Agent Short Sales Success

If there was ever a time in the Real Estate business where learning a new skill could prove to be a life saver, then this is the time. With the virtual wave of foreclosures hitting the already over-crowded market, the prospect of Realtors and Brokers having their own income take a hit is a very real possibility.

If someone where to show you how to basically recession proof your business by learning the right way to work Short Sales for your clients, would it get your attention? Before you get too excited, in the spirit of “full disclosure,” you should know that working Short Sales is just that; work! There is nothing short about the process, but knowing how to work them just could keep enough money rolling in to survive this latest Real Estate cycle.

My name is Clyde R. Goulet and I’m uniquely qualifies to speak and write on the subject of foreclosures because I survived one myself. I even wrote a book about it and give away far more copies then I sell.

The very grim reality here is that regardless of where you are in the country, the amount of foreclosures filed has gone through the roof. If you combine this fact with falling market values in some areas of the country and you have a recipe for a disaster in the real estate industry.

Now, if this was not enough bad news, when you take into account that the banks and mortgage companies that have already completed the foreclosure process on many properties now have an inventory of foreclosed homes. Couple this with the property owners that have given their properties back to the banks via a “Deed in Lieu of Foreclosure” and you have another flood of distressed properties hitting the market. If you are a property owner needing to sell, be prepared to wait a while.

The question of what Realtors, Brokers, and even Mortgage Brokers can do to keep earning a living comes up. Helping distressed property owners through the Short Sale process could be just the thing to do. Not only do you help a property owner out from under their debt, you can still earn a commission as well.

I know what you’re thinking. If the property owner is in an upside down position with their home, how could they afford to pay a commission? The good news is the banks and mortgage companies pay the commissions from their closing proceeds. Their approval of a Short Sale allows for the real estate commission to be paid from the funds generated from the sale.

For those not familiar with how the Short Sale process works, here is a brief description. It is a process that a borrower goes through where the bank or lender agrees to take less than what is owed on the property in order for the property to be sold.

When a property owner cannot sell their property by conventional means and has fallen behind on their mortgage payments, there are remedies available through their lenders. Besides the Deed in Lieu of Foreclosure, Forbearance Agreements, & Loan Modifications, the Short Sale becomes the only option for many.

Whether it be a huge bump in interest rates causing higher monthly payments, job loss, sickness, divorce, job transfer or any other reason, sometimes bad things happen to good people. As a Real Estate professional myself, our jobs are to represent our clients and customers to the best of our abilities.

Being a national expert in the Short Sale process resulted in many trials and many errors, but the process can be learned as it is in fact a step by step process. Once the property owner or their representative has alerted the bank that they are requesting the bank to Short Sale the property, either a package of paperwork is sent to the borrower or instructions are given to the representative to collect various documentation on behalf of the property owner.

Part of this package of information includes but is not limited to some of the following documents:

-Personal Financial Statement

-Copies 2 Months worth of bank statements

-Copies of Last 2 pay stubs

-Any W-2 income or evidence of other income

-A “Hardship Letter” giving the reasons why you are requesting the Short Sale

-Listing agreement with a Realtor

-Signed Purchase & Sale Agreement

-Estimated HUD-1 closing statement showing what the lender will “net”

-Buyer’s pre-approval letter (sometimes)

The above are the basics, some lenders require much less and other require more. Much depends on the size of the loan balances and whether the mortgage is a first of junior or second mortgage. It really is a case of just about every lender having different rules for the Short Sale process.

If you haven’t figured it out by now, you should know that this Real Estate mess is going to be around for a while and if you want to stay in the game and continue to make a living in a very tough market, I suggest you arm yourself with the skills you need to survive. I have always felt that if you are not keeping up with the changes in your business, you are falling behind. Help yourself and at the same time help others. Working with Short sales can help accomplish both objectives.