Karla Leahy started an interesting discussion on www.ShortSaleSuperstars.com.  She asked “Do you inform the short sale lender when you no longer have an offer?”

From what I’ve seen the thought process behind not divulging the buyer walked is:

1. The lender will complete an appraisal or BPO that will speed up the next approval

2. The seller’s pre-qualification may be completed and ready for the next attempt

3.  With some lenders, you can sneak in a substitute buyer

Bottom line, it “saves time” for the next buyer, the one you hope closes.

BUT–  IS IT RIGHT TO NOT DISCLOSE THE BUYER WALKED?  Why should the short sale system be clogged because you are trying to speed up your next offer?  Is it right to allow the lender to continue to work on an approval when there is no longer a contract? Sometimes there is another twist on trying to speed up an approval.  “Fake” or “starter” offers are sent in to the lenders to get an appraisal ordered, when the “buyer” has no intention of closing.  The “buyer” might even be the real estate agent.

Some of the lenders have a few hundred thousand offers in process. HOW MANY ARE LEGITIMATE OFFERS?  The “real” buyers (and the sellers) suffer through longer wait times because others have tried to game the system, “dead” deals are being processed or offers with no hope for approval have been submitted.  If lenders were only processing contracts that could actually close, all short sales would be speeded up, right?

So, I ask “Would YOU call the short sale lender and tell them to stop working on the sale if your buyer walked?” 

 It’s Wendy!

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Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales

The post Do You Tell The Short Sale Lender “Buyer Walked”? first appeared on Rulnick Realty.

To take on a listing in this market, and any market, involves taking a risk. That is, a substantial business investment covering the cost “doing” business, which includes time, advertising, payroll, insurance, licensing, internet, phone, rent, etc. etc..  In a normal market, the calculated risk of the business investment is that the listing will most likely sell, and the burden of expenses will reimbursed, plus some business profit.    With a Short Sale, the risk is much higher.  Why?  The Short Sale lender may not approve the sale.  And the time investment to reap a return may be five times longer than a normal sale, reducing any profit if the sale is approved.

To lessen the key business risk of an unapproved Short Sale– both for me and my seller, I must control the Short Sale from start to finish.  Why?  Because I can:

• Assemble excellent lender packages personally reviewed by me
• Directly and immediately respond to negotiators’ calls and emails
• Immediately provide well-written market narratives and critical analyses proving price
• Ensure that appraisers and bank BPO agents understand the subject property’s challenges
• Immediately provide additional documentation required by the lender
• Keep the parties well-informed and in the deal
• Document all tasks in detail for transaction-saving reference
• Provide creative solutions to negotiators’ demands such as promissory notes and cash contributions
• Use twenty years of negotiations skills to ensure success

Can a third party do all this?  Perhaps.  But I know I can. If I pass along the critical Short Sale negotiation stage to a third party, my company’s business success is entrusted to others, as is my seller’s chance of approval.

The post Why I Negotiate My Own Short Sales first appeared on Rulnick Realty.

“As Is” Means “As Is”

I’ve been working a Countrywide short sale (one of many) in Navarre FL, and finally got approval yesterday.  The Countrywide demand letter stipulated closing within 30 days.  After weeks of the buyers’ agent asking for final approval, I am now told the buyers may not be able to close on time.  They want seven more days.  I got their extension approved by Countrywide, with a per diem penalty included.  Now the agent tells me the buyers are not sure they can do the VA-required repairs, and won’t order the survey and termite until they know what the repairs are.  I asked the agent, as she was told from the beginning of the deal, “The buyer understands that the seller will not do any repairs and the buyers will have to do them and the buyers have the means to do them, correct?”  This was reiterated and even stated in the MLS.  Needless to say, I’ve placed the property back on the market, pending resolution.  Next goal: Find a way to hand-pick the selling agent!

UPDATE:  Buyers are walking.  Although all terms in their offer were agreed to by Countrywide, and the contract was in full force, after two months of negotiations, they have simply changed their minds.  I told their agent it might be a problem getting back their earnest money deposit. (Buying a house is not like buying a big-screen t.v.)

FURTHER UPDATE:  The buyers changed their minds again.  They are buying the house.  Happy ending.

ACTION ITEM:  This office is requiring signed acknowledgments by buyer and selling agent regarding short sale steps and time frames on all short sale transactions.

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Short Sales: What’s The Hardship?

What are the hardships behind so many Short Sales? We’ve heard a few reasons on the news lately about why so many people can no longer afford their mortgage payments.  We’ve heard mainly “Not qualified to buy the home in the first place” ” Rate re-set to higher payment” “Scammed into getting mortgage”.  Well, in my area on the Emerald Coast of Florida, that’s not what I am finding from my Short Sale sellers. I did a quick study of 61 active or recently sold Short Sales from Destin and Santa Rosa Beach to Navarre, Crestview and Fort Walton Beach FL.  Here are the summarized hardships:

Loss of Income:          51

Job Transfer:               4

Medical:                       3

Divorce:                       2

Fraud:                         1

Most of my sellers lost their jobs.  Or they lost significant income due to the economy.  I have sellers who were in construction, building residential homes, laying tile.  They have little work. I have salespeople, from real estate to cars, who can no longer make it.  Some of the sellers had a combination of income loss and medical bills.  Several of them have been forced to move out of the area to find work.  A few are military, with no choice but to relocate when the Air Force orders them.  Should some of these sellers not have been able to quality for a mortgage? Were they over-leveraged?  Perhaps, especially with so many investment properties in my area.  But, overall,  loss of income is the crux of the problem.

The post Short Sales: What’s The Hardship? first appeared on Rulnick Realty.

Today I got a call from a short sale seller.  He already listed his house with another Realtor, but had read my blog and wanted to tell me about his scenario.  I think he wanted an “ear” to listen to his story, and give him some reassurances.  I was happy to oblige.  The gentleman had done a cash-out refinance on his house several months earlier- receiving about $15,000 back from the transaction.   Since then, his fortunes had plummeted, his roommate had moved out, and he could no longer afford his mortgage payments.  His mortgage was backed by FHA, and he told me his lender had given him an acceptable price at which the property could sell.  He got lucky, and now has an offer.  His short sale package is at the bank awaiting approval.  His fears were that he had taken out the $15,000 cash from the refinance, and that based on that, his short sale would not be approved.  He said his file was in line for review, and he wanted to “do the right” thing and write a letter stating that he would pay back the extra $15,000 in the form of a promissory note, as he has no savings. He asked me if I thought that would help his case.  Sure, perhaps the lender would approve his short sale without a promissory note, or perhaps they would reject the offer, or maybe they would ask for a lump sum payment.  But what he wanted to do, to make things right with his conscience and his personal code of conduct, was to pay back that money.  And that’s what he is doing.

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