What Is The Right Listing Price For A Short Sale Property?

Last Week Bank Closings
Four banks were closed by regulators on March 11 and 12 last week bringing the total to 34 failed institutions this year. The Park Avenue Bank of New York, New York, The Old Southern Bank of Orlando, Florida, The Statewide Bank of Covington Louisiana and LibertyPointe Bank of New York, New York. The Park Avenue Bank, New York, New York, was closed by the New York State Banking Department. The New York State Banking Department appointed The FDIC as receiver. The Florida Office of Financial Regulation closed Old Southern Bank, Orlando, Florida. The FDIC was appointed as receiver. The FDIC entered into a purchase and assumption agreement with Centennial Bank, Conway, Arkansas, to assume all of the deposits of Old Southern Bank. The Louisiana Office of Financial Institutions closed Statewide Bank of Covington, Louisiana. The FDIC as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Home Bank, Lafayette, Louisiana, to assume all of the deposits of Statewide Bank. On March 11th The New York State Banking Department closed LibertyPointe Bank of New York, New York. The FDIC was appointed as receiver. The FDIC entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey, to assume all of the deposits of LibertyPointe Bank.

What Is The Right Listing Price For A Short Sale Property?
Forget about what you learned in realtor class. If you price a short sale the same as other listings, you will be pricing it wrong. On a regular listing, you would rather err on the high side. On a short sale the opposite is true. When trying to find the right listing price for a short sale listing, the first order of business is to determine the fair market value. In determining the right listing price for a short sale you need to first concentrate on the actual property. If the property is in need of repairs, this may require contacting contractors to assess needed property repairs. Remember, all short sales are sold "As Is" so the property repair estimates are used to help determine value only. The FMV is the correct price for a short sale listing and not higher. Pricing a short sale listing higher than the FMV may haunt you later in trying to move a short sale offer to the closing table.

A lender's negotiator must make the decision whether an offer is worthy of ordering a BPO (Broker's Price Opinion.) The listing price is one item the lender's negotiator may look at in order to roughly calculate the NPV (net present value) on the short sale. If the lender negotiator's estimated NPV is too low which in this example is based on the listing price, the negotiator likely will decline the short sale offer and not order a BPO. Remember, BPOs are not free. A negotiator may elect not to waste a BPO on what looks like a lowball offer. If the negotiator elects not to order a BPO and denies a short sale due offer due to a low NPV, this may have been avoided if the listing price was priced correctly. Bottom line, do not overprice a short sale listing.

Close more short sales.
If you are listing agent or a broker who wants to speed up the short sale process, the best way to do this is to have the short sale experts negotiate your short sale listings. Bill Burress at Timothy J Cotter, PA can help you get your short sale listings to the closing table. Timothy J Cotter, PA offers a short sale negotiating process that is no cost to realtors and realtors keep their commissions.


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Short Sale Expert Tips Newsletter

High Unemployment Means More Short Sale Opportunities
The new jobless figures were released this past week as Harry Reid reported, "....Only 36,000 people lost their jobs today....." Joblessness is a large contributing factor to mortgage defaults. With unemployment being high, many families are just hanging on. More defaults equals more preforeclosure sales. Are you ready for the increase in short sale listings? What are you doing to get your share of the short sale market? Listing agents can no longer afford to ignore short sale listings because they are such a significant portion of the market.

Harry Reid Jobless Report Video


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Last Week's Bank Closings
Last Friday regulators shuttered banks in Florida, Illinois, Maryland and Utah. The FDIC took over Sun American Bank, based in Boca Raton, FL, Bank of Illinois in Normal, IL, Waterfield Bank in Germantown, MD and Centennial Bank in Ogden, Utah. First-Citizens Bank & Trust Co., in Raleigh, N.C., has agreed to assume the assets and deposits of Sun American Bank and to also share losses with the FDIC on $433 million of the failed bank's loans and other assets. Heartland Bank and Trust Co., in Bloomington, IL, is acquiring the assets and deposits of Bank of Illinois, and is also sharing losses with the FDIC on $166.6 million in loans and other assets. No buyers were found for Waterfield Bank and Centennial Bank. The FDIC has set up a new savings institution for depositors of Waterfield Bank that will operate until April 5th. This will allow customers access to their deposits and also gives them time to open accounts at other banks. The FDIC approved the payout of Centennial Banks depositors and the checks will be in the mail on Monday, March 8th. Zions First National Bank in Salt Lake City has agreed to accept Centennial Bank's direct deposits.

FDIC officials have stated that the pace of bank seizures this year is likely to increase in coming months.

One Rule On Piecemealing Short Sale Documents
If you want your short sale to close, do not piecemeal short sale documents. Always make sure you have a complete short sale package before sending it in to the lender. Incomplete packages will likely get set aside without any alerts to you or the seller that the package was incomplete. This is one reason days, weeks and months can go by on a short sale. At most lenders, there is a customer service or phone center receiving realtors, sellers or AOs phone calls. This is a very efficient idea from a lender's perspective as it keeps the negotiators working on cases without having to field the pesky update inquiry phone calls however the nature of this beast is the increased likelihood of a communication breakdown between the negotiators and customer service areas.

Case in point. An incomplete short sale package arrives. The first level negotiators or admin does not realize the package is incomplete. This happens quite often because this personell are usually trained to glance at documents to verify there existence rather than actually examining the documents for accuracy. Here are some actual packages I have received while working for Timothy J Cotter, PA and as a short sale negotiator working for a large mortgage servicer: Four pay stubs included but they are not recent. Bank statements were faxed but pages 2 and 4 are missing on each month's bank statement. 1040s were included but schedules were missing. Only one year 1040 included when two years are needed. Pay stubs were missing because the seller is unemployed but there is no easy to find documentation of job status in package. Hardship letter is provided but the hardship letter is not up to date. These files have a very high chance of being set aside without the listing agent being notified. Of course, the ramifications of incomplete short sale packages are lose-lose.

At Timothy J. Cotter, PA, we have a comprehensive document that we provide to our realtors we have the experience to anticipate when additional support documentation will be necessary to get the short sale processed. Before submitting a short sale package, we cannot rely on a lender representative to tell us what documents are necessary due to the chance for error. The lender representative may have not taken into consideration what investor the defaulted mortgage has and they more than likely did not take into account the specifics of the particular file being inquired about. By the time the misinformation is discovered a short sale may be lost.

Professional Courtesy
Did you hear about the lawyer on vacation whose sailboat capsized in dangerous, shark-infested waters? He surprised his traveling companions by volunteering to swim to the far-off shore for help. As he swam, his companions were startled by the appearance of two dorsal fins -- great white sharks, heading straight toward the lawyer. To their surprise, the sharks allowed the lawyer to take hold of their fins, and escorted him safely to shore. When the lawyer returned with help, his companions asked him how he had managed such an incredible feat. The lawyer answered, "Professional courtesy."



This lawyer joke is an old one and I am using it to illustrate a point. The point is, the punch line, "Professional courtesy." Did you ever try to communicate with a foreclosure attorney as a realtor? If you have, your experience may have been less than desirable. That's assuming you were given a return phone call. Of course law offices should return phone calls to realtors promptly. Many don't, especially considering their heavy case load these days.

Working for the law office of Timothy J Cotter, it never ceases to amaze me of how quick I receive return phone calls from foreclosure attorneys no matter how busy they are simply because I work for a law firm. They have shown me "professional courtesy." I'd like to ask you, if you are not using a law firm to negotiate your short sales, why not?


Close more short sales.
If you are listing agent or a broker who wants to speed up the short sale process, the best way to do this is to have the short sale experts negotiate your short sale listings. Bill Burress at Timothy J Cotter, PA can help you get your short sale listings to the closing table. Timothy J Cotter, PA offers a short sale negotiating process that is no cost to realtors and realtors keep their commissions.


Click This Video Icon To Watch

[Click here for an informative video regarding the short sale negotiation services of Timothy J Cotter, PA]



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Lawyer joke source, lawlaughs.com. shark picture source, news.com.au.

Understanding The Log Jam In Short Sales

When approached by realtors who are trying to negotiate their own short sale listings, I ask, "How's that working for you?" and their responses are like watching a fish flopping around out of water. Their stories vary but they all have a common theme. Days go by, weeks go by, months go by and still no decision from the lender.

Of course there is no decision. The short sale procedures and processes set up by the lenders, mortgage servicers and mortgage investors inadvertently can chew up realtors who go it alone and spit them out. I've seen grown men weep and I have heard veteran realtors vow to get out of real estate after trying to negotiate their own short sale listings.

Now, your short sale listings are important to you because they are your livelihood. If they don't close, you don't get paid commissions. I have worked as a short sale negotiator for one of the largest mortgage servicers in the country. With this experience comes the knowledge that helps get decisions on your short sale listings. Despite how important the short sale packages are to you, if you understand more of what happens on the lender side of the short sale, maybe some of it will begin to make sense. Now, the truth sometimes hurts but the truth is...You are just another realtor with just another short sale and at the lender's loss mitigation department, it's just another day. You are not important to the lender nor are your short sale listings. You are just a number and the lender has thousands of short sales like yours and is dealing with thousands of listing agents just like you. To know that your short sale packages are just sitting at some office gathering dust with little hope of seeing the closing table should feel rather nauseating.


Here is a common scenario of a lender or mortgage servicer's loss mitigation short sale department. The lender's or mortgage servicer's short sale department is overworked and under staffed. Each negotiator has been assigned more cases than humanly possible to get done. There is a six month back log of short sales and they are working on the cases in the order they come in. This is why you've heard horror stories of listing agents receiving a short sale approval after months tick by but the buyers have walked a long time ago. In cases where the buyer has walked, the process must start over, provided the listing agent finds another buyer. Now, you are trying to negotiate your own short sale listings and you need them to close when?


I went to the butcher the other day. The first thing I did was grab a number and waited for it to be called. We learned early on, when we go to the butcher we grab a number if we want service. Realtors trying to negotiate their own short sale listings have been conditioned by the loss mitigation short sale departments of the mortgage servicers and lenders to take a number and wait and wait and wait. The difference between the butcher and the lender is, at the butcher, your number gets called on time and a sale happens.

The law firm of Timothy J Cotter, PA, knows that waiting in line is not in our clients' best interest and the closings aren't likely to happen if we wait in line. We use our inside knowledge of the lender's short sale process, our knowledge of the mortgage investor guidelines, our experience and our professional contacts to help push the short sale packages through the system.



**REMINDER**

Realtors who are signed up with us and are using our negotiating services, don't forget to turn in the new FDIC document we have provided to you with every short sale package. If you have any questions regarding this form, please contact us. Negotiators for some lenders have been instructed by their managers not to process RASS without this document.


Close more short sales.
If you are listing agent or a broker who wants to speed up the short sale process, the best way to do this is to have the short sale experts negotiate your short sale listings. Bill Burress at Timothy J Cotter, PA can help you get your short sale listings to the closing table. Timothy J Cotter, PA offers a short sale negotiating process that is no cost to realtors and realtors keep their commissions.


Click This Video Icon To Watch

[Click here for an informative video regarding the short sale negotiation services of Timothy J Cotter, PA]



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The Coming Tsunami Of Short Sales_Are You Ready? (Video)

There is a huge wave of mortgage defaults building and it will hit the U.S. real estate market soon. With it we can expect nothing less than a Tsunami of short sales. A total of 3,957,643 foreclosure filings — default notices, scheduled foreclosure auctions and bank repossessions — were reported on 2,824,674 U.S. properties in 2009. This was a 21 percent increase in total properties from 2008 and a 120 percent increase in total properties from 2007, as reported by RealtyTrac.com. The report went on to show that activity was up 25 percent from 2008.

If you are one of the realtors left standing in this "market of doom," What are you doing to prepare for the heavy volume of short sales? If you're like many realtors I have spoken to, you are bemoaning the affects of the downturn of the recession and how it has killed your business. You may have got a taste of short sales and found them bitter. Well, listen up. Now it's time for the downturn in the housing market to pay you big dividends. The rewards are there for the taking but you must reach out for them.


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In order to best be prepared to handle as many short sale listings as you possibly can, you must first clear off your plate. Many realtors who decide to work on short sales find themselves getting bogged down in the drudgery and tedious tasks of negotiating and follow up with the lender. By clearing off your plate, I mean you can't afford to get bogged down in the negotiating tasks. This will free up your time to schedule more listing appointments and concentrate on marketing and sales. That's right, SALES. If you are a realtor, you are a SALESPERSON.


You might already be doing the math in your head, calculating how much extra time you spend on short sales. If this were 2005, you wouldn't be caught dead concentrating on short sale listings because you think they are too much work. Well, I have a double news flash for you. 1. It's not 2005, the regular real estate market is not hopping like it was in 2005 and 2. Short sales do not have to be a lot of extra work.

The economy has given realtors a bunch of lemons, MAKE LEMONADE!

Delegate the negotiations out to an experienced law firm that can handle your short sale listings and see them through to the closing.

Consider trying Timothy J Cotter, PA for your short sale negotiations but first I'd like you to watch this video report by 60 minutes that describes the Tsunami of mortgage defaults that are on their way. 60 minutes didn't really finish the equation by spelling out that we would be hit with waves of short sale listings. Of course, why would 60 minutes not make that connection? They don't get paid a commission for short sale closings.


Close more short sales.
If you are listing agent or a broker who wants to speed up the short sale process, the best way to do this is to have the short sale experts negotiate your short sale listings. Bill Burress at Timothy J Cotter, PA can help you get your short sale listings to the closing table. Timothy J Cotter, PA offers a short sale negotiating process that is no cost to realtors and realtors keep their commissions.


Click This Video Icon To Watch

[Click here for an informative video regarding the short sale negotiation services of Timothy J Cotter, PA]



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Does The Lender Want This Property To Go To Foreclosure?

"Unbelievable! Does the lender want this property to go to foreclosure?" Judy, the listing agent proclaimed as she placed her phone on it's cradle. She has been calling the lender twice a week for the past three months regarding the short sale and the lender's customer representatives continue to tell her "The package has been received but no decision has been made." Sound familiar? Judy is now convinced that the lender just wants the property to go to foreclosure sale. What is most frustrating to the agent is the purchase offer came in above the market value and it's not getting the the time of day from the lender. What is really going on here?

What happened?
The truth about this case is the lender really doesn't have an opinion about whether the case should go to foreclosure or short sale. The lender doesn't have an opinion one way or another because no one at the lender's short sale office has reviewed the package to see if the offer is good. Unfortunately, for all parties, ten minutes after Judy's phone call to the lender, she received a call from the selling agent who told her the buyer just walked. Too much time transpired and the buyer got cold feet and found a different home that was listed with a different agent.

The listing agent's time was ineffective with her lender follow up.
Wait one minute. Judy is on top of her game. She did exactly what she thought was the best course of action with short sales. She was diligent with her follow ups. Judy verified and re-verified with the lender that all of the documents were received. She contacted the lender at least twice a week for three months. Did the lender lie to Judy? Not really. Judy had been talking to a customer service representative each time she called. The customer service representative probably checked the fax server or perhaps their log which is kept on each borrower each time Judy called. In doing this, the representative saw that the documents had been received. Judy was ineffective in her follow up because she failed to motivate the lender to move the short sale forward. To sum it up, Judy was not firm enough with the lender. Perhaps she was too gullible in believing the lender's canned rhetoric.

This case proves once again that "Time is Money!"
Judy lost the short sale. Judy is crushed by this news. She keeps replaying in her mind everything she did and she wonders what she could have done that could have possibly resulted in a closed deal. To make matters worse, the listed property will be sold at sheriff's sale.

This lost time could have been used elsewhere
How much extra time did Judy spend on this short sale that never closed? How much additional commissions could Judy have made if she would have spent that wasted time on other productive tasks in marketing and sales? Judy thinks she has learned her lesson well. Judy has decided not to ever list another short sale again. She feels short sales are a big waste of time. Short sales may indeed be a big waste of time if not handled properly. There may be a better answer for Judy.

What could Judy have done to avoid this disaster?
There is a Tsunami of mortgage defaults on its way and Judy will be missing out on many listings if she stays out of the short sale game. However, if Judy continues on the path she is on with short sales, few of her listings will ever close.

There are two options for realtors who want to be in the short sale arena:

1. A realtor can become a short sale negotiator and negotiate all of their short sale listings

2. Let the professionals negotiate short sales for them.

If a realtor decides to negotiate their own short sales, they should ask themselves if they are a "realtor" or a "short sale negotiator." There are some realtors who negotiate their short sales quite effectively but despite their talents, they have a price to pay. The time they spend negotiating short sales is time taken away from their realtor duties. Why not let a professional negotiate the short sale listings? Judy would love to hand the short sale off to a professional short sale negotiator but times are tough right now and she heard that short sale negotiators cut into your commissions. There is one professional short sale negotiator service that does not cut into the realtor's commissions. They don't charge the buyer nor the seller. They get paid when the transaction closes and they are paid by the lender. The short sale service is provided by Timothy J Cotter, PA and they negotiate short sales nationwide.

Close more short sales.
If you are listing agent or a broker who wants to speed up the short sale process, the best way to do this is to have the short sale experts negotiate your short sale listings. Bill Burress at Timothy J Cotter, PA can help you get your short sale listings to the closing table. Timothy J Cotter, PA offers a short sale negotiating process that is no cost to realtors and realtors keep their commissions.


Click This Video Icon To Watch

[Click here for an informative video regarding the short sale negotiation services of Timothy J Cotter, PA]



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Do You Know Who's Your Biggest Enemy In Short Sales?


If you were to ask ten realtors who's their biggest enemy in short sales, you would probably return with ten different answers. The answers would vary because of their individual experiences in short sales but like the best designed exams, only the "most correct" answer scores.

The answer is FATHER TIME.
Time will kill short sales more than any other hurdle in the short sale process. Too much time goes by and the buyer walks. Too much time goes by and the seller gets discouraged and loses interest in selling. More time goes by and the property ends up going to sheriff's sale. But what can you do to speed things up and get to the closing table?

I could write a book on ways to work more efficiently in short sales but that's another day. What I would like to do is leave you with a gem or two that might help you become more successful with your short sale listings.

Convey a sense of urgency.
To move the short sale process along, be sure to convey the sense of urgency to all parties. This is not sales hype. By conveying a sense of urgency with a short sale listing, you definitely are not creating a false sense of urgency for a product just to get the sale. If there ever was a list of non perishable products with shelf lives, short sales would be at the top of the list. You really have a limited amount of time to complete the short sale. When the clock runs out everyone loses.

Remind the sellers of the timeline and volunteer to help.
When working with a seller on a short sale, you must stress to them the importance of gathering the necessary documents early on. Remind them of the time window everyone is working in. You can nudge them along for example by setting a time you will return to pick up the documents. You can volunteer to help them get the required documents. Help them write their hardship letter. The writing of the hardship letter may be the hardest thing for the seller to do for several reasons. Some are not good writers. They also may be resistant to writing the letter because of their emotional stress associated with their hardship. You'd be surprised how relieved some sellers will be to hear you volunteer to help with this simple task.

Necessary Support Documentation.
What documents are needed from the seller? Bill Burress at Timothy J Cotter, PA has prepared a document checklist and makes it available to the realtors who use Timothy J Cotter, PA to negotiate their short sales. Timothy J Cotter, PA is a real estate law firm that negotiates short sales nationwide in all fifty states. The document checklist they provide is a comprehensive list and it was compiled with the premise that it's far better to obtain more documentation at the beginning than you need rather than have too little documentation in the end. For instance, did you know that short sales that have mortgage insurance on the existing mortgage will require more documentation than short sales without MI?

Remember, it is much easier to obtain all of the support documents from the seller when the property is first listed and the seller is motivated than it is trying to chase the necessary documents later.

Continue to push with a sense of urgency.
When working with selling agents, always push for them to get the purchase contract and other required documents as quickly as possible. They will thank you at the closing table. If you have the sense of urgency with every task you undertake in the short sale process, you will soon be on your way to having successful short sale closings.

Close more short sales.
If you are listing agent or a broker who wants to speed up the short sale process, the best way to do this is to have the short sale experts negotiate your short sale listings. Bill Burress at Timothy J Cotter, PA can help you get your short sale listings to the closing table. Timothy J Cotter, PA offers a short sale negotiating process that is no cost to realtors and realtors keep their commissions.


Click This Video Icon To Watch

[Click here for an informative video regarding the short sale negotiation services of Timothy J Cotter, PA]



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