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Posts Tagged ‘short sale’

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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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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distressed homeownerThere are many distressed sellers in North Oakland County MI. I just did my sales updates for Oxford MI and over 60% of the sales in 2010 were distressed salesbank owned and short sales. I will probably come up with similar numbers when I’m finished with Lake Orion and Clarkston, and the surrounding areas in North Oakland County and Southern Lapeer County seem to be about the same.

One of the numbers that really sticks out is that the bank owned sales are down from 2009 but short sales are up significantly. Because of this phenomenon there has been a HUGE proliferation of so called experts into the field of real estate sales. Agents who couldn’t earn a living in a normal market ran out and got a 2 hour designation and are now “short sale experts.” Attorneys who are seeing their income decline in Michigan’s bad economy are getting into negotiating short sales on behalf of home sellers- attorneys who NEVER practiced real estate law are now “legal experts” in the short sale arena.

Along with all of these new found “experts” is a major influx of mis-information designed to convince desperate home sellers that of course the short sale route is always the best route. Of course if the homeowner, who is losing his house, choses one of the other options available, these so called experts wouldn’t be able to make a pay check off that homeowners misery.

A good real estate professional needs to go over all of the options available to a distressed homeowner along with the potential consequences of the various options. Whether to sell via short sale, give the house back (deed-in-lieu of foreclosure), attempt a mortgage modification or simply allow the house to go into foreclosure should be a decision that has been invested with a lot of thought. Whatever you decide can have a long term impact on your life.

Because of instances where I have felt the seller was getting sold a bill of goods – I have decided to write blood sucking specialista series of blog posts explaining in detail the different options available to the distressed seller in North Oakland County MI and Lapeer County MI. For a quick primer on how the foreclosure process works in Michigan, please visit a post I wrote back in September, 2010.  And one thing that I have discovered over the years- there have always been “experts”, but I can’t remember a time where an agent pigeoned holed themselves like the foreclosure agents and short sale agents of today. Many of the short sale agents only deal with short sale listings. So it is not in their best interest to talk a seller out of the short sale route. I think about 2/3 of my listing appointments with distressed homeowners result in that homeowner NOT listing– with me or anybody else.     

When I have finished my series of posts for the distressed seller, I will paste links to all of them in one blog post for easy reference.

Jackie Hawley
Keller Williams Realty
cell: (248)736-6407

Jackie@JackieHawley.com

Home Seller Blog

What Makes a Good Short Sale Agent

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short sale listing agentWhether buying or selling a short sale in North Oakland County or Lapeer Michigan, the abilities of the listing agent are very important. From the seller’s perspective, they need an agent who is very careful and precise with pricing. The seller needs an agent who knows which offer should be accepted and which should not. An agent who will not only get the short sale approved with the first offer, but approved with terms that are acceptable to the seller.

From the buyer’s perspective the seller needs that same agent I just described above. With a lesser agent your offer may never make it to the closing table and you can wait 5 or 6 months only to be told “too bad, so sad you’re not getting the house.”

So- back to the question in the title of this post. What makes a good short sale agent?

The same things that have always made an agent a good agent. A short sale is just another contingency that needs to be cleared in order to make it to the closing table, albeit more difficult to accomplish than most contingencies. In the past, the sellers didn’t always know they were being short changed when they hired an incompetent agent. And the buyers were ecstatic if they could pit their good agent against a lousy listing agent; it just meant better price or terms for them. Now, the abilities of the listing agent are much more determinant to the outcome of the transaction- whether the closing happens or not.

A good agent in any market is detailed oriented, full time, knowledgeable, honest, available (not 24/7short sale listing agent experience counts available, but a person who answers their phone or returns calls and emails in a timely fashion). Experience helps immensely but a newer agent can also be a good agent. But all things being equal except for the experience factor, experience should trump new. And beware! Short sale designations DO NOT make an agent a good agent. Designations are easy to get and even if an agent had a PHD in short sales (if one existed) that doesn’t mean they are detail oriented, full time, honest or available. It doesn’t even necessarily make them knowledgeable. It means that sat through some classes.

Oakland and Lapeer County seller: If you need to sell and include a short sale contingency, please please please carefully choose the agent who will represent you. There is no need to go through the motions and take up a half  year of your life to just face foreclosure.

short sale agent honesty is importantOakland and Lapeer County buyer: If you are willing to put looking at homes on hold for 5 or 6 months while you wait for lender AND seller approval of the short sale, don’t you think the ability of the listing agent affects you almost as much as it affects the seller? If the sale fails you won’t be looking at a foreclosure like the seller might, but you could be looking at rising interest rates and rising home prices which could be a significant amount of money to you in the long run. Are you willing to put that much of your financial future into the hands of a listing agent who doesn’t fill in the lake name or the acreage search field? Are you willing to put your financial future into the hands of an agent who fills out the MLS remarks with something along the lines of “subj to short sale approval. commission 50-50” and no mention of the professionally finished walkout or the custom kitchen or the heated pole barn. Are you willing to put your financial future into the hands of an agent you you have not met nor had an opportunity to interview, but an agent who only puts 1 or 2 photos in the MLS when we are able to put 25 photos in the MLS? If that agent is that sloppy or non-committed to getting the listing sold during the easy part of the transaction- inputting into the MLS- what kind of a job is that person going to do when it comes to the actual work of negotiating the short sale. And remember- that is a short sale with terms acceptable to BOTH the lender and seller.

Buyers- The Importance of a Good Buyers Agent

Sellers- The Nuts and Bolts of Selling Your Home

Sellers- Marketing Your Home

Buyers- Everything You Need to Know About Short Sales

Seach the MLS 

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