Qualifying The Short Sale Seller

Yesterday I got a referral to a Short Sale seller. The agent who referred her was not familiar with Short Sales and thought I could help. I called the seller. The phone conversation went like this:

Wendy: "Why do you need to sell the house?"

Seller: "It is really too much for me."

Wendy: "In terms of...?"

Seller: "The market value has declined and we pay too high a mortgage. We can rent a house like ours for less, and I want a different house."

Wendy: "Can you afford your mortgages payments?"

Seller: "Yes."


Wendy: "You don't have a hardship. The Short Sale lender will only approve a sale where there is a legitimate hardship and inability to pay."

I proceeded to go over her income and expenses and we found she had about $700 extra per month after paying bills. It is prudent to qualify our sellers before we take a Short Sale listing.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Selling Real Estate on the Emerald Coast of Florida: Destin, Fort Walton Beach, Navarre, Niceville, Santa Rosa Beach and vicinity. Call 1-877-487-9639.
www.ShortSaleForeclosureHelp.com
www.RulnickRealty.com

Keep Short Sale Buyer Agents Happy!

Are you a Short Sale listing agent? If so, you know the importance of having those buyers hang in there for three, perhaps four months after submitting an offer to the Short Sale lender. It is critical to keep their selling agents in the loop with frequent updates, and a "team" approach to getting the sale approved. That way, there will be a higher chance that they inform their buyers and help them remain dedicated to the purchase.

One tool I that use is to ask the buyer's agent to contact me at least once a week with an update request and also to "tickle" me to call the Short Sale lender. Although I schedule lender calls with my own software, sometimes I get busy, and I welcome an extra reminder from an interested agent. This approach makes us teammates in the grueling Short Sale approval process, and I've had nothing but positive results.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

www.ShortSales-EmeraldCoast.com

www.RulnickRealty.com

Short Sales: "One" Strong Contract = Success

I get calls daily on my Short Sale listings from agents who think I send multiple signed or unsigned offers to the Short Sale lender with equal position. That is- like an auction. Well, I don't. Per my MLS board approval, I leave listings active with the comment: "Contingency contract, bring your back-up offer". That means, an offer with a clause stating it will go into effect only if the primary offer is withdrawn or otherwise cancelled. Most agents in my area don't operate that way. I get resistance to my method with frequent comments, "That's not how it's done." "We don't do it that way!". But it works. and I'll tell you why.
First, I carefully screen buyers under consideration from my Short Sale seller who have presented an offer. I ask their agent:

"Is the buyer willing to wait 120 days to close?"

"Does the buyer have the means and interest to make any necessary pre-closing repairs?"

"Does the buyer realize the bank may make a counteroffer depending on the appraisal, and if so, is the buyer interested enough to possibly increase his offer or better his terms at that point?"

The answer must be "Yes" to each question for me to recommend that my seller proceed.

Second, if the offer price is not within a realistic range of market value, I encourage my seller to counteroffer. Why? We don't want to waste time dedicated to an unrealistic contract that ties up the property.

Thus, if the buyer meets those qualifications of intent, means, desire, and realistic pricing, there is a strong chance the offer will be approved. I have already pre-qualified my seller as to hardship and financial circumstance. I have found a high success rate with this method. Give it a try.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

http://www.shortsaleforeclosurehelp,com/ or http://www.shortsales-emeraldcoast.com/
http://www.rulnickrealty.com/

Short Sale Advice: Realtors and Sellers

Yesterday I had one of my Short Sale sellers email me, "Wendy, I think Sue told you that we were served with foreclosure papers a week or so ago, and we need to file a response by early next week. Is there a file number or reference number and dates that we can include in our response to prove that we are in a negotiation for a short sale? Also, is there anything that we would need to include in our response? ".
I asked an attorney how I should respond to inquiries like these from Short Sale sellers who don't want to hire a lawyer. He said:
"If they are served then they really have to get to an attorney. If you advise them otherwise or help them prepare responses then you could be liable for damages they sustain and practicing law without a license. There is also a recent law that may apply that could entitle the person losing their house to $15,000 damages judgment and attorney fees if they can categorize you as acting outside the scope as a Realtor and promoting foreclosure relief... especially dangerous for Realtors if they are not arms length with the buyer or can be shown to coerce a sale, etc."
Good advice.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
www.ShortSaleForeclosureHelp,com
www.RulnickRealty.com

"Thank You"

Re: 164 Shoreline Dr. Mary Esther, FL 32569
Dear Wendy,
I am writing this to thank you for all of your hard work in getting the above mentioned short sale property to closing. When I referred the listing to you, I had exhausted all of my efforts in trying to sell the property while it was in a delinquent status. I was actually at the house when foreclosure papers were being served. I was afraid the sellers were going to end up losing everything before we could get it sold. It was very stressful! You were amazing with all your efforts! The fact that you worked as hard as was needed to negotiate with the lenders was exceptional. You had such patience with everyone to include the lenders, the sellers, and the buyer's agent. In the meantime you still took the time to make sure I was kept posted on the transaction every step of the way. It definitely took your skill and expertise with "short sales" to get the property sold and most importantly gets it to closing! If the situation ever arises again, I will certainly refer the business to you!
Warm regards,
Marno Wilson, Realtor

Call Wendy Rulnick, Rulnick Realty, for all your SHORT SALE needs on the Emerald Coast of Florida: Destin, Fort Walton Beach, Santa Rosa Beach, Seagrove Beach, Navarre, Niceville and vicinity. Call 1-877-487-9639 or 850-650-7883

www.RulnickRealty.com
www.ShortSaleForeclosureHelp.com

My Buyer is Getting "Restless"

Yesterday I received an email from a selling agent for one of my pending Short Sales. The offer has been at Countrywide for about 75 days.

Buyer's Agent: Wendy, My buyer is getting very restless. We need some kind of update for him to keep him on the hook.

Wendy's Response:
Joe, These are the dates and actions:
Feb 21: Faxed package to Countrywide
Feb 22: Re-faxed package to Countrywide to make sure they got it
Feb 25: Called Countrywide to confirm package was received, they said it was
Mar 5: Called Countrywide, no action yet, said package in "review" would be assigned to a negotiator within 30 days
Mar 10: Called Joe to keep him up-to-date
Mar 17: Called Countrywide, file not yet assigned
Mar 21: Called Countrywide, rep said would send my status inquiry to Team Leader, file still not assigned
Mar 27: Called Countrywide, file assigned to a negotiator, may take 30 days for negotiator response
Mar 28: Called Countrywide, verifying file was assigned, they reiterated could take 30 more days for response
Apr 1: Negotiator from Countrywide called me to say she was assigned to the file, would call me when she had a chance to review
Apr 2: Appraiser went to the property
Apr 15: Called Countrywide, they said appraisal had been forwarded
Apr 21: Called Countrywide, they said due to volume, short sale department was being restructured, could take two weeks to restructure, also informed that a different negotiator had been assigned to the file now
Apr 29: Called Countrywide, requested the negotiator call me with the status, the rep sent an email for the negotiator to call me, I also emailed the negotiator
May 1: Called Countrywide, told them rep hadn't called me, I was told they have 24-48 hours to respond, but they would send another email for her to call me

Joe, I have been working diligently, and will work diligently on the follow up and successful closing of this sale. Please reassure your buyer that I am doing everything I can do to speed them along. It is quite exhausting, but I have successfully sold numerous short sales. They are truly running 90-120 days due to so many people being in this situation. Tell your buyer "Thank You" for his patience, too!

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Niceville, Fort Walton Beach, Navarre, Mary Esther, Rosemary Beach, Dune Allen, Bluewater Bay, Shalimar, Mary Esther, Miramar Beach, Sandestin, Seaside and vicinity.
Call 1-877-487-9639 or 850-650-7883 ext 204

www.ShortSaleForeclosureHelp.com
www.RulnickRealty.com

Bank That's Never Done a Short Sale

Much of my Emerald Coast market is both resort and military. There are at least three air force bases in the Destin-Fort Walton Beach area, so I do a lot of real estate business with military members. One of my recent Short Sale listings used a local air force credit union for his second mortgage/home equity line. Well, I almost fell off my chair today when I found out I was the "FIRST" request they have ever had for a Short Sale.
I was making my standard call to notify the first and second lienholder that I had placed the seller's property on the market seeking a Short Sale. I caused a stir when I called the second, the military credit union, and asked what their standard Short Sale procedures were. I got a clue when the customer service rep asked me what a Short Sale was. I explained it briefly, then asked to be transferred to their Loss Mitigation department. She didn't know what that was, so I was placed on hold and eventually transferred to the mortgage department. This time I was not placed on hold, but could hear the conversation in the background, "She is NOT authorized on this account! She said she is calling for Loss Mitigation?". I had to admit, I had a big smile on my face. Finally, an authoritative-sounding woman got on the phone and said she was in charge of the real estate department at the bank. I explained what I was doing, and she confessed, "We have never had a Short Sale, maybe we've just been lucky." I would say! She told me she was not sure what to do in this situation, and asked if the first usually loses money, too? I told her always! (Well, almost). Anyway, I offered her my assistance and told her the procedures most of the big banks use, and even emailed her my checklist for sellers and short sale website www.ShortSaleForeclosureHelp.com. I also added I would be happy to assist her if her bank runs into any other situations with Short Sales. I've got to say, this is going to be interesting!

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or 850-650-7883 ext 204
www.RulnickRealty.com

AmTrust Short Sale Appraisals

I have a Short Sale in process with AmTrust as the first mortgage holder. Their appraiser recently went out, and boy, we have a problem. AmTrust Short Sale appraisal guidelines require the comparables to be within 1 mile of the subject in suburban areas. And, they cannot use foreclosures as comps. The situation is as follows:

Subject: 1400 SF basic house, built 2004, no garage, in neighborhood with many trailers and dirt roads

Offer: $172,000

Real Buyer Comps: Many homes four miles away in new subdivisions, more substantial, 1600-1800 SF, garages, selling in the $180's very recently

Problem: Appraiser cannot use those comps. Only sales in subject's neighborhood are an errant house on pilings that sold for $200,000 six months ago and some other odd-ball sales. Appraiser's forced value is coming in around $200,000

Solution: Appraiser is allowed to get a statement from his "peer" justifying the sale price. He contacted me, as a peer (I am a real estate Broker) and I told him,

"A buyer would not pay $200,000 for the subject property. Foreclosures are reasonable to use as comps in this market, because they are making the market. A typical buyer for the subject, who could afford it, would certainly pay in the $180,000's for a much more substantial home 10 minutes away versus the subject property. In conclusion, using comps that are four miles away is reasonable in the current market, as is using foreclosures."

The appraiser was completely sympathetic and frustrated he was not allowed to use realistic comps. He said I may be asked for a written statement down the road. I will be delighted to provide it.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or 850-650-7883 ext 204

www.ShortSaleForeclosureHelp.com
www.RulnickRealty.com

Aurora Loan Services: Short Sale Warning

I have had a Short Sale offer in process with Aurora Loan Services since December.

Facts:

The house, in Niceville, Florida, was listed for $183,000.

Offer was for $175,900. VA financing with seller total contribution of $3000 including doc stamps on the deed, a customary seller expense in Florida. Thus, the seller contribution to buyer's closing was only about $1700.

BPO (Broker Price Opinion) determined by seller's lender - $185,000.

Aurora counteroffers $185,000. Buyers stay firm at $175,900.

30 days later- today- Aurora says sale is "approved".

Receive approval letter. Aurora will pay $363 of the total closing costs, excluding a reduced broker fee.

I call Aurora. "VA will not ALLOW VA buyers to pay certain closing costs. You had the contract and the net sheet. The contract stipulated VA financing".

Aurora: "We don't pay closing costs."

Me: "Then the deal is going to fall through".

Aurora: "Sorry."

Warning: Although this lender only countered the purchase price, they omitted any mention of closing costs until the deal was "approved". Wish me luck saving this one!

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALE and FORECLOSURE work-outs on the Emerald Coast of Florida: Destin, Fort Walton Beach, Santa Rosa Beach, Seagrove, 30-A, Niceville, Bluewater Bay, Navarre, Crestview. 1-877-487-9639.
www.ShortSaleForeclosureHelp.com
www.RulnickRealty.com

How to Buy a Short Sale

Buying a Short Sale? What is the Process?

1. When you write your offer, your agent should insert language into the contract that states the contract is "Subject to seller's mortgage holders' approval". the contract that states the contract is "Subject to seller's mortgage holders' approval".
2. Often, lenders require Short Sale properties to be sold in "as is" condition, thus not threaten a potential closing with repair items. Language should be inserted into the offer in that regard, either with appropriate addendum, or added language.
3. The Seller may counter your offer. Remember, the contract is between you and the Seller, not you and the Seller's lender. The Seller does not want to submit an offer to the bank knowing it will likely be rejected and/or counter-offered because it is too low or has too many closing costs on the Seller's side. The lender pays these costs, and will always analyze its "net". In this case, it will be a "loss", so the lender wants to mitigate the loss as much as possible.
4. After the contract is signed and agreed to by both you and the Seller, it will be sent to the Seller's lender, or lenders if there is more than one mortgage holder. Documentation submitted with the contract includes an estimated net sheet, the Buyer's approval or proof of funds letter, the listing agreement, Seller's financial worksheet, recent paystub, recent bank statement, last year's tax returns and hardship letter.
5. The Seller's lender will then order an independent appraisal and/or Broker Price Opinion (BPO) of the subject property.
6. The Seller' lender will counteroffer your offer with the appraised value.
7. You will accept or counteroffer this amount. Your offer may ultimately be rejected if it is not at least 83% of the appraised value. This varies by lender. The lender makes it decision based on the requirements of the end-investor on the mortgage regarding price. For example, even though the "lender" may be Wells Fargo, the actual investor reaping interest may be the Bank of New York or Merrill Lynch. There may also be PMI or private mortgage insurance on the loan. In that case, the PMI company will also order a separate appraisal or BPO. Your offer must satisfy both lender's requirements. If there is a second mortgage on the property, the first mortgage holder will offer the second mortgage holder a dollar amount as a "buy out". I help facilitate these negotiations. Additionally, the lender(s) may ask the Seller for a cash contribution or promissory note. If the Seller cannot comply, you may be asked for additional monies to make up some of the difference. If the property is a good deal, you may wish to do so.
8. The timeline for initial response from the lender may be eight to twelve weeks. This is because lenders have an overwhelming number of sellers asking for Short Sales. Some of the bank "negotiators" have as many as 400 files at one time. They often work on the files facing imminent foreclosure sale dates first. Rest assured, I contact these lenders every two business days by phone and/or email to get updates on the offer.
9. After final approval by the lender, a "demand" or "approval" letter is sent out to the Seller. The letter will normally stipulate that closing must occur by the date stated in the contract, or there will be a per diem penalty for not closing on time. Thus, you are expected to have your mortgage, insurance and inspections completed in a timely manner. The per diem penalty is quite common in the corporate world.
10. The lender will expect to see a copy of the settlement statement at least two days prior to closing to ensure it is accurate, and matches what was stated in the net sheet that was submitted with the offer and on the approval letter.
11. Congratulations! Your patience has been rewarded. You got a great deal!
    

Wendy Rulnick, Broker, CRP, CRS, GRI ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURE work-outs on the Emerald Coast of Florida: Destin, Fort Walton Beach, Niceville, Navarre, Santa Rosa Beach, 30-A, Crestview, Seagrove and vicinity. 1-877-487-9639

http://www.shortsaleforeclosurehelp.com/

http://www.shortsales-emeraldcoast.com/

Email me at itswendy@rulnickrealty.com
Copyright Rulnick Realty, Inc.

New Short Sale Site

I specialize in Short Sales and Pre-Foreclosure workouts, and get many calls from sellers and other agents asking for advice and about the short sale process. Instead of emailing my information to each individual with explanations about short sales, I decided to create a new website, called http://www.shortsales-emeraldcoast.com/ and http://www.shortsaleforeclosurehelp.com/
I am adding information to the site on a regular basis, but in it you will find a plethora of information to enlighten you about short sales. Let me know if I can help.

Short Sale Time Frame

Our market will see more and more short sales in the coming months. Again, a short sale is when the owner of a property has a higher mortgage balance than the mortgage payoff, and sells for market value. Banks will sometimes forgive the rest of the debt in order to facilitate the sale if the seller has a hardship and cannot meet his obligation. This is a better option than foreclosure. As more of these properties flood our market, the backlog for lenders processing approvals has grown. Banks I have spoken with may have up to 400 files in process per "negotiator". So, if you make an offer on a short sale property, be prepared to wait for a response. Countrywide's average response time is now 43 days. They are hiring more people, but not fast enough to keep up with demand. Time your offer for a 60-day closing, but it is not unrealistic to assume it could be 90 days, or more.