How Many Short Sales Are There?

A question I get asked very often is “how many Short Sales are there?” Maybe a better question is how many Short Sales should there be?

We could answer the second question in several ways. But first lets talk about how many Short Sales are happening at this time. Unfortunately there doesn’t seem to be anyone trying to come up with any factual information on the subject. This is no doubt due to the difficulty of trying to compile the actual numbers. Think about it, the only way we could get accurate information would be to get an actual number of Short Sales from each and every lender no matter how big or small they are. That would be a tough task by itself. But then we would need to try to figure out how many of those the lender was in second (or third) position so we don’t end up counting the same Short Sale more than once.

I suppose it could be done, but to this point nobody is doing it as far as I can tell. We do know that the NAR in the spring of 2008 said that 18% of all sales nationally required a Short Sale. How they compiled that information I don’t know. But I haven’t seen them (or anyone else) come out with any statistics since then.

It is pretty obvious though that Short Sales are occurring far more frequently now than they were then. How can we confidently say that? One way is to look at MLS listings, we see listings much more frequently stating that they are Short Sales than we did early last year. Another way to tell is by dealing with the Loss Mitigation departments of the different lenders. Even though many of them have expanded their departments greatly to handle the influx of Short Sale offers, they are still swamped. The truth is that the evidence that there are more Short Sales now than ever before is everywhere around us, all we have to do is look.

If I had to guess how many Short Sales there are I would put the number somewhere around 20-25% of all sales nationally. Admittedly that is more of a guess than it is based on any concrete data. But it is the best that I’ve got at this point.

Of course some areas have a much higher percentage, and some a much lower percentage. It is not unusual for me to talk to a broker in Florida who tells me that over half of their listings are Short Sale listings. While in my Midwestern university town the number is probably a bit less than 10% of all sales.

But maybe the question we should ask is how many Short Sales should there be?

Wouldn’t it be true that almost every home that is foreclosed on could have been sold as a Short Sale? Not every one certainly, but probably 90 – 95% of them could have – and should have been.

Homeowners do Short Sales because most every time they are better off doing it. And lenders do Short Sales simply because they know that they will lose less money than if the home goes through foreclosure. So virtually every foreclosure could have and should have been a Short Sale.

In most any area that means there is potential for at least 10% more Short Sales than are currently happening, and in some areas with high foreclosure rates it could easily be a lot higher percentage than that. As agents and the public in general become more and more aware of Short Sales we will likely see many of the people who are now going through foreclosure taking advantage of the opportunity to so a Short Sale instead.

So the number of Short Sales is growing, and has the potential to grow considerably. In fact RealtyTrac a few months ago said that they expected Short Sales to be required in 50% of all sales nationally by the end of 2009! Now that number sounds rather high to me, I don’t really expect we will see anything close to that. But there is no doubt that for years to come Short Sale will be a significant part of the real estate market.

So agents who are interested in handling Short Sales, and who are good at it will very likely be quite successful over the next several years. Those agents who shy away from Short Sales will be fighting over an increasingly smaller part of the market.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Marketing for Short Sale Listings – Part #6

So we’ve talked about quite a few free ways to find Short Sale listings, but lets mention one more.

Free classified listings can also be a source of finding Short Sale listings. Free classified listings are all over the place. Craigslist would be one that most people have heard of. One of the good things about Craigslist is that most communities have their own page, and pages are being added for smaller and smaller communities all the time.

Another would be Backpage.com which is much like Craigslist though it has fewer cities, sticking to mostly larger cities, though they are adding cities all the time.

There are smaller classified services that are not national, but do have ads by local such as AmmericanClassifieds.com.

If you look around on the internet you will find many more free classified ad listings. But you do want to find ones where you can place ads for your local area, not just national listings for obvious reasons.

There are also many local newspapers that have free classified listing, be on the lookout for those.

Some people might wonder why these classified listings would be of value. They may think that if someone needs a Short Sale why would they be looking in the classifieds. Often when someone has a problem they may look to see what other homes are selling for. If they see your ad and it tells them how you could help them in their situation they are very likely to give you a call. Or someone looking may know someone who needs help and refer them to you.

If you can find 2-3 good free classified listings in your area, for a few minutes of time you’ll have one more way for people to find you who need your help. Don’t overlook the power of this type of advertising.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Marketing for Short Sale Listings – Part #5

In the preceding articles on marketing for Short Sale listings we’ve talked about several free ways to find these listings. Today I’ve got another one for you.

Expired listings are another source of Short Sale listings. Now I know that the sound of chasing expired listings won’t excite most Realtors. But in this case it is a little bit different.

When we see a listing that has been priced a little too high for the current market conditions, and the price was never lowered to help the property sell, and it has been vacant the whole time (or most of the time) it’s been on the market, it’s very likely that this property is a short sale listing waiting to happen. It’s also very likely that the agent that had the property listed previously does not understand how to handle a Short Sale.

When you start becoming familiar with the Short Sale world these properties will start to stick out to you like a sore thumb. When you see these listings make a note to yourself. Then when you see the listing expire you can either contact the homeowner or the listing agent.

The homeowner will likely be glad to hear you can help.

The list agent may be happy to hear from you also. At this point they are very likely sick of this listing, feeling that there is no way they will ever make anything from this one. If you offer them a small referral fee they may be thrilled for you to take over the listing. Now of course you’ll want any referral fee to be very small since you’ll have a little extra work to do on a short sale listing. But remember the other agent has likely given up on this listing and will probably be fine to get something, anything out of this listing. They may even refer future Short Sale listings to you.

Stay tuned, I will have some more marketing ideas soon.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Fannie Mae Stops Cutting Realtors Short Sale Commissions

Holy cow! Some sanity from Fannie Mae! What’s the world coming too? Is this a first?

It has always been my belief that lenders are shooting themselves in the foot when they cut Realtor commissions. This simply makes handling Short Sale listings MUCH less desirable for agents. After all there is more work to do on a Short Sale listing. While it isn’t a lot of extra work for an agent that really knows how to handle a Short Sale, it is extra work. But to then have the commission cut! Not very desirable.

So lenders have created a situation the doubly insures that many agents will not want to take Short Sale listings. But lenders need Realtors help to get these properties sold, or the lenders will lose more money when the homes eventually go through foreclosure.

So we might say that lenders are being “Penny wise and pound foolish” when they try to cut Realtors commissions.

But Fannie Mae seems to have come to realize this. They have just created a new guideline that states:

No Negotiation of Preforeclosure Sales Commission
Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers
Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a
reduction of the total commission to be paid to real estate agents to a level below what was
negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales
price of the property in aggregate. Servicers are reminded that they must continue to obtain
any approvals that may be required by interested third parties in connection with preforeclosure
sales.

You can find the whole document if you want at https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0903.pdf. You really don’t need to bother checking it out since most of the document is about other things and I’ve posted the only relevant part.

So what Fannie is saying is that the lender cannot arbitrarily cut the commission below 6% just as a policy. Now they still probably can ask for the commission to be cut to try to make the Short Sale offer fit within the discounting guidelines. But if the offer fits within the guidelines the servicer of the Fannie backed loan cannot cut the commission.

This is certainly a step in the right direction. We can only hope that Freddie Mac and FHA will follow. If they do, then other lenders may start to think about why this makes sense and follow along with this policy also.

Still we can’t hold our breath and wait for this to happen, it may, but it may not.

The truth is that when a lender asks to cut the commission it is often nothing more than a bargaining position. If we resist the attempt to cut the commission, most of the time the lender will back down. So for those who become skilled at negotiating with the lenders, the commission won’t be cut very often anyway. But of course there is an art to this.

But Fannie Mae has certainly taken a step in the right direction here. Simply put, the lenders need the help of Realtors to get out of the mess that they have gotten themselves into. Cutting commissions is not the way to encourage that help. So lets hope that Fannie has seen the light, and that other lenders will follow suit.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Marketing for Short Sale Listings – Part #4

In previous posts we’ve talked about a few free ways to get Short Sale listings coming your way. Today I have one more for you.

Most agents know a few investors. If you don’t, they are easy to find, just ask around, or look for their signs. But what do investors have to do with finding Short Sale listings? Well investors can help you in several ways.

First of all, many of the investors that flip properties are actively looking for people in distressed situations. You may see signs around from lots of these, you know the “We Buy Houses” type of signs, and other similar signs. Of course all flippers don’t put signs out, some mail directly to people facing foreclosure or other hardship situations.

Some of these investors don’t do Short Sales, but some do. If they don’t do Short Sales they will be looking for people who have equity in their home, and if there is no equity, the flipper won’t pursue that property. But they have a valuable lead for you. Let them know that you can help those homeowners, and if appropriate, offer the investor a small referral fee for the leads they are not going to pursue. If a referral fee is not appropriate, find some other perk or benefit you can give them. Keep reading, I do have a good idea for this later on.

Even if the investor does work Short Sales, they will find properties or situations that they are not interested in that would be good leads for you. So again let them know that you can help these homeowners, and offer some incentive for the investor to send these leads your way. Just three weeks ago I had a listing just handed to me in this way.

If you build a good relationship with one or two active flippers, you would be surprised how often this could pay off for you. But what if you had a relationship with three, four, or even more investors? You could find lots of Short Sale listings coming your way with just this one strategy.

But what is the investors incentive to work with us? As we’ve said you could offer them a small referral fee, and it would need to be small since you have to get paid for doing a Short Sale. But right now the investor is just throwing these leads away and getting nothing for them. Since they are paying for whatever marketing they are doing, it would be to their advantage to have some money coming in for these leads even if it is not a lot.

But in some states it may be illegal to give a referral fee, and even if it isn’t, wouldn’t it be great if there was something else we could do than pay a fee? Hmm… what could that be?

Well, maybe we could agree to list any properties they need to have listed, at a discounted rate. But wouldn’t that be just the same as giving them a fee? No because when they have a property to list, if they weren’t going to list with us anyway, now we have not paid a referral fee, and they have brought us further business. It’s sort of a double win for us, but also a win for them since they will be saving money on the listing.

We can also offer to let them be the first to know of any Short Sale listings we get, and they can make offers on these. Most of the time these offers will be to low to be accepted by the lender, but once in a while the investor will get a good buy, so it will work out well for them.

This can work out for our listing as well. We may get the property sold quickly if the offer is accepted. But even when the offer is turned down we have gone through the Short Sale process with the lender and know exactly what they will accept from future offers and can adjust our list price accordingly. If the investors offer comes in the first few days that we have the property listed, we probably won’t even be slowed down in the process. Knowing the exact right list price that we can list the property at could actually speed up how quickly we get the property sold in the end.

One nice thing about offers from investors for your Short Sale listings is that they aren’t going to be worried about how long it takes to close like a typical homeowner buyer would be.

I’m sure that some of you can think of other perks we could offer to investors to work with us. If you can, please leave your ideas as a comment to this post.

But as always, before you approach investors, make sure you really understand how to handle Short Sales. The last thing you want to do is lose their confidence so that they don’t send people to you anymore.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Marketing for Short Sale Listings – Part #3

In previous posts we’ve talked about a few free ways to get Short Sale listings coming your way. This time we’ll talk about a couple more ways that are also free.

What we’ve really been talking about so far is contacting people who would be in a position to regularly come into contact with people who would need a Short Sale done on their house. So we always want to be thinking who that would be, who would naturally come into contact with people who will need a Short Sale.

One of the next groups we would want to contact is Attorneys. Two specialties in particular should come to mind, real estate attorneys, and bankruptcy attorneys.

Real Estate Attorneys – When the homeowner bought their home they likely used an attorney, and that attorney is often going to be contacted by a homeowner when they get in trouble. They may simply be looking for advise, or they may be looking for a referral to a good bankruptcy attorney. Either way real estate attorneys will often be the first to know about a situation going bad.

So if you simply contact the real estate attorneys in your area and let them know that you are an expert with Short Sales, and that you can help anyone that needs a Short Sale, most likely you will find a listing or two coming your way every now and then.

As we talked about before in the previous post, don’t just make one contact with these attorneys and expect that’s all you need to do. Continue to follow up with them about once a month or so, just to keep yourself in their mind. You can do this by sending them something in the mail, or by email. If you know them well you may just want to call and have a good chat. But however you do it, stay in touch, and stay at the top of their mind.

Bankruptcy Attorneys – Now this is real fertile ground here! These attorneys will by definition consistently be coming into contact with people who are in trouble and need a way out of their situation. Some of these attorneys may handle the Short Sale themselves, but they still need to find a buyer. So again contact every attorney who specialized in this bankruptcies in your area, and let them know how you can help. They probably have already had an experience or two working with an agent who didn’t have a clue what they were doing, and it made the attorney’s work harder. So they will often be very receptive to you, if you can show them that you really understand the Short Sale process.

As before, stay in touch with these attorneys regularly so you are at the top of their mind when the need arises.

Now one thing you need to be aware of when you are working with attorneys. There will be a lot of them that are not really familiar with Short Sales, and don’t understand the benefit of doing a Short Sale for their clients. So you need to ready to explain the benefits of a Short Sale to them, why it is in the clients best interest. Handle this delicately, as you are probably aware some attorneys act as if they know everything, so tip toe lightly if you need to educate an attorney.

Both bankruptcy attorneys and real estate attorneys will be able to bring you a steady flow of Short Sale listings if you simply make the effort to let them know the that you can help, and that you know what your are doing. Also that you can help the client, and make the attorney’s life easier. But of course, make sure you do know what you are doing with Short Sales before you go telling attorneys that you do. Click the link at the end of this post if you need to learn how to properly and expertly handle Short Sales.

Well I thought I would get into the next group that can send us listings, but I’ve blown way past my 500 word target already. So group will have to wait for the next post. But stay tuned, the next one can be a very good source of listings.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Marketing for Short Sale Listings – Part #2

In part #1 on marketing for Short Sale listings we talked about a free way to get the word out, and start getting these listings coming your way. This time we’ll talk about another free and easy way to get Short Sale listings.

Most every Realtor knows several loan officers, and those officers can be a source of referrals for Short Sale listings. But why would they be a source of referrals? And what if they have another agent that they usually refer potential clients to?

When people get into trouble with their finances they often try to refinance their home to solve the situation. We all know that over the past several years lots of people have used the equity in their home to solve financial problems. Also people who are having trouble keeping up with their payments may have heard how low interest rates are right now and may want to try to refinance to a lower rate.

But we all know how much tighter the lenders standards are now than in the past. That means that often the loan officer will have to tell people who want to do a refinance that they can’t do it, that they don’t qualify. I’m sure that is no fun for the loan officer, it must be tough for them to have to say they can’t help the client. So don’t you think that rather than just turn that client out into the cold world on their own, that the loan officer would like to give them a recommendation for who they may want to talk to, who could help them?

If a person is in a situation where they can no longer afford the payments on their home, getting it sold as soon as possible through a short sale is likely the best thing they can do.

But the thing is that most loan officers don’t know much if anything about short sales, and they certainly don’t know who could help the client.

So all you need to do is give the loan officer a little bit of education about how a short sale could help some of the people that they cannot. Then of course let the officer know that you are the one to help those people.

While the loan officer may usually refer prospective clients to another agent that they know, in this situation you can position yourself as the expert that they need to refer the clients to. After all, the loan officers favorite agent probably doesn’t really know how, or even want to handle a short sale. And even if they do, what are the odds that they’ve bothered to talk to the officer about short sales?

So by positioning yourself as the short sale expert, you will very likely will get the referral when the loan officer can’t help a client who is in a bind. If you are able to help these people, and the loan officer likes working with you, you never know, you could even end up being the officers favorite agent to refer all their clients to.

Of course remember, if you just contact a loan officer once, you may well get some referrals. But it is far better to keep in contact, following up about once a month or so, just so they don’t forget.

So if you simply contact 4 to 6 loan officers that you know well about short sales, most likely you will get a listing from these contacts every once in a while. But what if you contacted 15 – 20 loan officers? What if you contacted every single one of them in your area? You can get as aggressive with this as you want. The more loan officers you get on your short sale finding team, the more short sale listings you’ll have.

But of course, make sure you are ready to handle the short sale listings before you get started marketing for them. The last thing you want to do is fail to help the first couple of clients sent your way. That would stop the flow of referrals dead in it’s tracks.

If you do no more than just this one strategy, and do it aggressively, you will likely find a nice flow of listings coming your way. Simply ask one loan officer what percentage of people seeking a refinance they can’t help, and you’ll get an idea of the potential of this.

I’ll have more marketing ideas soon, so check back in a day or two.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Short Sales – Should you Accept Multiple Offers?

I meant to be writing another post about marketing for Short Sales this morning, but I was on agentsonline.net and wrote a response on a thread that I thought would make a good post. So I’ll add the marketing article tomorrow.

The topic was about accepting multiple offers on a Short Sale and forwarding them all to the lender.

A previous poster had said that in his area “When submitting an offer to a seller, the buyer signs an addendum stating they are aware that the seller may accept other offers up to the point that the bank approves the short sale. I don’t believe these are back up offers, as they are accepted by the seller and submitted to the banks.” I responded:

It may be the custom for how people are handling short sales in your area, but it is not the law or anything like that. And it is a very bad custom – for everyone involved.

Not having seen the addendum that agents are using in your area I don’t know what “out” the buyer has in your addendum. But when I have seen this type of addendum in the past, the buyer usually has the right to walk away pretty much at any time. It’s usually that way for this type of addendum since the seller is not bound to this contract, the buyer usually isn’t either.

This type of situation is bad for everyone for several reasons.

First the buyer not having confidence that they are going to be able to buy the property will keep shopping, and may disappear. The loss mitigator knows this too.

Then it’s also bad for the listing agent. They continually have other agents, and potential buyers to deal with. They continue to have to field questions from the buyers agents about what’s going on, and continually have to deal with questions from agents who want to show the property. That makes the Short Sale listing a great big hassle.

Then, and really most importantly, the loss mitigator doesn’t like this approach either. Let’s remember – and this is a great big deal – the loss mitigator gets a bonus for a completed transaction! Why do we care about that? Simply because this simple fact gives us the leverage to rise to the top of his stack of 100 – 200 short sale packages on his desk. It also is the answer to why, if we send them a deal they don’t like, our package can sit around forever and gather dust.

So the loss mitigator by human nature is going to want to work on the deals that look most promising first, and the least promising last. Makes sense right? If you were in their shoes, wouldn’t you do the same?

So what the loss mitigator is looking for is a complete package, with everything he needs, a serious and committed buyer, a low BS factor, and an offer price that looks reasonable. If a package has these ingredients it will get fast attention. If not, well they’ll get to it sometime or another.

Now when you send an offer with the kind of addendum that you are talking about, just like agents know that this creates a lot of hassle, the loss mitigator knows that too. After all he’s worked on far more short sales than virtually any agent. He knows that this kind of thing leads to a package that never closes because the buyers walk before he can get it approved. And even if they don’t walk, this is still a package that he will have to spend more time on.

So there is no good reason to handle a short sale in this way.

Whether on the buying or selling side – we would never get involved in a short sale with this kind of addendum. We just won’t do it! Why would you want to? This isn’t an REO. We are not working for the lender!

We only work with a qualified (for the short sale situation) buyer, and one signed and completed contract. That is what is best for everyone. That is what will get approved the quickest.

Chris
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Marketing for Short Sale Listings – Part #1

So we have established that Short Sales offer a great opportunity for Realtors today. And we’ve also talked about why Short Sale listings are the most likely listing to close in today’s market. So if you see that short sales are a great opportunity for you, how can you find and get Short Sale listing?

As the title of this post implies, I’m going to break this into several posts. So you may want to check back every day or so to catch additional posts on this topic.

First you want to make sure that you really understand and know how to properly do Short Sales. If you don’t, you will soon find that you have a mess on your hands when you get several Short Sale listings. Short Sales can be very easy if you know what you’re doing, and a total pain if you don’t. If you know what you’re doing, virtually ever one of these listing will close. If you don’t know what you’re doing it can be a crap shoot.

If you need to learn how to handle Short Sales click on the link at the end of this post. There you will find the most complete and thorough guide for agents for handling Short Sales that you’ll find anywhere.

So assuming that you’re ready to handle Short Sales, and you have a complete understanding of how to be successful with them, the first thing you will want to do if you want Short Sale listings is let other agents know that you are interested in these types of listings. There are so many agents that want nothing to do with Short Sales, there are so many agents that would rather run from them. I

If you simply let other agents know you are interested in these listing there is a very good chance that other agents may just give you Short Sale listings. It may be a listing they have that is expiring, or they may hand you a prospect that needs a Short Sale and they don’t want to deal with it.

I’ve had quite a few listings given to me in this fashion. One agent had a cousin who needed a Short Sale, and this agent didn’t want to do it because she was afraid she might fail and end up hurting rather than helping her cousin. She may have even have been worried what other family members would say if she couldn’t get it done. She didn’t even ask for a referral fee.

So if another Realtor wants to give you a listing they may not even ask for a referral fee! That’s great! But if they do ask for a referral fee, you may want to agree to a small one. Tell them that it will have to be a small fee because of the extra time that Short Sales take, and that often lenders will try to cut the commission. They will likely understand and think that is reasonable, they’ve heard the horror stories, that’s why they don’t want to handle it themselves. Now they don’t need to know that you will only be spending an extra 3-4 hours on the Short Sale, they will likely think it will take more than that. And they don’t need to know that you can keep the lenders from cutting your commission most every time. That can be your secret. So bargain for as little a referral fee as you can.

The beauty of this method of finding Short Sale listings is that your market cost for this is absolutely nothing! It also doesn’t need to take any extra time. You can just bring it up any time you’re talking to other agents. But you can also be more aggressive if you want. You could make a call to other agents, you can also post on any bulletin boards your association has. No matter your approach, if you get the word out, you will likely find it will bring some listings.

I’m trying to keep my posts to about 500 words, and I’m already at 650, so that will be all for this post. But next time we’ll talk about another no cost way to get Short Sale listings.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

Why Short Sale Listings are the Most Likely Listings to Close?

Is it possible that Short Sale listing would be more likely to close than other listings? How could that be possible? After all you’ve heard all the Short Sale horror stories from other Realtors about how the lender took forever, the buyer walked out, and it was just a big waste of time, right? And maybe because of all that mess, after all the time the agent spent on the listing, the home ends up getting sold at foreclosure, so it never sold.

We’ll deal with those horror story concerns in a minute. But first lets look at why a Short Sale listing is more likely to close than a non Short Sale listing.

The reason is simple, the seller is motivated to sell! OK, maybe not every time we take a Short sale listing will the seller be motivated to sell, but probably 95% of the time they are. Most of the time when we have a Short Sale listing, the situation, for one reason or another, is just not working for the seller. For whatever reason that is, it is virtually almost always in their best interest to do a Short Sale than any other option they have. And because it is in their best interest to get the home sold via a Short Sale, they don’t care how much the home sells for!

So the seller is motivated to sell, and doesn’t care what the sale price is.

The sellers lender is also motivated to get the home sold. The lender does not want another REO property! They have way too many REO’s already.

If it didn’t matter to lenders whether or not they took the house back and had another REO they wouldn’t do Short Sales at all, and they wouldn’t be expanding their Short Sale departments as fast as they are. Lenders want to do Short Sales simply because they lose less money with a Short Sale than when they take the home back.

So the lender is motivated to sell, and while they do care at what price the home sells for, it only needs to be at a price that they believe is better than they would likely get if the took the home back as an REO.

Now lets contrast that with the typical non Short Sale listing. Is the seller motivated? Maybe. But motivated to the point that they don’t really care what the sale price is? Not very often. These sellers do tend to care what price they get for them home, and they tend to care a lot about that price.

Because of this fact, in a tough market, when they can’t get their price, these sellers tend not to sell.

So on the one hand we have the Short Sale listing where all parties definitely want the home sold, and the selling price is not a primary concern. On the other hand we have the non Short Sale listing where the selling price is usually a major concern, and if they don’t get their price they won’t sell. Which one of these is more likely to sell? Of course it will be the Short Sale listing, where the selling price is a secondary concern.

But then there is that one little detail, that tiny little detail of whether we can actually get the Short Sale done.

Most of the Short Sale horror stories you hear happen simply because the agent involved really didn’t know what they were doing. As an example, if a Short Sale takes longer than 60 days, it’s probably the agents fault – lenders just don’t take that long. If a buyer walks out after 30 days let’s say, we simply didn’t pre-qualify the buyer for the Short Sale situation, not to mention that we probably didn’t structure the contract appropriately for the Short Sale situation.

Most of the problems getting Short Sales closed come from agents having a little knowledge, but not a complete understanding of the Short Sale process.

The fact is that if we truly understand the Short Sale process, if we follow the right steps, at the right time, virtually every one will close.

So when we put together the situation where we have a motivated seller, and we can get virtually every Short Sale closed, that simply makes Short Sale listings very attractive. And it also make the non Short Sale listings that are not as likely to close less attractive.

Chris
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“

What Short Sale Topics or Questions do You Have in Mind

If there is anything specific you would like me to cover regarding short sales, let me know. Or if there are any specific questions you have, please ask.

Just leave a comment with your topic ideas or specific questions. Click on comments down below.

Chris

Short Sales – A Great Opportunity for Realtors in these Tough Times

We all know the story. Sales are down everywhere, some areas more than others, but virtually no area is untouched. My community is a Midwestern college town that is rarely affected by recession, but still sales were off 21% in 2008.

But with sales down, the one thing rising in the real estate world is the number of Short Sales. The number of Short Sales is rising, and rising fast. RealtyTrac predicts that by the end of this year that 50% of sales nationally will involve Short Sales! Whether or not they’re right, there is no question that the number of Short Sales is growing fast.

There are several reasons that the number of Short Sales is growing. Property values being down is one, also over leveraged properties, high foreclosure rates and on and on. But there will be more of them if for no other reason than more awareness of Short Sales.

In addition lenders are gearing up to better handle the crush of Short Sales offers they are flooded with. Just yesterday I was talking with a Loss Mitigator from Citimortgage and he told me that his desk had just been moved because they were expanding from the current 350 in the department to 1300! And that’s just one department at Citi. That is just one of many similar stories I’ve heard.

So there is no question that lenders want to do Short Sales, or they wouldn’t be expanding their departments so fast.

So how does all this make for a great opportunity for Realtors?

It’s a great opportunity because most agents hate Short Sales. Many agents don’t want anything to do with Short Sales. Most Realtors think Short Sales are a pain. The truth is that most agents have no idea what they are doing with Short Sales. Because most agents don’t know what they’re doing the Short Sales become more problematic, they take longer to close, and often don’t even close at all!

Now if most agents hate Short Sales, or they don’t really know what they are doing, so they are not out there looking for Short Sale listings, doesn’t that sound like there could be a lot of Short Sale listings that an agent looking for them could find?

You bet it does. I’ve had agents just give me listings, those dreaded listings that they don’t want, not even asking for a referral fee! Once people know your good at Short Sales the listings will find you. But until that happens it is really pretty easy for you to find the listings that most agents don’t want. How to do that is a topic for a different article, or several articles, and I’ll try to get to that soon.

But are Short Sales a big pain? Nope. Think of it this way. There are a few additional documents you need to collect from the client when you take the listing. Then there are a few extra notations in the listing. When you get a contract signed you have to organize and send some papers to the lender. In a few weeks they call you back and you have to talk to them two or three times. Then you get ready for closing like any other deal.

That’s not so hard is it?

Now if you don’t know what your doing it isn’t quite that easy, they can take a long time, the lender will seem like a pain (while they are thinking that your a pain), lots of frustration follows, and the deal isn’t very likely to close.

So if you know what your doing Short Sales are pretty easy, if you don’t they are hard and frustrating. It’s no different than anything else we could be talking about is it?

So the number of Short Sales are rising fast, and most agent either don’t know, or don’t even want to know how to handle Short Sales. That makes for a pretty good opportunity now while the market is slow.

Chris Badger
Strategic Loss Mitigation
“The Ultimate Short Sale Success System“