Real Estate Forums

San Diego Real Estate · 03-01-2008, 07:45 PM

Well Folks,

IMHO I would not spend more than 5 minutes working with a buyer that insists on making offers on Short Sales. I personally have seen so many Buyers and Agents get so emotionally drained trying to put those deals together. If that was the only properties avaiable I would no longer be in the business.

Now Bank Owned for those determined to buy in the Foreclosure world different story. As long as they are willing to pay close to full asking price and generally they are sold as is!

Any other tips or thoughts about working the foreclosure buyers?

SEOWolf · 03-02-2008, 11:31 AM

Al every time I think I know about “Short Sales” I run into something else.

Can you give us all a complete and detailed explanation on Short Sales 101?

And please break it down “Barney Style” so I can get it this time.

~Mack

San Diego Real Estate · 03-04-2008, 07:19 AM

Foreclosures 101...

Here is a brief description of how the foreclosure market works. Some of do's and don'ts when dealing in the Foreclosure world.

You have three main foreclosure property types:

1. REO
2. Short Sales
3. Bank Owned

For a more detailed Overview on How Foreclosures work please take a look at one of my most recent Real Estate Blog Posts.

Please feel free to add any Foreclosure Buyer Tips that you think might be helpful!

Orlando MLS · 03-08-2008, 10:06 AM

I'd be more than happy to submit offers on short sales, as long as they are pre-approved by the bank and the agent has all their ducks in a row.

What most agents don't understand is that they need to try and market the property at full price before dropping price to a ridiculous level. The reason for this is the banks want to be able to show to their stockholders/shareholders that they have done everything possible to try and recoup the banks money. Also, the agent needs to have good communication with the right people at the bank. It's tough to do this, but if they know what they are doing and if they are speaking to the right people, then they have a good chance of getting the short sale approved.

Too many agents drop price immediately in an effort to glean buyers out of the transaction. This is almost criminal when you consider the repurcussions to the seller facing foreclosure and ruined credit.

Again, if there are two loans on the property (which most short sales have) then both lenders need to agree to the short sale. The second usually ends up with very little, but if they don't agree to the sale they may be more inclined to let it go through the foreclosure process since they aren't going to get anything anyway. In other words, why waste your time and effort for something that will not pay you? Make sense from a business perspective.

They can work, but every process needs to be sorted out before it stands a chance. You can usually obtain this information quickly by interviewing the agent that holds the short sale listing. If they don't have all the right answers, just tell your client NEXT!

San Diego Real Estate · 03-09-2008, 08:59 AM

Orlando I agree...

The problem in our market is that Agents are doing anything to take listings and in 99.9% of the cases they are listing the home just to attract offers. Then they throw them at the bank in hope that they will take one. Of course we are talking a whole different pricing as well in our market compared to yours.

The other major issue is exactly what just happened to us on a Bank Owned Purchase this past week. It appears that the lenders are getting so tight that unless the buyer has 20% to put down regardless of FICO or reserves there appear to be no Second Mortgages that will due a 90CLTV anymore and that is not good specifically in our market where the median priced home is still around 500k.

Here is the post I just made regarding this very issue...Check This out and you will start to see why I recommend not to show Short Sale and now even Bank Owned Properties in our market unless the Lisiting Agent has their act together or a loan already pre-approved.

Orlando MLS · 03-09-2008, 09:28 AM

On a slightly different subject here.

I won't mention names because I do a lot of business with this Lender. But there is one lender that requires clients to be pre-approved through their lending institute before they'll even consider an offer on their REO properties.

I don't think this is even legal...but I've run across the same problem three times in one month and it makes it real tough on my clients. Particularly because this lender has traditionally worked with all A Paper buyers. Nonetheless, there is not a darn thing I can do about it. I've tried every which way to get around it, but they just don't care.

lasvegasrealestate4u · 03-14-2008, 09:13 PM

It's good to see that we are not the only market dealing with these issues. Welcome to our world!

Quote:

Originally Posted by San Diego Real Estate

Orlando I agree...

The problem in our market is that Agents are doing anything to take listings and in 99.9% of the cases they are listing the home just to attract offers. Then they throw them at the bank in hope that they will take one. Of course we are talking a whole different pricing as well in our market compared to yours.

That's certainly becoming a problem and I had to write a post about Las Vegas short sales after a listing I saw being advertised today.

Of course, the intentions are so blatant in the description of the property that it's being disclosed why the agent took the listing in the first place, or the agent really has no clue what they are doing in the first place. You Decide.

Quote:

This is a HUGE SHORT SALE, sale is totally contingent on lender(s), NO GUARANTEE. I have the short sale application in hand — LETS TRY IT !!!!!!!!!!

San Diego Real Estate · 03-15-2008, 09:34 AM

Folks thanks for sharing your Short Sale Experiences...

As we can see there are a lot of different views when it comes to working the Short Sale Market. We are all going to need to get more proficient at working the Short Sales in todays real estate climate. I know that working Short Sales in San Diego we spend hours sorting out all the short sales and their issues! OUCH

Any other Hot Short Sale Tips out there?

lasvegasrealestate4u · 03-18-2008, 01:43 AM

Actually, I probably should not have ranted too much on the last post but the short sale thing brought up something that happened with an offer we put in on a property from an agent that did not know what they were doing.

It turns out that the seller (after the offer was submitted) signed the title over to a loss mitigation specialist and the listing agent (without permission) forwarded our offer along with all of our long time investment buyer's information (including proof of funds) to the loss mitigation specialist.

Key words here are long time true investment buyer (since 2001) and Proof of Funds. Luckily, this particular client tells me everything that somebody pitches to them for advice so I did not completely freak out when I found out.

At first, I was extremely upset that my clients information was shared with a third party (obvious agency violations). But...

It turns out that after calling this loss mitigation specialist that I find out they are also an asset manager so I got the direct phone number for an asset manager (who is also an Attorney that used to work for a bank) with thousands of properties they are handling.

Luckily, this particular client was very cool with the situation that happened. However, I have another client that would have absolutely freaked out and would have had their Attorney all over it.

Bottom line -- you better know what you are doing in these transactions or have a very good baby sitter (sales manager or managing broker) before getting involved in these transactions.

There is a lot of liability involved so don't take them just to take a listing.

lasvegasrealestate4u · 03-26-2008, 04:03 PM

Lenn Harley wrote a really good post about REALTORS Listing Short Sales over at Activerain. I certainly agree that if you do not know what you are doing when listing them, you are doing more harm then good.