Sell My Short Sales

To All California Realtors/ Investors/ Wholesalers/ whomever:
California Revitalization Group is in need of your short sale listings:

My name is Bernie Germani, I work with a group of CASH BUYERS and were interested in working with you and your team, we would like to purchase at least 5-10 Short Sales each and every month, we can have a CASH offer within 24-48hrs on all properties that fit within our buying criteria.

Have you been trying to do Short Sales, but can’t get them completed?

Do they take too much time?

It’s time you discovered:
California Revitalization Group, Exit Real Estate Group, and Short Sale Wealth Builders!

No fees or costs of any kind to you the Realtor, or your seller in default
Get your FULL listing commission of 5-6% on average
Let us negotiate the short sale discount, saving you many hours of time and increasing your success rate
You, as the Realtor, will retain the listing AND your client
No more long phone calls and frustrations dealing with loss mitigation
Access the progress of your short sales online, 24/7!

In other words….

YOU list and sell the property
YOU make your commission
WE do the short sale negotiations

It’s THAT SIMPLE!

That leaves you time to do what YOU do best:

• Finding Sellers
• Finding Buyers
• Marketing and Listing Properties
• Cash Big Fat Commission Checks!

Popularity: 36% [?]

According to a securitization research note by Barclays Capital, short sales have been boosted by mandatory and voluntary foreclosure prevention efforts that prevent mortgages from entering real estate owned (REO) status.  As federally-funded modifications made through the Home Affordable Modification Program (HAMP) grow in frequency and lenders are expected to hold off on foreclosure proceedings, the REO pipeline shrunk, according to BarCap researchers. The foreclosure prevention efforts have had the effect of “artificially” boosting short sales.  “The artificial constraints to foreclosure auctions have resulted in a reduction in REO stock,” BarCap said. “As a result, the net volume of REO liquidations has also dropped.

As short sales are not affected by moratorium, their rate held up and their overall share in distressed sales increased.  It has now risen more than 10 points from the lows to about 35% of overall liquidations. It remains to be seen if this increase will sustain itself once the large number of loans sitting in foreclosure are finally released into REO.”  BarCap researchers pointed to the difference in severity seen in foreclosure and short sale scenarios as one of the drivers behind servicers choosing short sales.

Servicers that pursue foreclosure on non-performing loans held within securitization have to make principal and interest advances until the loan’s liquidation, BarCap said. If the asset declines in value during the liquidation timeline and it neighbors other REOs, the final selling price will likely come in far below the current broker price opinion (BPO), which leads to high severity.  Short sales, on the other hand, pose a shorter timeline during which fewer principal and interest advances are needed. The asset has less time to depreciate, and borrowers have a strong incentive to maintain the property in order to sell it. After all, a better-maintained house attracts stronger bids, reducing overall severity in comparison with the REO liquidation scenario.  A short sale also tends to cost the lender less than foreclosure and it spares the borrower the negative credit score implications.

Jeff Coga, a California short sale investor said “We don’t need to do transactions outside of California because we have our hands full with all the short sales that Realtors are bringing to us to write a No contingency offer on and help their clients from a foreclosure. Realtors are now flocking to us, because they know we can get these transactions closed.”

Susan Park, an Exit Real Estate Group Realtor, said in the Los Angeles area west of down town  short sales make up about 1-3 transactions in that market space.”

Popularity: 26% [?]

Wachovia Corp. is offering its borrowers money for selling their houses short, rather than going into foreclosure. Are the times changing for lenders to get your short sale approved?

Homeowners with Wachovia mortgages who are upside down on their property can get 1 percent of the price of their short sale, with a minimum of $2,500. The incentives only kick in once the deal closes.

In a short sale, borrowers get their lenders’ permission to sell their property for less than they owe in loans.

Last month, short sale transactions made up 37 percent of all home sales in California, and they’re expected to make up a larger part of the market in the next two years, according to an analysis by market research firm Campbell Communications.

Homeowners are often unfamiliar with the concept of a short sale, and the deals have a well-earned reputation for causing heartburn —- often taking months, and months to get approved by lenders. As a result, many homeowners allow themselves to fall into foreclosure, because they want to put this siutation behind them.

Lenders typically say a short sale is quicker and less costly for them than a foreclosure, but Wachovia is being unusually aggressive in converting potential foreclosures into short sales.

The program was originally intended to be temporary, but there’s no fixed end date for it yet. A source in Wachovia’s short sale unit said “the program will definitely run through November, and probably beyond”. The source preferred not to be named for fear of getting fired.

In Southern California, many of Wachovia’s mortgage customers originated their loans with World Savings Bank, which Wachovia took over in 2006. Last year, Wells Fargo & Co. took over Wachovia, but the integration is not complete. While the short sales unit is still operating as Wachovia, the communications are through Wells Fargo.

Depending on the situation, Wachovia may offer a small sum of money generally an amount that can help with moving expenses. In exchange, the former owner agrees to leave the house by a specified date and that the property will be left in a good and clean condition.

Wachovia is promoting the program quietly by inviting real estate agents to seminars run by employees from the bank’s short sale unit. At the moment the only seminars available in California are taking place in the San Francisco Bay Area, but they will be coming to Southern California early next year, the Wachovia source said.

Another key feature for borrowers is that Wachovia’s program leaves them with no lingering mortgage debt. Across the nation, attorneys have reported that the fine print on short-sale contracts from major lenders hold borrowers responsible for the unpaid mortgage balance, and lenders have pursued collections in court after the sale.
Jesus Yinh, heard about the incentives through a professional organization. He called Wachovia, confirmed what he’d heard, and began seeking out Wachovia customers through his real estate association

“It’s a big deal,” he said. “Most people who are short selling don’t have money to get another place. At least they’ll have some money to get a mover or get a rental.”

The cash incentive is only one of several steps Wachovia is taking to promote and streamline short sales. The lender dramatically curtailed the amount of paperwork short sellers must provide to get a sale approved, allowing them to get a short sale closed in as little as 10 days.

Wachovia is planning to shorten that time further by asking real estate agents to alert it to short sale listings so it can order an appraisal before a bid is made. When a bid comes in, Wachovia will know whether it’s in the range of negotiation.

Bernie Germani, a Southern California short sale investor said ” this program has been a blessing to many of his clients he works with to save their home from foreclosure. The extra money is a great to start moving.”

Jeff Coga, a real estate investor in Southern California also said ” His program of helping 90 families in 90 days from foreclosure, will be obtained because of this program from Wachovia.”

Popularity: 30% [?]

Insider short sale circles where a buzz in California over the past few weeks about legislation that was allegedly to force lenders to respond to short sale offers within 21 days. As humorous as this sounds – legislation being able to force a lender to respond within a certain time frame would seriously compromise the lender’s ability to process the massive volume of foreclosure deals and short sales that they have in their systems – common sense was the winner.

Now the blogs are full of apologies, and it seems that particularly agents and attorneys have to back paddle for jumping the gun and creating false hopes and expectations. I will be honest I was one of those people

Many of us saw this, and read it as a solution to California’s short sale nightmare, but then all the questions came in about why this was just for California why not the rest of the country? We all know how long short sales take, how extremely difficult it is to have these buyers stay until the closing, we also know that buyers put in offers on many different short sale properties, and the excitement can wear off when you don’t get a response for several months. We then say bye-bye commission!!!

These buyers from all walks of life are urgent to buy, because they see the opportunity in this foreclosure market, and are still trying to take advantage of the tax credit that was recently extended.

Many Realtors Jesus Yinh, Susan Park say “this service of an investor who puts in an all cash offer on their short sales will become allies for Realtors. Realtors know they can count on an investor to complete the transactions before the trust deed sale to save the Realtors commission. Everyone knows that the Realtors time, work, efforts will be lost if the property is sold at Trust Deed Sale.

Jeff Coga “says there is a negative connotation many times with Realtors thoughts about investors putting in a low ball offer. Jeff assures the Realtor it is just to get the negotiations started, and Jeff said he has never gotten a low ball offer accepted from the bank, but it’s a great starting point.” Jeff now has agents calling him day and night to buy their short sale, so that the Realtors can get a commission instead of it being lost, due to foreclosure. Jeff has partnered with Exit Real Estate Group, Short Sale Wealth Builders, and the California Housing Revitalization Group to have a major impact on the number of saved homes here in Southern California. The goal is to save 90 homes in 90 days, and they now have the perfect team in place to handle the new volume of transactions.

Popularity: 70% [?]

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.

Popularity: 19% [?]

It looks as though the goverment is trying to add more incentives for lenders to start pursuing short sales more aggressively. Taking the new foreclosing numbers into consideration the banks should take this incentive and run with it.

According to the Treasury Department, $10 Billion Dollars of government money will be directly available to lenders to aid in loan modifications, costs associated with doing short sales, and to catch up with all the delinquent payments. The funds will only be distributed to those lenders who agree to get rid of the bad assets from their books through short sales over any other method.

Although the details of the aid haven’t been finalized the 3 most important incentives for lenders are:

1. Extra $1,000 to lenders who agree to a short sale

2. Buyers will receive $1,500 towards closing costs and fees

3. 2nd lien holders will receive $1,000

There’s no doubt that the $10 Billion Dollar aid will entice the lenders to cooperate with short sale filings but the change also needs to come from within the Loss Mitigation Departments to expedite the processing of these deals. I think this is a great first step towards trying to untangle the massive web of foreclosures but will it be enough to prevent another real estate crash from happening?

There were 937,840 new foreclosure filings this quarter, a 5% increase from last quarter and a 23% increase from the third quarter of 2008. This doesn’t even account for the 7 million foreclosure homes that haven’t hit the market yet and the foreclosures that are about to happen from the new unemployment.

It’ll be interesting to see how this will all unfold.

Popularity: 8% [?]

A short sale in real estate is not always easy transaction.

There are many ways to lose your property, but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings, and it’s called a “short sale.”

Many agents say “that  half their sales in Los Angeles County over the past few years are short sales.” “Short sales are the norm now, and it’s almost odd to see a home that has any equity in the property whatsover” says Susan Park, Realtor and Partner at Exit Real Estate Group in Los Angeles.

When lenders agree to do a short sale of your residence it means the lender is accepting less than the total amount due.( Example you owe 400,000, but your lender says OK we can sell it at 325,000.) Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties

Keep in mind that I’m a Licensed Realtor, and not licensed as a lawyer nor a CPA and cannot advise on those consequences.
Check out The Mortgage Forgiveness Debt Relief Act and Debt Cancellation. I want you to be aware the I.R.S. could consider debt forgiveness as income and attempt to tax you through a 1099C. There is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. If this is your primary residence and you can prove Insolvency you may not be reponsible to pay taxes by completing an IRS Form 982. I would advise you to talk to a CPA about IRS Form 982.

Although all lenders have different requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a great indicator of what to expect.

•  Call the Lender
  You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You DO not want to talk to the “real estate short sale” or “work out” department, you want the supervisor’s name, the name of the individual capable of making a decision.  This process is very time consuming, and we don’t advise you to do this on your own, so that is why we would handle ALL the negoitations for you.

• Submit Letter of Authorization
  Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:

  • Property Address

  • Loan Reference Number

  • Your Name

  • The Date

  • Your Agent’s Name & Contact Information

• Preliminary Net Sheet
  This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent will prepare this for you.

• If the bottom line shows cash to the seller, you will probably not need a short sale. 

• Hardship Letter
  The sadder your situation is, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment.  Believe it or not bank lenders are people also and can understand if you lost your job, were hospitalized, but lenders are not particularly sympathetic to situations involving dishonesty, criminal behavior or the use your equity as an ATM machine 

• Proof of Income and Assets
  Always Always be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving. 

• Copies of Bank Statements
  If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it might be a very good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue. 

• Comparative Market Analysis/ BPO (Brokers Price Opinion)
  Across the nation markets are still declining and property values  continue to fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a BPO. Your real estate agent can prepare a CMA for you, which will show prices of similar homes:

  • Active on the market

  • Pending sales

  • Solds from the past six months.

• Purchase Agreement & Listing Agreement
  When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.

Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, our negotiatiors will ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.