Jimmy Mulhern

Short Sale Agents In Virginia - What Matters Most In A Short Sale?

Facing a foreclosure or move involving a home that is upside down is nothing to take lightly. Yet it has continued to amaze me the amount of listings that have been placed on the market with no real chance of closing. The sellers have no idea that whom they have trusted their Short Sale with is hurting their chances of success and avoiding foreclosure.

When our team decided to learn about the proper procedures in a Short Sale, we knew the daunting task that laid before us. Some agents were learning on the fly, and those who were committed continued to learn the proper way to list and sell Short Sales even though they had times of uncertainty. Our path was a little different - we created a system first to increase our clients opportunity to successfully navigate their Short Sale. We lost business because we were honest with our clients - I would rather tell you the truth then promise the world which I could not guarantee. That client listed their home with an agent promising a Short Sale solution and advertised themselves as a successful Short Sale Agent...yet the home still sits on the market one year later with no promises of a positive solution.

So what matters most? Our latest Short Sale Listing in Piedmont is priced at market value. The home is in good shape, we are not trying to con a buyer. Yet the first buyers that went through the home said they were looking at single family homes in this price range. The agent you choose has to market the home for market value! In this case, I have comps $35-$40k higher. Do you think the bank will accept an offer that is not even close to market value?

Some agents look at Short Sales as gravy listings. They get to place a sign in the yard which gives them an advertising opportunity while putting minimal work into listing the property. For example - there are 32 Short Sale listings in Gainesville. Only 15 of them have multiple pictures. The first thing buyers look for is homes with multiple pictures - over 80% will not visit the home without them! Yet these agents can not find the time to put in some extra photo's on the property?

Part of getting the listing approved from the bank is to show them that the home was marketed to the fullest.

When choosing your Short Sale Agent, make sure that they are just as committed to selling the home as you are. Otherwise, you may be wasting precious time that you do not have. Banks will come back two months after getting a contract if they feel that the home can sell for a higher price. Use an agent who knows what they are doing - use a CDPE agent to help solve your housing problems.

Jimmy Mulhern - CDPE

http://www.HowToAvoidForeclosureInVirginia.com

I wanted to address the common misconception of who qualifies for a short sale. Many homeowners think that a short sale is about people going into foreclosure or buying homes that they could not handle - that is very far from the truth. In fact, most people in a short sale situation now are the ones who could handle the storm, but the individuals who defaulted dragged the values down so low that the rest of us are left to clean up the damage. A short sale is simply a sale in which the mortgage outstanding is higher than the sales price on the home. A successful short sale must include these three key ingredients:

1. Financial Hardship - This is very broad and can be the result of many things. Our website has a list of all the acceptable forms of hardship, but the most common are job loss/transfer, divorce, adjustable mortgage, loss in wages, or illness/death of a spouse. Simply unhappy about your homes value is not acceptable.

2. Monthly Shortage - A bank or investor will not be too quick to accept your request to have your debt forgiven if they see that you are still showing a positive monthly inflow. If you are asking for a short sale but pulling in $1,000 more each month than your expenses, then why would the bank accept your short sale. However, if you have been transferred and now you have to find housing in your new job location, then you do not have extra money and thus would qualify.

3. Insolvency - Simply put, are your assets greater than your liabilities. Now most people are worried about their retirement and 401k - in most cases these are not counted in a short sale since most bankruptcy laws protect them from creditors. But if you have a significant amount of money saved or invested...even as a "Rainy Day" fund...then this is something that the bank will attach their debts to. Think about it this way, if you have $100,000 in the bank but are asking the investor to forgive $75,000 you owe them, how likely do you think they would do that?

Qualifying is the first step. Getting your home sold and in the proper hands is another. Before we list a short sale, our main priority is to make sure that you understand what is going to take place during the transaction. We have attorneys that we use to professionally negotiate on our clients short sales - this is part of our service that we offer to give our clients the best opportunity to successfully close their short sale. Make sure that you have that option at your disposal when you speak to an agent about a short sale.

If you are facing a short sale, make sure that you speak with an agent who can help you understand the process and has a system in place. Each short sale is unique, so even agents who have closed short sales can not guarantee that yours will close. What matters most is the package that is sent to the bank and how your sale is negotiated that gives you the best shot. Visit our website or give us a call for more information.

Jimmy Mulhern

http://www.HowToAvoidForeclosureInVirginia.com

I wish I had a crystal ball...

Things have started looking up in the real estate world. The numbers released on Thursday are a reflection of the value that buyers are seeing in the market. So the dreaded question was asked on an appointment this week - are we turning things around?

I have enough experience in this business to know that the question posed to me was a loaded question. My response was easy - if we can get 3-4 more months like this then I think we can say that a leveling off has begun. But what does the future hold?

First off - get used to the term short sale! It is not the ugly term that many make it out to be. Many of the homeowners in a short sale situation are there due to issues relating to their work, not bad loans on the home. Nothing about losing your job is positive, but some of the short sales deal with individuals being transferred out of the area. We also have started to get agents who understand who qualifies for a short sale and who does not.

The second trend I see coming is another price surge. There will be two factors that are going to have a major impact on this. First, people will not be willing to move as much since they owe more on their home than it is worth. I think you will see that only those who can move or are forced to move will be going on the market - makes sense - but when you factor in that the largest amount of homes sold were during the peak years and that homeowners who did not sell took out equity lines, you can see that a large amount of the market will be in no position to sell. The second factor that will force a price surge is simply going to be inflation. We can not keep spending money like we are and not expect inflation to be a factor in the future.

Another trend that I think will be coming soon is tighter restrictions on selling a home. By this I mean that you will see restrictions on Internet sites and their advertisements, regulation of Realtors, an increase in disclosures, and regulations on loans and seller contributions. This is above and beyond what has already been put into place.

There are many signs pointing to a regular housing market, which we all knew would come. If we can just get past the over-reacting that tends to take place when the going gets tough, then maybe we would not have the wild swings that we just went through for the past two years. Things are pointing up...we shall see what tomorrow brings!

Jimmy Mulhern

http://www.HomesInVirginia.net

This past week, we had three appointments with sellers looking to sell their home for less than what they owed. Each situation was unique - one involved a family being transferred out of the area, another a job loss, and the third was simply living in a home that was too small for the addition to the family that was coming. Short Sales come in all shapes and sizes. But the interesting aspect of each appointment was the expectations of the individual sellers. I have listed some interesting points that developed from these conversations and many others that we have had over the past couple months that you need to understand if you are facing the possibility of a short sale:

Assets vs. Liabilities: Not being able to make your mortgage payment due to a job loss is scary. At first glance, it seems like no issue to contact the bank and have them accept a shortage rather than foreclosing on the property. However, if you are showing a surplus in assets...such as significant stock holdings, cash on hand, or even another home that is paid in full...the bank looks at those as resources to pay the loan. Even in a situation where you do not have enough to cover the amount owed, the bank will look at cash on hand as a way to make ends meet until you are able to secure employment. I am not defending the banks, but please do not think it will be a cake walk if you are showing a significant positive in your assets over your liabilities.

Foreclosure is not a positive option: A short sale is a lot of work...but the damage a foreclosure does to your credit and psyche is far worse than the effort to try and sell your home short. A foreclosure can cause you to lose your job if you are required to hold a security clearance, and now more employers are checking credit history's during the hiring process. Also, on any future credit application, you will have to answer questions relating to a foreclosure. A short sale can avoid all the headaches down the road that may not seem too important right now.

Sometimes, you have to miss a payment: There are two schools of thought when it comes to paying the mortgage on a short sale property. One side of the equation says that you should never throw good money at bad money. The other says that if you stop making the payment then the foreclosure process starts and the deadline for resolving the problem shortens. If you have to miss a payment to keep afloat, then you have to miss a payment. The goal is to sell the home and the reason is because the mortgage can not be paid anymore. Do not waste money trying to save a sinking ship when the co-captain is not offering any assistance!

Market The Home To Be Sold: The latest short sale listing we put on the market last Friday is awesome. The owners worked very hard to get the home to look spotless. Their extra efforts mean that their home shows extremely well compared to other short sale properties in the area. It is important to make the buyer feel at ease during the process. You also need to have a full marketing effort from your agent. This means that they have to spend money...even though they may not end up with a closed transaction.

Document Everything: Be upfront and honest - the bank will follow the paper trail! The big boy word for this is Fraud - lying to the bank will cause the transaction to fall apart, and open yourself up to prosecution down the road. Your agents responsibility up front is to outline what you will need to present your case to the bank. If they do not have a detailed packet, find a new agent. There should be about 30-40 pages that will be sent off to the bank - that gives you an idea of what you should expect from your agent.

Exhaust every option first: Being transferred to another area is one type of short sale that is hard on a family. Your still employed, showing good incomes, but the home you are leaving is like a 50 lb weight hanging around your neck. Part of your short sale package should be a section on renting the property out and if that will still present a shortage. The bank will want to see that every effort has been made to find the best solution possible. It is your agents responsibility to make sure that due diligence is handled and that the bank understands this.

Short Sales are going to be the future of the real estate market for the next couple of years. This has nothing to do with the economy, or even the sub prime lending issues of the past. People will still need to move, and buyers will still be looking for homes. The most important action you can take is to make sure that your family is mentally prepared for the journey, and that your agent is professionally prepared to get the job done.

Jimmy Mulhern

Http://www.HowToAvoidForeclosureInVirginia.com

Http://www.HomesInVirginia.net

Short Sale Myths

The Internet is full of fact and fiction - each page offering contradictions and power statements. The lack of positive/correct information can be daunting for a homeowner facing the difficult decision of selling their home when they owe more than it is worth. We created a website to help answer questions that you or someone you know may have regarding a short sale. Visit http://www.HowToAvoidForeclosureInVirginia.com for in depth information on the short sale process and how you can give yourself the best odds of getting to the settlement table. Below are some myths about Short Sales. As always, feel free to add your comments and questions at the bottom.

Myth 1 - I have two mortgages...there is no way I can do a Short Sale.

WRONG. When the short sale process was just beginning, many people did not try a short sale if they had a second trust that was going to be shorted. After the huge wave of foreclosures, 2nd trust holders wised up. Now instead of foreclosing on a property and receiving $0, they have started to accept pennies on the dollar...which is better then getting nothing. In situations when the first is also going to be shorted, the 2nd will usually ask for a low dollar amount from the first or from the seller. Usually a repayment plan can be worked out that is very favorable to the seller.

Myth 2 - I should never accept a payment plan from the bank...they should forgive all my debt.

Let me tell you a story...seller gets his home sold as a short sale. Offer goes to the bank and finally gets to BPO time. First trust accepts the payoff...2nd trust comes back and asks for $10k to be paid over 5 years with a 5% interest rate. Seller says no way he wants to pay nothing...2nd rejects the sale, buyer walks away, home ends up in foreclosure. All over a $200 monthly payment in place of a $4,000 mortgage. If it makes sense, why would you not solve the problem with a simple solution like this?

Myth 3 - Pricing the home lower will create a buzz and build contracts to submit to the bank.

Most buyers are still of the mindset that they should not pay over asking price. Most short sales fall apart because the home was under priced and the bank wants the sale to be close to Fair Market Value. If you list the home for a fair price and prove to the bank that the home was "Seasoned" it increases the odds that the offer will be accepted.

Myth 4 - Short Sales do not get accepted.

At the end of last year, the numbers showed that about 10% of short sales were accepted. Since then, agents have started to learn what the banks are looking for, and banks have started to realize that a short sale is the best alternative in a foreclosure situation. Agents who have a plan and a system in place are having a huge success in getting their short sale accepted. In the right hands, a short sale can be presented to the bank as the only solution. Make sure that you contact a CDPE which is the industry designation for agents with specialized training for short sales.

Myth 5 - A Short Sale is embarrassing...a black cloud will be hovering over our house.

A Short Sale is a regular sale! There is nothing different in the way that you as a seller prepare to sell your home, and we as the agents list and market your home. We do not advertise our listings to the public as a Short Sale...what advantage does that bring to you? There are requirements to advertise in the remarks to agents that the home is a short sale, but that is only to help them counsel their clients on the process. Short Sales happen to people with good jobs making good money. It simply is a situation where you must sell and do not have the means to make up the difference. You should never feel or be made to feel embarrassed about the situation.

Myth 6 - Any agent can list a short sale.

Amazing that agents listed short sales for clients in trouble to learn on the fly. The fact of the matter is that most agents do not have a system or plan in place to list a short sale. To give you an example, our area of expertise is buying and selling property. We have a specific pre-listing system for short sales, and a tailored marketing plan that assists in the short sale being accepted. It basically gives the banks what they want to see in a home sale. We hire attorneys to represent our clients in negotiating the terms of the short sale - at no expense to you. That is their area of expertise. See it's not about us advertising that we successfully negotiated short sales...it's about giving our clients the best chance to move on.

Visit our website for more answers. If you or someone you know is looking for an experienced agent who can help, please give us a call. The worst thing you can do is avoid the problem and become another statistic.

Jimmy Mulhern

http://www.HomesInVirginia.net