New Policies for Taking Short Sale Listings

By
Real Estate Agent with RE/MAX Advantage Nampa, ID

A Monday morning review lead to New Policies for Taking Short Sale Listings.

Idaho Short SalesThus far, in 2010, I have successfully closed 20 short sale transactions and failed on 11, which ended up going to foreclosure. (These are in addition to my traditional listings/closings.) These 11 that failed to close, really get to me! In times past, I have had an excellent closing ratio for listings. This does not feel good.

So, after reviewing the successes and the failures of my short sale business this morning during my meeting with my team, I came to the conclusion that there are some listings that I should not take.

We discussed each one, and they each have their own unique story, however, there are some basic polices that I think may help me moving forward:

 

             1. Seller has to ABSOLUTELY, have their head in the game!   This means for them to grasp the complete understanding of the process and the potential risks along the way.  I need to have a good understanding of their financial position, beyond the house itself. Are they a candidate for a bankruptcy down the road?

They have to be cooperative in showing, staging, keeping a lockbox and a sign on the property and really, just to have their head in the game! If sellers are too emotional and even depressed about their financial situation, often times they will not persevere through the process.

             2. Evaluate second lien holders.  Following my experience, I know some 2nd lien holders are almost useless in trying to work with, but simply take a look at the junior lien holders and decide a game plan.Idaho Real Estate

             3. Don't take a listing when the foreclosure sale date is less than 2 months out.  Every time I've tried this, it just seems to bite me in the end and we run out of time to process and the bank does not postpone the sale. I cause myself more stress.

             4. Don't follow the bank's pricing.  If the bank gets a BPO or an appraisal and it's significantly different than your evaluation, follow your gut & your expertise, not the bank's price. If it's not selling at "their" price, then obviously the price is wrong.  Work it out through time & petition the valuation if necessary.

             5.  If a borrower is more than 12 months behind, let it go!  Chances are, if the bank hasn't foreclosed by that time, they will either be selling the note/servicing to someone who shortly will.  
                   Check out my earlier post:  Fannie Mae - No Mercy After 12 Months Delinquent!

Now, I understand the bigger picture, or at least for me, is to help these people Avoid Foreclosure and to deliver the option of Idaho Short Sales, but if it only brings about frustration and added stress for everyone, why waste the time for the headache?

This is just a start, I think, to some guidelines I need to have in place to tighten up my closing ratios.

I'm looking for other ideas that you may be using that may help clients and agents across the country with their short sale frustrations!

Please share your thoughts on any of these & feel free to add to the list.  THANK YOU!

 

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Re-Bloggged 3 times:

Re-Blogged By Re-Blogged At
  1. Praful Thakkar 10/26/2010 01:20 AM
  2. Don & Valerie Keeton 10/29/2010 09:07 AM
  3. Svetlana Stolyarova 10/30/2010 01:21 PM
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Rainer
16,465
Carol Letcher
Owner/Broker
Desert Properties Realty

All good info here...there are some listings I will not absolutely take anymore due to junior lienholders and their ridiculous demands.   Sellers need to be onboard, otherwise we are wasting everyone's time.  Love what I do but we also have to be realistic about expectations.  Great Post Don!

November 02, 2010 11:09 PM
Rainmaker
792,949
Lyn Sims
Schaumburg Homes
RE/MAX Suburban - Schaumburg IL Real Estate - Northwest Suburbs of Chicago

I have to agree with the 2nd lien holders, I have turned down a few that have had odd 2nd liens from the Small Business Admin & Back Child Support Liens.  Good luck getting those guys to negotiate.  As BB says, you can't help everyone, just someone every once in awhile.

I saw this featured in the RE/MAX newsletter, congrats.

November 10, 2010 07:59 PM
Rainmaker
341,943
Don Wixom
"Looking out for your next move..."tm
RE/MAX Advantage Nampa, ID

Carol, right on!  Thank you!

Lyn, Thank you for reading & for the congrats! This has been fun!

November 12, 2010 12:11 AM
Rainmaker
314,400
Dave Halpern
Louisville Short Sale Expert
Keller Williams Realty Louisville East (502) 664-7827

Don,

Very astute list of screening criteria.

One of the perplexing developments is that some short sales that were slam dunks one or two years ago don't work today. Therefore screening criteria need to be revisited periodically.

MI practices, 2nd mortgage practices, doomed loan mod offers from the banks, government programs, all rattle the short sale process and mostly in a negative way for the end consumer who ends up losing the house to foreclosure and for the Realtor who wasted so much time without being able to help.

 

January 10, 2011 12:50 AM
Rainmaker
341,943
Don Wixom
"Looking out for your next move..."tm
RE/MAX Advantage Nampa, ID

Dave, so true! I am looking at a short sale listing today. I may pass on this tenant-occupied, dirty, out-of-state owner short sale...

January 10, 2011 10:23 PM
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Rainmaker
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Don Wixom

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