Life After foreclosure

Thursday, August 20th, 2009 | Uncategorized | No Comments

Something a little different for this blog: What happens to families after they’ve experienced foreclosure?

“They told me they would pray for me. That’s an exact quote,” she says.

http://money.cnn.com/galleries/2009/real_estate/0908/gallery.Life_after_foreclosure/index.html?ref=patrick.net

Follow-Up for Perfect Sales

Wednesday, August 19th, 2009 | Uncategorized | No Comments

Once a transaction is agreed upon and pushed forth with all the necessary paperwork, stay in contact with them. Ask them if everything is going well. Keep in touch. So, they stay at ease knowing you’re on top of things and don’t regret closing the deal with you and not someone else. Most clients will agree to writing up a testimonial for you. So, ask them if they would like to do so. Also, it won’t hurt to ask if they’d like to be used as a referral. Make sure to get them to sign off on you being permitted to use their testimonial in the market, too.

If you didn’t close a deal, however: follow-up. Call or leave a message once a week for the first month after failing to settle a deal. During that same first month you can also send two handwritten letters. They are more personal and appreciated when the time is taken to handwrite them. Follow -ups can be the source of over thirty percent of your income. If nothing is agreed upon that first month, keep sending something in the mail once a month.

Show a personal connection when you’re following up. People don’t tend to do business with people they dislike. Show them that you remember them personally. Go to their place in person without an appointment or anything to show them an article or something else of significance that has a connection to them. Start targeting hot buttons again, reignite the idea of your offer. Always expect to close a deal.

At the end of it all if they still don’t agree to a deal with you, you can still ask them for a testimonial. It’s always a good idea to ask for a testimonial.  Just because they decided not to go through with your offer doesn’t mean they didn’t like you or didn’t recognize your professionalism. The more you have, they better you have it.

Find Foreclosures Free With Google Maps

Tuesday, August 18th, 2009 | Uncategorized | 1 Comment

Find Foreclosures Free With Google Maps

If you haven’t found this tool, it is a must for locating foreclosures in your neighborhood. It’s very simple to use:??1) Type in your city and zip code ?2) Hit the “search options” link ?3) Scroll down where it says “All Results” ?4) Select “Real Estate” from the type of maps ?5) Hit search??POOF! all of the listed Notice of Defaults (NODs), Trust Deed Sales (TDSs), and Bank Real Estate Owned (REOs) are there for you to see. It will give you the address and the amount due on each property.

This is an excellent way to monitor your neighborhood, as Alt-A and Prime loans default, accelerating foreclosures. It will be interesting to see if the banks begin releasing some of their shadow inventory, before taking on more foreclosures.

The Vegas Way Out

Tuesday, August 18th, 2009 | Uncategorized | No Comments

Yet another indication of how stress will affect social norms.  As more and more houses lose value,  homeowners, realizing that they will never catch up, are simply walking away.

http://www.lasvegassun.com/news/2009/aug/10/vegas-way-out/

• Las Vegas homeowners are more likely than those elsewhere to walk away from their mortgages even though they can afford them, according to a study by two Chicago-area universities. The reason: Las Vegas — where 81 percent of homes are worth less than their mortgages based on the latest figures — leads the nation in the rate of foreclosures. And the decision to default on a mortgage can be contagious. The more it occurs, the more acceptable it becomes.

Close the Deal

Monday, August 17th, 2009 | Uncategorized | No Comments

Review each section of the contract ahead of time, and then prepare a clear summary of each section. This is vital for a successful close. You don’t want them to back out because of a typo or a section they don’t fully understand. Everything should be explained with a smooth, calm tone. Also, don’t skip any paragraphs. This might cause them to become unnecessarily suspicious.

One of the sections in the contract will be about what all is included concerning what you’re buying as far as contents of the house. You will probably have a list of appliances and other things you’ve encompassed in buying the house. Read through everything you’ve included in this section with them as if you were reading the morning newspaper. Keeping your tone mundane will help notify them that everything you are including in the contract is customary to include when buying a house. If they don’t object as you’re going over this part, then they are letting all of these items be included in your purchase. If they protest including any of these items, slightly flinch with minor shock and explain to them that these sales normally include such items, therefore you just assumed. If they don’t give in, you can always have them reduce your buying price a bit.

After carefully going through all of the details in the contract, give them a pen. Show them where to sign, and then wait. Do not say a word until they have signed the contract, unless they make an objection. It could feel like an eternal forty seconds. You’ll be enticed to cut through the tension, but don’t. Just wait.

Once they have finally signed, take a bit of time to make sure they know everything that will be happening next and when you are going to get in touch with them. Keep them informed. You don’t want to leave any room for doubt in their mind about what just occurred. Otherwise, they may find a reason to back out.

They’ve Agreed On A Price, What Next?

Thursday, August 13th, 2009 | Uncategorized | No Comments

Here you give the homeowner their options on selling to you. In many cases, you’ll want to take over their payments on financing. They might be hesitant about that, so be ready to help them overcome their doubts about you. You really shouldn’t have a hard time with this, though; if you handled your presentation well by establishing a trusting business relationship, targeting their emotional hot buttons, and providing necessary proof of credibility.

Describe to them why it’s in both your and their best interest for you to take over their payments. Explain the difference between owner-occupied financing options and non-owner occupied financing options. This helps keep the professional trust established and gives them peace of mind due to fully understanding the details of the contract.

Don’t hurry through the closing process. Keep the pace you’ve had throughout your entire presentation. Go over the contract with them, explaining everything that affects them thoroughly. Rushing through the closing to get them to sign off on the deal is sloppy and could scare them away.

Your professionalism, preparation, and presentation are crucial. The more proficient you are through those first steps, the better off you are when it comes time for closing the deal.

Home sellers frustrated as short-sale deals collapse

Tuesday, August 11th, 2009 | Uncategorized | No Comments

8/5/2009 2:17 PM
By Stephanie Armour, USA TODAY
http://m.usatoday.com/home/614019/full/;jsessionid=FF66A4C5571B70CBBCE6F823B6D8FCD9.wap1

Home sellers frustrated as short-sale deals collapse

Scores of homeowners who thought they’d cut a deal with their banks to sell their houses for less than their unpaid mortgages are seeing those agreements fall apart months later, contributing to the mounting foreclosures that threaten the housing market’s recovery.

The sales of homes for less than the amount owed the bank, known as “short sales,” have been widely viewed as an alternative that could help slow the foreclosure epidemic. In theory, delinquent homeowners escape a mortgage they cannot afford, and lenders, although taking a loss, avoid the even costlier process of completing a foreclosure.

Instead, many homeowners are watching potential buyers walk away as months pass while they deal with lenders’ lengthy delays, lost documents and unreturned calls, according to the National Association of Realtors (NAR). Not all the snafus are lenders’ fault; inexperienced real estate agents who fail to turn in complete paperwork also are causing holdups, as are severely underpricedhomes.

The problems have become such a kink in the market’s recovery that banks and the federal government are launching new efforts this month to simplify and speed up the short-sale process.

Just 23% of short-sale offers that homeowners receive from potential buyers actually close, according to a February study of 1,300 real estate agents by Campbell Communications. More than 90% of agents cited a slow response from the lender as the reason short sales were lost.

“The delays are quite extensive and a real problem. It’s a serious issue,” says Mark Zandi of Moody’s Economy.com. “You’re seeing a lot of short sales go bust, and it’s contributing to the crisis because it’s one of the reasons foreclosures continue to mount.”

Jorge DeMattos, 45, just completed the short sale on his home in Pembroke Pines, Fla. a process he and his real estate agent, Edward Goldfarb, say took 17 months and eight separate offers.

DeMattos began pursuing a short sale after he was laid off two years ago and his income plunged from $46,000 to $26,000 a year.

Chase Bank, his mortgage servicer, rejected the first offer, which was $14,000 over what was then fair market value, according to Goldfarb.

On the next seven offers, the bank took months to respond. Each prospective buyer got tired of waiting and canceled the contract. The eighth offer, accepted in May, was $24,000 less than the first one that Chase rejected in February 2008, Goldfarb says.

“Chase made it very difficult. I had to stop paying the mortgage. It was so frustrating,” says DeMattos, who now lives with his sister in Kissimmee, Fla. “We would put the paperwork in, and they would never give a definite answer. Buyers waited for months.”

DeMattos says he owed $355,000 on his mortgage. The short-sale price was $225,000.

Christine Holevas, a Chase spokeswoman, says earlier offers on the home weren’t accepted because they were significantly below the appraised value and the homeowner didn’t send in updated financial information.

No longer uncommon

Short sales once were extremely rare. But now, with unemployment climbing and home values down, more homeowners are pursuing short sales when they can’t afford their mortgage. About 11% of all sales transactions in June are such short sales, according to the NAR.

Some delays stem from agents who fail to prepare buyers and sellers for the length of time it takes to get a short sale approved or who supply incomplete information to banks.

But many short sales are faltering, largely because some lenders may lack the internal staffing, expertise and systems to process such sales in a timely fashion. And short sales can be complex, especially if they involve home-equity lines of credit or other second liens held by different lenders, who also must agree to take less than the amount they’re owed from a home’s sale.

Several lenders acknowledge that banks have been part of the problem, in part because most have done so few short sales in the past that they’ve faced a steep learning curve.

“About half of short sales never close. We see it as a big lost opportunity, and we need to improve the rate we close them,” says David Sunlin, vice president in charge of short sales at Bank of America.

Uncompleted short sales that go to foreclosure are costlier for lenders and homeowners. For lenders, a short sale may save as much as 30% of the expense incurred by going to foreclosure.

For homeowners, a foreclosure wreaks longer-lasting damage to their credit records. A homeowner who has gone through a short sale typically can get a new home loan in one to three years, according to the NAR. A foreclosure usually means it takes seven.

Borrowers are expected to pay their mortgage during the short-sale process, but not all can afford to. That leads to abandoned properties that may sit vacant and deteriorate for months. In other cases, homeowners unable to make their payments may stay put and pay nothing, in some cases for up to a year, until the lenders’ review-and-approval process plays out.

Large numbers of uncompleted short sales are especially troublesome, because other efforts to stem foreclosures have been less effective than expected. The Obama administration’s housing rescue plan, which includes getting banks to rework home loans into more affordable mortgages, has made such slow progress that representatives from 25 major mortgage servicers were called to Washington, D.C., last month to discuss improving the efforts.

Short sales are moving into the national spotlight now as:

Mortgage servicers ramp up their programs. Bank of America has begun trying to slash the turnaround time on short sales from up to 90 days after a buyer submits an application to just a week. In a typical short sale, a buyer makes an offer, then the bank conducts appraisals to determine the price it will accept. Setting that price can take so long that would-be buyers may walk away. To try to avoid such delays, Bank of America has begun doing appraisals and determining a minimum price it will accept before a home goes up for sale.

Meanwhile, Wells Fargo has created a real estate agent education guide that explains the process, has increased staffing and has set up procedures to handle short-sale requests and explain the process to homeowners. The bank says it has cut its average turnaround time from offer to approval from up to 90 days to about 30.

The U.S. government is getting more involved. The Treasury Department soon will detail a plan to streamline short sales by providing standardized documentation and cash incentives to lenders and a moving allowance to homeowners.

Treasury has said that servicers have opted to pursue foreclosures instead of short sales because of the complexity and time required to complete the discounted home sales.

Borrowers who complete a short sale will be eligible for $1,500 to help with relocation expenses. Second-lien holders will get up to $1,000 to relinquish their claims in such transactions.

Eligible homeowners can be accepted through Dec. 31, 2012, but the short-sale program is for those unable to get mortgage modifications from their banks.

“We realized we couldn’t reach everyone with a modification. For us, that wasn’t the end of the story,” says Michael Barr, Treasury assistant secretary for financial institutions. “The alternative is to significantly speed up short sales.”

No authoritative figures on short sales’ completion times are available, but some research indicates the problem is worsening.

A survey in March 2008 by Campbell Communications found that the average time for a mortgage servicer to respond to an offer to buy a short-sale property was 4.5 weeks. Campbell’s follow-up survey in February found that the average response time had doubled to nine weeks.

A third survey in June found the response time was 9.5 weeks. The surveys were sponsored by Inside Mortgage Finance, an industry publication.

“The foot-dragging means it’s taking six weeks to six months,” says Lawrence Yun, chief economist with the NAR. “There are big delays. The review process is taking way too long.”

‘We had a learning curve’

Lenders say the approval process takes time because there are so many parties involved. Some bank officials say they’ve been learning as they go.

“We had a learning curve,” says David Knight, senior vice president for Default Retention Operations, Wells Fargo Home Mortgage. “Any stakeholder has a right to disapprove the sale. Realtors out there were used to regular sales. Now, all of a sudden, the servicer and Realtor have had to learn a lot.”

Some real estate groups also are trying to improve the process. Re/Max International Chairman David Liniger says his company is aggressively working to train agents on handling short sales and other so-called distressed properties. Instead of eight weeks to close a short sale, trained agents can get them done in two to four weeks, he says.

Within the real estate industry, hopes are rising that short sales will become a shorter process.

“It’s horrible the amount of time it’s taking to do these sales,” says Valerie Torelli, who owns Torelli Realty in Costa Mesa, Calif. “It happens all the time that short sales fail and then go to foreclosure. A seller doesn’t make payments for a year and then just walks away. It’s unbelievable.”

Ensure A Successful Presentation

Monday, August 10th, 2009 | Uncategorized | No Comments

When you’re quite certain you’ve discovered their hot button (underlying emotional reason for selling), keep your focus on it. Target it ten, twenty, thirty times during your presentation to rouse it effectively.

Create a business relationship with them. You aren’t trying to date them or anything, but you do want to establish a relational repertoire. Taking a few minutes to have some small talk with them gets them to talk about themselves a bit, which does two things for you: helps you identify their hot button and breaks the ice, so they are more comfortable with you. Compliment them. Everyone likes to be complemented, but be sincere about it when you do. People can often sense insincerity when it comes to that sort of thing. Listen attentively during the little ice-breaking chat, and keep your comments and answers short when you’re doing the talking. You don’t want to bore them to death by listening to you go on about something completely insignificant to them.

Make an offer, promising them that you aren’t a wasting their time. You could say something along the lines of: “By the time we’re through, I will buy your house or I’ll help you find a better answer. Fair?”

When you’re seeing the house, don’t point out the defects. Statements indicating defects are often perceived as an attack and will make your prospect feel insulted. Questions are less aggressive, so ask instead of making a statement. For example instead of saying “There’s a leak,” ask “Have you had anyone take a look at this?”

The more you know about them, the better you can target their hot buttons. So, let them know that the better you understand them, the better you can assist them. Employment is a big hot button too. Ask them questions like where they work, whether they work, whether they stay at home, if work full time or work part time, and such. It is what they spend most of their days doing, after all.

Most importantly, just stay relaxed and focused. You don’t want to intimidate them by being too forceful. Explain all of the transaction costs in a way they will clearly understand, before stating your offer. Let them use a calculator and do the math themselves, so they know you’re not cheating them out of their money. This all will prove to them that you’re the reliable professional that you say you are and that you’re their top choice to seal the deal with.

Gross vs. Net: 4 Basic Home Selling Costs

Friday, August 7th, 2009 | Uncategorized | No Comments

When speaking to a client trying to negotiate a closing price, sometimes they may have an inflated idea of the value of the home placed there by a Realtor. Do show them all the Market information on the property, but that alone may not be proof enough for them. You must know how to explain gross vs. net to them, so they can understand the true value of their home. There are four main costs when it comes to selling property, regardless of whether it is sold to you or through a Realtor.
The first is the Marketing Costs. Realtors normally charge six to seven percent commission for selling the property. Most of that goes to marketing and other ways of getting the property noticed by potentials. So, this will have to be factored into the total cost no matter what, if want their home to sell at all. The primary reason for properties that are listed without a Realtor that fail to sell is poor marketing.
The second factor is Buyer Discounts. Buyers hardly ever pay full price when they settle on a transaction. So, have real estate data from the local area with average ranges of listing and asking prices prepared to show them. Then, have them deduct the average spread percentage from their asking price.
The third of the four main property selling costs is Closing Cost. These may differ from place to place. Show your seller proof of the closing costs in their area and have them subtract that percentage from their asking price, as well, because you will be taking care of all of those closing costs for them.
Finally, the fourth cost is repairs. Waiting months for them to pay and get these completed is in no one’s best interest and is a waste of time. The best thing to do is for you to handle them. The repairs will have to be paid for no matter what. You can have it done for them in a much more timely manner, which is a convenience for them because then they don’t have to deal with it and is a convenience for you because you don’t have to wait all that time for them to get it done . Just have them subtract deferred maintenance costs from their selling price, so that you can pay for the fixes.
Explaining these costs to them will help them understand that it doesn’t matter who sells their house because it will still end up costing the same either way. Also, you’re saving them their potentially highest costs, holding costs. If it takes a realtor nine months to sell the property that’s nine more months of utility, mortgage, taxes, insurance, and such that they would have to keep paying as holding costs.

Real Estate Presentation: Bring It

Thursday, August 6th, 2009 | Uncategorized | No Comments

Bringing out your personality in a presentation is a must – or you’ll just end up sounding boring and robotic – but you don’t want to completely rely on the sheer strength or charm of your personality to seal the deal. Pros practice and prepare. Try saying that ten times, fast. To impress a potential with your true professionalism, you really must practice and prepare, though.

The first step to take in your presentation is to discover your client’s hot button using the “Identify, Agitate, and Solve” technique (tip: money’s never emotional, so don’t focus on it – it won’t help you seal the deal).

You’re presentation should last at least an hour and a half. Don’t close early just because the seller wants you to hurry up. You need all of that precious time to identify their emotional hot buttons, agitate those buttons, and then provide them with your solution.

If you were to allow your presentation less time, you would be unable to carefully craft a compelling presentation targeting their emotional benefits. Taking all the time you need also decreases the chances of a seller feeling buyers’ remorse because it gives the meeting a sense of elevated importance when you take the time to explain everything they need to know in detail.