, 2008 2:57 PM by Phillip Auguste

Who Can Refinance Mortgages Now


If you have a job, and you've maintained a good credit score, the time is coming when you may want to talk to your lender about refinancing.

First, for those who have adjustable rate mortgages (ARMs) tied to United States Treasuries, your ARM may reset lower than where it is now, perhaps even in the 4.5 percent range. (Yes, you read that right -- around 4 percent.) How could this happen? If one year Treasuries are at 1.5 percent, and you have a 3 percent margin attached to your loan, that adds up to a 4.5 percent interest rate.

If you have an ARM tied to LIBOR or some form of interest-only loan, some lenders are offering to lock in adjusting rates for a small fee of $250 for the life of the loan, or even the next 5 years. Find out when and at what interest rate your loan will adjust and then see what it would cost you to convert your ARM to a fixed-rate loan. This could be a great deal, especially if you're sick of not sleeping at night.

In other news: HSBC -- North America is expanding a program with Money Management International (MMI), one of the nation's largest nonprofit credit counseling agencies, that will give homeowners who have had a temporary financial setback up to $7,500. The program, Preserving Homeownership and Savings Education Strategy (PHASES) program, provides financial counseling along with cash to help homeowners get caught up on their mortgage payments. Funds might be limited and not everybody will qualify, but at least it's a help for those who qualify and can enter the program.

The MMI PHASES program is currently available to homeowners in Arizona, California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio, Pennsylvania, Texas, and Virginia. To find out if you qualify and if the program is open call toll-free 888-589-6959