Snap Shot look at Short Sales

There is some great issues with banks and learning the systems of "Short Sales" but over the last year. The banks have not been willing to work with the consumers. The banks are not willing to be timely with the getting information to the new buyers. The banks are not willing to work with in a timely manor with the sellers.

Studies have shown that it costs the bank more money if a property was foreclosed upon than if they accepted a 'short sale'. For homeowners, a 'short sale' makes much more sense for several reasons:
1- There is a much higher chance that the deficiency judgment could be negotiated in a short sale versus a foreclosure.
2- A short sale would have less of a negative impact on the homeowner's credit rating.
3- The homeowner would have at least some control over the timing of their relocation to new living arrangements.
4- A 'short sale' would allow the homeowner to leave with dignity.
5- It does not leave a house vacant for a year or more and bring other bank owned homes value down due to condition of subject property.
6- And Finally it just makes sense ( Banks don’t get it)

In the past, the banks used to process the loan (take the application, put together the file, etc.), lend you the money, and service the loan (send the bills, make collection calls, follow-up, etc.).

Over the last eight to ten years, the lending of mortgage money has shifted. First Wall Street and then the federal government became the primary lender in the mortgage sector. But, neither Wall Street nor the government had any interest in processing or servicing the mortgage. Mortgage companies continued to process the loans, but a new industry was created to fill the need for the servicing of these loans. So now, a separate and independent entity is servicing a tremendous portion of existing mortgages.

Just ten years ago, 37.4 percent of all mortgage loans were securitized (thus requiring a servicing company). Today, that number is 79.3 percent. Servicing companies actually collected more fees for a foreclosure than they did for a 'short sale'. Actually, the servicing company would lose money if they did a 'short sale'.

The federal government realizing that modifications were not the answer and banks realizing that the foreclosure process was too expensive, have agreed to change the fee structure to make it more profitable for the servicing companies to lean toward 'short sales'

Now knowing that information the process for short sales over the last 6 months to a year have become easier on everyone with one exception. While the process is easier, the volume has increased to the point that customer service has been thrown out the window and time of the essence is not spoken of.

My advice:
1- If you are in the need of a short sale, contact someone locally to help you through the process ( Loss Mitigation Specialist or an attorney). I can recommend someone to you if you need that assistance.

2- If you are interested in purchasing a Short Sale home, understand the process and understand it takes time and 85% of the time the delays are not the agents, or sellers fault. However, work with an agent that has done these type of transaction before. I can recommend someone to you if you need that assistance.

Negotiating Tips for Buyers and Sellers

NEGOTIATING TIPS

FOR BUYER AND SELLERS

Rule #1:
Do not go back and forth between the Buyer and Seller more than 2 times in negotiating. The 1st round is about the home and getting it sold or bought. The 2nd round it is about money. The 3rd round it becomes about who wins and becomes personal. The end result becomes lost in the negotiating.

Rule #2:
Buyers and sellers must not dislike each other. You must make sure that the agents and the buyers and sellers don't talk about each other. Focus on the putting the deal together.

Rule #3:
Stay focused on the goal of completing the sale. Keep emotions, personality, and personalities away from the transaction. Stay relaxed, cool, calm and collected. Don't let the negotiations and concessions interrupt the goal of the transaction.

Rule #4:
People believe what is in writing. Everything that is negotiated or discussed be put in writing so that there will be no uncertainties. Verbal uncertainties can not be upheld in any court. When things are put in writing make sure they are written with zero grey area, because "Error falls on the Scribner".

Rule #5: When you negotiate concessions make it a two street. If you want something, give something in return. This goes back to Rule #3 and #5. Negotiating can be sometimes considered a team sport. When both sides do some give and take, it makes the negotiating more successful.

Rule #6:
Never respond to negotiating or offers to quickly. This can come off as eager, and anxious. Make all decisions and negotiating done in the time frame of the contract but don't make it seem that is was not cut and dry and simple. Eagerness can make you look weak.

Rule #7:
Never brag or gloat about the terms in the contract or disclose material facts to anyone prior to the closing. This can hinder future negotiating of concessions. Clients are less likely to work with others when they think they received the short end of the deal.

Rule #8:
When you work on a contract and hit a bump in the road or a wall, stop and work the other terms of the contract. You can not try to fix multiple issues at same time. Negotiate through the entire contract and then come back to the bump and focus on one singular issue. It is easier to solve one task at a time.

Rule #9:
Do not loose trust with the buyers,sellers and the agents. Trust can carry allot of weight. When trust is lost, buyers and sellers second guess all negotiating and concessions.


Rule #10:
Never disclose that you have any time pressure. This is a sign of weakness. Work the transaction as if time is not an issue. If you use time as part of negotiations, you say to the other person that you will do what ever needed to get it done in the time frame that you need.


All these rules work don't work all the time. Some of the rules work all the time.

These are not set in stone, but have worked in the past over the last 10 years in the Real Estate Business. For more information contact Edwin Gerace mail@609sold.com or http://www.edwingerace.com/ or follow him on twitter at www.twitter.com/edwingerace

The Economy

Ding Dong The Election is done............
It is on the web, newspaper, radio, and water cooler about the economics of our country. It is a battle of arm chair quarterbacks vs back seat drivers.
Everyone has an opinion. My thoughts are not what everyone would agree with or some say I need to be an economic adviser to The President.
Example of our times. As a Realtor a buyer was declined a mortgage on a new home while putting over 60% down payment. This would be there 2nd home and was out of state, but only mortgaging 40%. " Things that make you say Hummm". Now here we are with great credit worthiness person and an economy that is wanting home buyers, and someone that tells them NO.
I was listening to my XM radio and hearing people voice their opinion on what it will take to fix our economic situation. I listened for couple hours a day over last week and the consistent thing was, something has to be done. As one reporter made a great point that the same bank that is getting help from the Bail out money are the same banks that are trying and working toward getting more deposits and less efforts to loan money. So in a nut shell banks want the free money but don't want to give out any (or as much as they receive). Maybe that is to keep the bank alive and pay off the corp exec large yearly bonuses.
I discovered many things over last couple months after reading and listening to many different speakers, some of which I agree with but most of them have components that have merit. They are as follows. 1-Putting money into a banking system that is not eager to lendmoney might not be the answer, but it will put some liquidity into the system that will help other fronts. 2- When an economy is in a recession the one true factor that makes brings us out is Real Estate. 3-The federal government needs to abandon the $7,500 tax break program, it is not being utilized. 4- Government backed LOW interest rates i.e. 4% need to be introduced immediately. 5- Incentives to home ownership need to be increased in the form of tax savings for purchases made over next 120-180 days. 6-More efforts to promote great opportunities in real estate not doom andgloom in the media, Government paid AD's. 7- Partnership with small builders and small mortgage companies to offer great opportunities, not just FREE money.
With all this being said, I must repeat what I believe and have been telling Realtors, friends and family for last 90 to 120 days. Buy Now, Interest rates are low and Sellers are motivated. The opportunity to buy low is upon us. The only way you know the true bottom is when it past you. Do you buy stocks when they are at their top and everyone is buying them to driving the price up? Buy Now build now.
Edwin