Sell My Short Sales

Did you know that the credit bureaus sell your clients’ personal information? It’s true! The same agencies that possess your clients’ most vital credit information will flag the files of those applying for home loans and sell their personal information as leads to the highest bidders.

With a price tag of $25 to $100 or more, your clients’ names and certain specifics about their credit reports, including addresses, phone numbers, mortgage histories, and even FICO score ranges, are sold to unscrupulous mortgage companies which then blindly solicit their business. The practice creates “trigger leads” of your clients, causing a flood of unwanted phone calls and mail offers which they may wrongly attribute to you. This could result in a significant loss of trust, costing you future business and referrals.

Unfortunately, no legislation presently exists to prevent credit bureaus from profiting at your clients’ expense. As trigger leads, they are simply at the mercy of any number of pie-in-the-sky offers designed specifically to try and discredit you and the mortgage professional you know and trust. Ultimately, there are only a limited number of sources where lenders may turn to obtain mortgage money, and it’s unlikely that your clients will find an unbelievably low rate without an unbelievably high cost.

Your best option is to protect your clients from this unfortunate scenario through proper education and preparation. That’s why, prior to taking an application for any loan program, I always encourage borrowers to opt-out of credit bureau solicitations by visiting www.optoutprescreen.com. This is a good way to avoid the problem altogether.

As our clients embark on what could be the largest financial transaction of their lives, it’s important to have a professional mortgage specialist on your team who will have their best interests at heart.

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1.Pre-approval – Getting pre-approved for a mortgage allows borrowers to know exactly how much house they can afford. Viewed as “cash buyers”, pre-approved borrowers have greater negotiating power as well.

2.Loan Search – Buyers should seek the advice of Jesus Yinh an experienced mortgage professional, someone who will help determine which financing options best suit their needs today and in the future.

3.Loan Application – It’s crucial that consumers supply the lender with as much information as possible, as accurately as possible. All outstanding debts as well as assets and income should be included.

4.Documentation – Buyers must submit paperwork supporting the application as well. Information commonly sought includes pay stubs, two years’ tax returns, and account statements verifying the source of the down payment, funds to close and reserves.

5.The Hunt – The buyer begins shopping for a house. When the right one is found, the terms of the sale will be negotiated, including the price and potential terms of the loan being sought.

6.Appraisal – Lenders require an appraisal on all home sales. By knowing the true value of the home, the borrower is protected from overpaying.

7.Title Search – This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.

8.Termite Inspection – While most purchase loans do not require a formal inspection for termite and water damage, some loans (especially government loans) allow for the possibility. If problems are found, repairs may be necessary.

9.Processor’s Review – The mortgage professional packages all pertinent information and sends it to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.

10.Underwriter’s Review – Based on the information put together by both the loan executive and the processor, the underwriter makes the final decision regarding whether or not a loan is approved.

11.Mortgage Insurance – Lenders require private mortgage insurance when borrowers put down less than 20 percent on a loan.

12.Approval, denial or counter offer – In order to approve a loan, the lender may ask the borrowers to put more money down to improve the debt-to-income ratio. The borrower may also need a bigger down payment if the property appraises for less than the purchase price.

13.Insurance – Lenders require fire and hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone. In California, some lenders require earthquake insurance on condominiums.

14.Signing – During this step, final loan and escrow documents are signed.

15.Funding – At this point, the lender sends a wire or check for the amount of the loan to the title company.

16.Confirmation of Recording – The lender authorizes the disbursements of loan proceeds.

17.Close of Escrow – Documents transferring title will now be recorded with the County Recorder.

18.Buyer Begins Making Mortgage Payments

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If your in the short sale game you know how important it is to handle the BPO process. If that BPO comes in too high it’ll kill your deal on the spot. But does that mean that you “trick” the BPO agent into seeing things that aren’t really there?

I don’t know about you, but somehow that just doesn’t sound right. Short sales are already a very sensitive transaction without going around advertising that you’re using “Jedi Mind Tricks” to influence the BPO agent. Your not trying to trick anyone into anything when doing the BPO.

So, how do we get around this issue? I’m going to give you a BIG tip. You can thank me later. No one that I know of uses this technique except for our team. What you do is pay for a professional appraiser to appraise the property based on comps of homes that are active, pending, and sold. The BIG tip comes from where you get your Sold comps.

Most people use the sold comps they find on the MLS, Zillow, or Realtor.com. What we use are the sold comps of homes that sell on the courthouse steps during the Trustee Sale. Brilliant, isn’t it? They are true sold comps but have sold anywhere from 20% – 30% below market value.

I just did the numbers in one of the Cities that I just finished my BPO on. There are 70 active listings. 32 of those listings are Short Sales. 31 Homes have sold in the last month. Only 5 of those sold homes were short sales. Stats don’t look too good for short sales, do they?

So, based solely on those number only 16% of short sales are selling. What happens when they don’t sell? They go to auction! Our team believes it’s very important to bring these sales prices to light since they aren’t available on the MLS. We do some digging but prepare a pretty awesome package for the BPO agent with true, honest comps without having to Jedi Mind Trick nobody.

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Everyone seems to be scrambling to find some kind of niche in this crazy real estate market of ours. Sure, trying to get shrot sales sellers on your marketing is awesome but all that marketing on your own can be a nightmare! Postcards, yellow-letter mailers, prospecting, FSBO, expireds, door knocking, networking, Chamber meetings, the list goes on and on… PHEW! So if you’ve done all the above and still struggling to get some business in the door here’s some information for you to Niche This market and get more short sale leads (and possibly other leads)

What Market? The Divorcee’s!

With over 50%…. Yes, I said 50%, of couples in America getting divorced it’d be crazy not to consider working with this niche group. If you know what your talking about and know how to handle this sensitive situation you’ll be the go-to Realtor or Investor for divorce attorneys, CPA’s, Lenders, Family counselors, etc.

I came across this class that’s being sponsored by Exit Realty (No, I’m not making a pretty penny from this so relax!) and wanted to share the wealth and help others grow if that’s your wish. Learn all you can from this class and begin networking and cultivating the necessary professional relationships so they can begin sending you all the biz you can handle. I know how important it is to find a niche and this may be an ever-growing, market resistant problem that we can grow with. Plus, you’ll probably get a ton of short sale leads as well! I’m obviously going, hope to see some of you there too.

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I actually took this post from my Activerain blog and decided to repost it. We have Realtors that read this blog and just wanted to lend some information that could be a great benefit to them if they’re struggling.

If your an active Realtor you know how tough its been to stay afloat these last few years in the business. If you’re still struggling to get a handle on your finances there may be hope. Realtors and Brokers can apply for federally backed loans through the SBA. This is great news at a time where real estate professionals are “struggling to find money for day to day expenses, debt service, capital, and funding for expansion.”

Let’s take a look at 3 SBA loans that are most relevant to real estate professionals and how these funds can be used.

1. ARC (America’s Recovery Capital): No- interest, no-fee, deferred payment short term loan. The ARC loan can loan up to $35,000 to small businesses that need capital to ride out the wave of uncertainty until the business can return to profitability. You can use this money to pay existing debt including credit card debt, if the debt was used for business expenses. The loan is available until September 2010 or until the funds are available.

2. Section 7(a) Guaranty Loan Program: With this loan you’ll have to apply with a participating private section such as a bank. You can use this money for working capital or debt replacement. Loan limits are up to $2 million and is intended for long-term needs rather than emergencies. The SBA will guaranty this loan up to 90% from payment default by the borrowers.

3. Section 504: This loan is intended for long term, fixed rate financing for fixed assets such as buildings and land. It’s great for Brokers who are expanding their business or for offices who are branchign out. Section 504 will loan up to $1.5 Million.

If you want more information please visit www.SBA.gov. Now “Go Get Your MONEY!”

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