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Archive for the ‘Distressed owner/seller’ Category

If Your Short Sale Agent Has A 90%+ Success Rate, Are They Really Looking Out For Your Best Interests?

It seems like every broker has one- a “company” or “group” who will handle short sales for their agents’ clients. I’m contacted a couple times a week with the common pitch: “All you have to do is list them and we take care of the rest. We have a 90% (or 95% or 98%) success rate. We are the best thing since sliced bread and it’s easy money for you! It’s a WIN-WIN.”

First, I hate the term win-win.

Second, if a short sale company has a 90% or better success rate are they (and by extension YOU) really looking out for the best interest of your seller. Your client. You know- the person whose best interests you are supposed to be looking out for.

Are these companies claiming they NEVER have a listing that sells at sheriff’s sale for the mortgage amount or more, relieving the seller of the deficiency? 90% or more of the time they get all deficiencies forgiven? Are we as agents just looking for an easy way to make money and to hell with our sellers- our clients, the people we are supposed to represent?

Is a Short Sale the Right Course of Action for You?

Sellers- The Short Sale is Subject to YOUR Approval Too

Why I Don’t List Short Sales

Jackie Hawley
ReMax Encore

Cell: (248) 736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

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Why I don’t List Short Sale Listings

The title is off a little- if you are a past client or a friend I will consider taking your short sale listing, but you have to play by my rules- no exception. And those rules will be the topic of another post. For the most part I will turn away a listing if it needs to get short sale approval in order to close.

My reasons have nothing to do with morals or any personal feelings I may have toward someone who has to go through a short sale. I will be the last person you find who will pass judgment on your decision to short sell. I just plain HATE dealing with short sales. I’m good at it (I have listed a few- that’s how I know I hate them). I understand the process and am good at negotiating away your deficiency. I just don’t like them.

I don’t like the high failure rate. I would say at least 1/3 of short sale listings that go pending die. They may sell with the second or third buyer. They may go into foreclosure. But MY  business plan doesn’t call for that high of a failure rate.

I don’t like all the hoops the lenders make us jump through. I don’t like re-sending the same paper work over and over. I don’t like the like waiting for months until I get to actually talk to a human being.

I don’t like the fact that the lenders think they have the right to interfere with  my contract with the seller and dictate a change in commission. Why should a short sale seller pay a lower commission than my regular sellers?

I don’t like dealing with uneducated buyer’s agents who think their buyers can walk before the short sale has been approved or denied. They sometimes forget their buyer signed a contract and are committed to this sale like any other- read the contracts and addenda!

When I’ve listed short sales in the past I felt more like an admin person for the bank– not a real estate sales professional. The time invested in properly servicing a short sale listing is too intensive for the failure rate and pay and that is time taken away from servicing my buyers and normal listings.

If you are considering selling your North Oakland County or Lapeer County home and you won’t have to go the short sale route, please don’t hesitate to contact me.

Marketing Your Non Distressed Home

Why You Should List With Me

Preparing Your Home For Sale

Jackie Hawley
ReMax Encore
Cell: (248) 736-6407
Jackie@JackieHawley.com

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Southeast Michigan Short Sales- Why You Should Avoid Many Of The So Called “Short Sale Specialists”

I will preface this post with a kind of anti-disclaimer: If you have to sell via short sale, I DO NOT WANT TO LIST YOUR HOUSE. If you are a past client or a friend, I will list your house if selling via short sale is the best option for you, and you agree to my rules. So this post is NOT to get your short sale business.

I have my own reasons for not listing short sales, one of them being the success rate to close. In just general MLS searches for buyers and for market anlaysis’ for listings, it appears that about 1/3 of the houses that go pending short sale approval, end up back on the market or foreclosed. I personally never saw the benefits of a business model that has a 1/3 failure rate built into it.

Then today, one of my associates received an e-newsletter from a local “short sale team.” They bragged a bit about having closed over 100 short sale transactions in the past year. They then go on to crow about the fact they “process on average 75 active short sales daily…” Hmmmm. I was never a math genius, but I do own a calculator and that comes out to 100 closings for every 27,000+ clients they take on. So about one third of one percent of their business actually closes.

Since I can’t convince all my buyer clients to avoid short sale listings, PLEASE PLEASE PLEASE hire a good, experienced, successful agent to handle your short sale. Someone who was a good and successful agent BEFORE short sales became such a big business. To me it looks like many of the “specialists”, whether they are attorneys or real estate agents, specialize in listing a high volume of distressed homes with a small success rate. From a seller’s perspective, you may want to consider quality over quantity.

What Makes a Good Short Sale Agent?

Short Sale Approval is Subject to Seller Approval of the Terms

Bad Advise From Your Realtor? From Your “Short Sale Specialist”? What Are Our Responsibilities? Where Does The Buck Stop?

Jackie Hawley

Keller Williams Realty, Clarkston MI

Cell: (248)736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

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Bad Advise From Your Realtor? From Your “Short Sale Specialist”? What Are Our Responsibilities? Where Does The Buck Stop?

ignorant agents or deceiptful agents?I’m going to start this post with a true story. A week or so ago I received a phone call from an out of state Realtor asking if I would list his sister’s house- a short sale listing. I don’t list many short sales; mostly for past clients or friends. They’re too time consuming, I can’t increase my commission to compensate for the time or skill- and I basically flat out hate dealing with them. I’m good at it; I understand the process and have great follow up skills; I’m a good negotiator. I’m detailed oriented and I do educate myself about short sales. I just choose not to make listing them a large part of my business.

The out of state agent tells me he has the process started, and an actual human being has been assigned the file. He goes on to tell me that he has already referred the listing to another agent who sent the file to a “short sale team” – a team of agents at the same office who negotiates short sales for a fee. This particular group markets themselves to both the consumer and to agents. They free up your time to do what you do best- list and sell real estate. Leave the headaches of dealing with the short sales up to them and their great expertise; after all, they all have short sale designations and because of their great experience they have contacts at the various lending institutions. Blah blah blah.

This out of state Realtor was NOT impressed with this group of so called experts and jerked the file. I felt bad for what this agent, and his sister, have gone through, and he did have a lot of the leg work taken care of. His sister has a very salable property in my market area and it could be a good listing, so I agreed to take on his sister as a client.

Last week I picked up the file from her now ex agent, and spoke to the seller yesterday morning. Between my conversation with the seller, information from the file and my own homework, I found out that the house had gone up for sheriff’s sale Dec. 2010. That she owes less than $160,000 and that the house sold at sheriff’s sale for over $160,000. That there is only one mortgage. And that she is on 10 acres so her redemption period ends Dec. 22, 2011.

A few facts needed to understand the moral of this story:

  • In Michigan if a house sells on short sale or goes back to the bank via foreclosure, the bank(s) can seek a deficiency judgment for their losses. They have 10 years to do so and can renew the deficiency judgment every 10 years until satisfied.
  • If there is 1 mortgage on the house and it sells at sheriff’s sale for more than is owed on that loan then there IS NO DEFICIENCY for the bank to come after. If it sells for less than what is owed, the owner/borrower is responsible for the short fall if the lender chooses to come after it.
  • If there are 2 loans on the property the owner/borrower will be responsible for the amount owed on the second if the lender chooses to come after it no matter what the house sells for at the sheriff’s sale.
  • In Michigan there is a 6 month redemption period after the sheriff’s sale if the house is on less than 3 acres. If the house is on 3+ acres there is a 12 month redemption period.
  • The redemption period is the time after the sheriff’s sale where you have an opportunity to “redeem” the property (sell and pay off the debts). OR live rent free. Either way as long as you don’t abandon the property you retain the rights you had before the foreclosure process started.

So- on this particular house there is NO deficiency for the bank to come after. The current owner can live there rent free through the end of the year and may even be able to get some cash from the lender if she doesn’t make them evict her at the end of the redemption period. SO WHY THE HELL WOULD SHE WANT TO GO THROUGH WITH A SHORT SALE AND ALL THE HEADACHES THAT COME WITH SELLING???!!!

I gave her the facts and advised she speak to an attorney and accountant. She is choosing to live it out and save her money.

Why didn’t the original Realtor give her the facts and go over her options? Why didn’t the so called shortevil agent sale experts? Is there cause for a law suite? Or ethics complaint? Is there a breech of fiduciary? Or complaint with the state against the licenses of the original agent? The agents on the short sale team? The broker where both the agent and the short sale experts hang their licenses? When did brokers stop taking responsibility for the actions of their agents?

And what about the so called short sale specialists, who are licensed agents, and Realtors? Are they incompetent or evil? Don’t they have a responsibility legally and/or ethically to inform this potential seller of her lack of liability for the deficiency? I have to assume they actually KNOW how this works. So the only thing I can conclude is they clown agentsput a potential paycheck ahead of the good of their client. And I say potential pay check because about 2/3 of the short sale listings in this area never close. If my conclusion is wrong and these specialists actually don’t know the potential consequences of a foreclosure or short sale then they are complete, incompetent clowns. Either way- they shouldn’t possess a real estate license.

An agent can specialize in short sale listings and not take every listing that comes their way, but I’m not seeing that in my area. I’m seeing short sales not closing when the seller takes the terms of the short sale to an attorney and find out they can still get sued. I’m seeing short sales not close because the listing agent never informed the seller they may need to bring some money to the closing or possibly sign a note. I’m seeing short sales that ARE closing with no release of the liability for the deficiency and listing agents sitting at the closing telling their client that the banks have too many short sales to bother coming after them.

When I get a call from a potential seller and determine that they are upside down on their mortgage and don’t have the funds to make up the difference, I go over their options and ask that they talk to an attorney and an accountant. The short sale route IS NOT always the best course of action and the seller should know this BEFORE going on the market and accepting an offer. Before stringing along a buyer for 5 or 6 months to only find out that their(the seller) own options are less than they were before listing for sale. I figure over half of the potential short sale sellers I talk to don’t go up for sale at all after our conversation and checking with an attorney and accountant about the pros and cons of the alternatives- deed in lieu of foreclosure, foreclosure, mortgage modification, bankruptcy…

If you can no longer afford your home and owe more than your home is worth, please please do not just jump on the short sale band wagon without doing your homework first. Please feel free to contact me; I will be happy to go over your options and discuss what may be the best course for you. And why should you trust me after what I just wrote above about what I consider typical behavior? Because I don’t want to list short sales and if you choose to go the short sale route I probably won’t agree to list your house.

Jackie Hawley
Keller Williams Realty
cell: (248)736-6407
email:
Jackie@JackieHawley.com

Is a short sale the right course of action for you?

Information for the distressed homeowner/seller

Information for the non distressed homeowner/seller     

 

Michigan Association of Realtors legal update regarding short sales

Copy of the law regarding time frames for mortgage deficiencies

photo from Flickr courtesy of:
see, hear, speak no evil monkeys- Alison Curtis
evil eyes- Kim Morten Olsen
clowns- carf

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Oakland County MI Seller- When Foreclosure May Be Your Best Option

If you need to move, and you’re upside down on your mortgage, short selling your house isn’t always the best option. Sometimes bringing the difference to closing is best. Sometimes renting your house out instead of selling is your best option.

And sometimes letting the house foreclose is your best option.

I had a call from someone yesterday who wanted me to find him a house to lease. He had a “short sale specialist” lined up to list his current home. After talking a bit he told me his house had already sold at sheriff’s sale this past December, so while we were on the phone I looked it up in the public records. The bank had bought it back for $130,000. I asked what he owed- less than $120,000.

THERE IS NO DEFICIENCY!! Nothing for the bank to come after him for over the next 10 years. Foreclosure or short sale– both screw your credit and either way he’s looking at 2 or 3 years before he can get a mortgage. So why would he want to go through the headache of a short sale? Why not live out the next 5+ months rent free and save his money, THEN find a rental? Why didn’t the “short sale specialist” give him his options? That last question will be the topic of a future post.

Other times a person may want to consider allowing their house to go into foreclosure instead of going through the hell of a short sale is when you are planning in filing bankruptcy. If bankruptcy is possibly in your future, you need to talk to a bankruptcy attorney before signing a listing.

In Michigan you have possession of the house for 6+ months after the sheriff’s sale and if you are on 3+ acres you have 12+ months rent free.

Everybody’s situation is different and there is no one size fits all solution. If you have any questions about possibly selling your house- short sale or regular sale, please feel free to contact me for a confidential consultation.

Jackie Hawley
Keller Williams Realty
cell: 248-736-6407
email:
Jackie@JackieHawley.com

www.MiRelocation.com

Seller Blog

For Sellers

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Oakland County MI Home Seller- The Short Sale is Subject to YOUR Approval Too

houseWhen you sell your home via short sale in Oakland County MI or Lapeer County MI one of the contingencies in both your listing agreement and purchase agreement will be (should be) “subject to seller and lien holder approval of short sale.”

The bank or banks can approve the short sale, but if you aren’t happy with the terms under which the bank approved the short sale, you don’t have to close. Sometimes foreclosure is a better alternative than a short sale. To be fair to both your agent and potential buyer,  you should discuss the alternatives with you agent, an attorney familiar with bankruptcy, and your accountant if you have one, prior to listing your house. Once you make that informed decision to list, you need to be prepared for what may happen. Some basics you should know about short sale:

 

  • You’re not just walking away from the deficiency without consequences unless it is negotiated with the bank or banks
  • You may have to bring money to the closing or sign a note for a portion of the deficiency in order to get the lien holder(s) to release you from liability for any deficiency
  • In Michigan the bank(s) has up to 10 years to come after you for the deficiency if it isn’t taken care of when you sell
  • If the house is sold at sheriff’s sale for the same or more than you owe there is no deficiency to hold you liable for (providing you have only 1 mortgage)

My job as a listing agent, when representing a short sale seller, is to price the home in a manner to obtain an qualified buyer at a price and terms the bank(s) holding your note will take. It is also my job to negotiate terms that are acceptable to you the seller- mainly dealing with the deficiency so you don’t get sued later. Sometimes the banks will just release you of responsibility because of my sunny personality! Sometimes they will want you to bring money to the closing. Sometimes they will want you to sign a note. Sometimes they may require money and a note.

When we meet the first time, I need you to be totally forth coming. I will not judge you. I need to know broke homeownerthe reasons you’re selling, your debts, your income, I’ll take a DNA swab- not really regarding the DNA but you get the idea. I need you to be totally honest. And I will be honest with you. I will let you know what I think you should expect. I will discuss various negotiating techniques I have found to be quite successful in bringing the short sale to a conclusion that is favorable to everybody. And I will tell you if I think you would be better off meeting with a bankruptcy attorney. Bankruptcy is NOT a dirty word! Foreclosure is NOT a dirty word!

This is the second in a series of posts about selling a short sale listing. I will be writing posts in the near future that will discuss negotiating techniques, pricing strategies, what to look for in a buyer, and post on when foreclosure may be the best option for you.

Please don’t hesitate to contact me with any questions about selling your North Oakland County or Lapeer County MI home.

Jackie Hawley
Keller Williams Realty
cell: (248)736-6407
email:
Jackie@JackieHawley.com

Is a Short Sale the Right Course of Action for You?

For Sellers

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Could Incomplete MLS Listings Be To Blame For Bad Appraisals?

houseI was reading a letter from our outgoing board president, John Burt, published in our monthly board publication. In the letter he writes about appraisals and mentions that appraisers read the remarks we put in the MLS profile sheet. He goes on to write: “That information can make a difference in value, not just for your listing, but other comparables. If you have a “dog” of a listing, please don’t describe it as a palace, because that could be a future comp for a true palace that gets listed.”

He’s right. And after doing several market updates recently I came to the conclusion that the problem isn’t puffing our listings. It’s incomplete or incorrectly filled out listings. The example I’m going to use is my year end sales data for Lake Orion (the lake located in Lake Orion, MI).

In 2010 there were 27 solds reported in the MLS for lakefront homes on all sports Lake Orion. 12 bank owned homes, 3 short sales, 12 regular sales.

10 listings- or 37% of the total lakefront sales– had absolutely no description of the house. A description lazy listing agentsis NOT “This is a Fannie Mae HomePath property, purchase… blah blah… highest and best offers are due by….”. On THIRTY SEVEN FRIGGIN PER CENT of the sold lakefront listings on Lake Orion the listing agent made ABSOLUTELY NO ATTEMPT to “sell” their listing to other agents. Because that IS what the MLS is for. To sell your listing to other agents so THEY can sell it to their buyers.

But it gets worse. If an appraiser is going to search for solds on Lake Orion you would think he would (should) be able to search X price range, check the lakefront search field, and fill in the water name search field with either Lake Orion or even Orion. If an appraiser did that for sales in 2010 he would have missed out on 7 of the sold listings- or 26% of the sold lakefront homes on Lake Orion. ALL of the listings that had no water name filled in had no description except how to submit the offer. ALL of those listings that had left the water name search field blank and didn’t bother to fill in the description were bank owned homes.

Now I showed many of these homes. Some were in pretty good condition. Some were outright dumps. Some suffered from delayed maintenance. But unless an appraiser had been in those homes, he would have no idea of the condition and no basis for adjustments.

Not only does half assing your job as a listing agent affect appraisals, it is affecting how much work a buyer’s agent has to go through just to be able to include all appropriate, available homes for our buyers. In Lake Orion it’s not so bad to read through 30 or so active listings but try finding a lakefront home in Waterford or Clarkston. Lake Oakland covers both Waterford and Independence Townships. When I update my sales data for Lake Oakland I will probably have to read through over 200 listings since 20-25% of all lakefront listings in our area seem to have the water name search field left blank.

Should appraisers do the same as I am, and read through a couple hundred listings to find the 3-6 comps they use? Yes- they should. A lot is riding on the outcome of their appraisal, and an inaccurate appraisal can mean financial devastation to a seller. DO appraisers go to those lengths for the $300 or so they make on an appraisal? I doubt it.

So listing agents- especially REO agents- Please Please Please start doing your job and fill out your listings completely and accurately. If you can’t at least do that minimal part of the job, please do us all a favor and quit this line of work.

Jackie Hawley
Keller Williams Realty
cell: (248)736-6407
email:
Jackie@JackieHawley.com

For Sellers

Oakland County MI Lakes

Lake Orion (the lake)

Why Are Appraisers Calling This a Declining Market- Prices Are Up Inventory is Low

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