Short Sale Presentation

Short Sales: What The Banks Want From You & The Power of Being a True Specialist : 

Maggie Moore Phone: (916) 201-3949 Email: Moore.Maggie63@gmail.com Website: www.maggiemmoore.com www.theshortsalescene.com Office Address: 9245 Laguna Springs Dr. #200 Elk Grove, CA 95758 Short Sales: What The Banks Want From You & The Power of Being a True Specialist

Slide 2: 

Short Sales: The Power of Being a True Specialist

The Power of Being a True Specialist : 

The Power of Being a True Specialist …Starts with: Knowing you are the right person for the job! Cooperation from a client is easier to obtain when they believe they need you, which in realty, they really do need you. Part of being a true specialist is to follow these two rules: Educate yourself. Learn and keep learning in order to become an expert. If you don’t know the answer…don’t give an answer. Tell them you will get to them with the answer.

The Power of Being a True Specialist : 

The Power of Being a True Specialist The Short Sale process helps lenders limit losses and helps homeowners facing real difficulties get out from under loans. For the process to work as it should, the participants, particularly the homeowner and the Short Sale Professional, need to conduct themselves with honesty and integrity.

The Power of Being a True Specialist : 

The Power of Being a True Specialist This is when you experience the boost that occurs when it’s clear the client knows you are the best person for the job – A Short Sale Professional. When you are reviewing the details of the prospective client’s situation, you will be answering questions others were unable to answer. In the course of qualifying the prospective client as a possible Short Sale, you are selling yourself without any selling effort. Through your knowledge you are building trust with the prospect.

Do You Really Want the Hassle? : 

Do You Really Want the Hassle? Working Short Sales will requires lots of special skills - From understanding how to read title documents, to developing a negotiating style that works with loss mitigation, and a ton of things in between, you need to do work to build your skills. Short Sale Deals – Lots of Up Front Work - You need to review lots of documents to verify you have an approvable Short Sale. The effort on a Short Sale is heavily front loaded. Many Buyers and Selling Agents Steer Away From Short Sales - You have a property that is tougher to sell. Then, the Lender wants retail plus.

Do You Really Want the Hassle? : 

Do You Really Want the Hassle? Transaction Delays – Almost Always Beyond Your Control - Even when you have provided a great file on a real hardship there is a good chance you will experience frustrating delays. Short Sale Deals Fall Apart – Often. - Sometimes due to Loss Mitigation and sometimes due to market ignorant responses from the Lender, Short Sale deals come apart frequently. You Get Abused…and Abused….and Abused. - Not every transaction will shower you with abuse, but expect to be abused if you plan to do Short Sales.

Does Your Client Have a Hardship? : 

Does Your Client Have a Hardship? The lender is looking for some sort of special circumstance or hardship that has developed since the loan was originated. Examples of hardships: Job Loss Illness or Injury Divorce Job transfer Significant Reduction in Income Family Crisis

What The Bank Wants From You : 

What The Bank Wants From You The Listing: Pricing the property for Sale: list at Fair Market Value in the property’s “As Is” condition by running a comparative market analysis (CMA) including the estimated repair costs and document the condition of the property for the justification of the listing price. Price at the low end of 3 sold properties in the last 90 days. After 2 weeks, lower the price and repeat as necessary until you receive an offer. Review your State Statuses and time frames regarding the Foreclosure process in your area. The Foreclosure process will continue while the property is listed and even during negotiations of a short sale. Ask for a postponement of the foreclosure if a legitimate offer is pending. Do not assume the negotiator is aware of the pending foreclosure sale. Order a payoff for the first mortgage and second mortgage, if applicable, back taxes and past due city utilities, for clarification. Title company will do this for you and it will be part of your HUD.

What The Bank Wants From You (Cont’d.) : 

What The Bank Wants From You (Cont’d.) The Short Sale Documents: For each short sale, there will be required paperwork that must be obtained from the Seller. Start gathering this information as soon as possible, most Servicers will not consider offers without a full short sale package. Below are a list of required short sale documents: Listing Agreement with price included and comps to justify listing price. Purchase Offer Buyer’s Pre-Approval letter or proof of funds. Authorization to release information Financial Form

What The Bank Wants From You (Cont’d.) The Short Sale Documents (Cont’d) : 

What The Bank Wants From You (Cont’d.) The Short Sale Documents (Cont’d) Two years most recent tax returns. Two months most recent paycheck stubs. Two months most recent bank statements. Hardship Letter, Signed and Dated Completed Hud1 or Seller’s Net Sheet ~ Be as accurate as possible as any approval will be based, in part, on the figures submitted. Utilize your favorite title company to provide preliminary property specific information, if this is not possible use approximate figures gathered from the Borrower. If the homeowner does not have check stubs, taxes and/or bank statements have them write a statement to that fact and sign it.

What The Bank Wants From You (Cont’d.) : 

What The Bank Wants From You (Cont’d.) The Offer: Once you receive an offer on a property, you will discuss with the homeowner to either accept, deny or counter the offer. The Servicer will only entertain legitimate Offers to Purchase & unrealistic offers will be ignored due to the outstanding work load at the Servicers. Continue to actively market the property while the Offer is being reviewed under a Short Sale Contingency. If you receive another Offer, work up the estimated HUD 1 and compare it to the offer already submitted. If it is higher or better, have the seller accept it as a backup Offer subject to third party approval. Then Discuss with the Seller that it will start the process over. If the buyer backs out just as you receive approval the DOES NOT MEAN that you can tell the next buyer that you have a preapproved Short Sale. Always remember that Short Sale approvals are CONTRACT SPECIFIC.

What The Bank Wants From You (Cont’d.) : 

What The Bank Wants From You (Cont’d.) The Estimate HUD 1: An estimate HUD 1 must be prepared to reflect the current purchase price for each Offer. Be as accurate as possible as any approval will be based, in part on the figures submitted. Have your Title Co or Attorney provide the estimated HUD 1 and a Preliminary Property Report if possible. If you determine you do not want to run the risk of incurring the fee for the PR at this time, check with the Title Co to determine if they will do a search and reveal any liens or issues to you verbally. The HUD 1 Must coincide with the Offer regarding: a. Dates b. Fees c. Names d. Do not add fee’s not generally paid e. Never have Credits to the Seller on the Estimated HUD 1 during negotiation of the Short Sale f. The Seller may not receive any net proceeds

What The Bank Wants From You (Cont’d.)The Estimate HUD 1 (cont’d) : 

What The Bank Wants From You (Cont’d.)The Estimate HUD 1 (cont’d) The following fees will generally NOT be paid: Repairs, because property is Sold "AS IS" Inspection Fees, Pest Inspection Fees, Pest Repairs Fees normally paid by the buyer including tax service fees. Survey costs Junk fees Utility bills/Unless a Lien on the property Buyer closing costs in excess of 3%. Fees The Servicer (Bank) Will Consider Paying: Property Taxes Owners Title Policy County Documentary Transfer Tax (if applicable) Escrow Fee Commission (May be reduced and is negotiable) Junior Lien Holders (Must be negotiated and shown on the HUD for release)

What The Bank Wants From You (Cont’d.) : 

What The Bank Wants From You (Cont’d.) The BPO/Appraisal: In an attempt to establish value and expedite the short sale process many Servicers will order a BPO/Appraisal when either the Listing or the offer is received. Meet the appraiser or BPO agent at the property to submit or discuss comps or value. Do not interfere with the process. Try to contact the Servicer and confirm they have received the offer. (Communication is essential!)

What The Bank Wants From You (Cont’d.) : 

What The Bank Wants From You (Cont’d.) The Negotiation: When you receive a counter offer from the servicer, the buyer’s response must be in writing and accepted by the homeowner. An updated HUD 1 reflecting the counter offer price, must be prepared and sent in. If there is a second mortgage on the property, you must negotiate the approvals and releases with the second, as with the first mortgage servicer. (Use your negotiation and sales skills!) Get a “feel” for the cooperation level of the second Lien holder before you have to spend a lot of time and energy on the negotiation with the first mortgage or Sir Lien holder. If the Second Lien Holder will not release for an amount acceptable to the Sir Lien Holder, the property will be foreclosed on removing most Jr. Liens from the property.

What The Bank Wants From You (Cont’d.) : 

What The Bank Wants From You (Cont’d.) The Demand/Approval Letter and Final HUD 1: Usually, once you receive the Approval Letter, you forward it to the Title Company. Approval letters or release letter must be submitted for all loans. NONE OF THE NUMBERS CAN BE CHANGED AT THIS POINT! The HUD 1 is faxed back to the Servicer(s) to review and approve. A second lien holder who has issued a release must also be sent the same final HUD 1 to review and approve. ONLY after the Servicer(s) has approved the Final HUD 1 are you authorized to close.

Winning Over Loss Mitigation : 

Winning Over Loss Mitigation Checklist: Give Them a Killer File including: A Hardship Letter with Supporting Documents Review the Documents Put a Loan Number on EVERYTHING Request an ‘Interior BPO’ After Submitting Short Sale Package The Trial HUD statement (Lender net sheet) always review before submitting to Lender.

Winning Over Loss Mitigation:Giving a Killer File : 

Winning Over Loss Mitigation:Giving a Killer File When collecting the documents you need for a Short Sale File take extra care to put together a great file. File Checklist: Make sure all documents are easily legible Separate each section with a tab Include a cover letter which outlines the entire file. Your client’s Hardship Letter will tie your Short Sale package together.

Winning Over Loss MitigationGiving a Killer File: Hardship Letter : 

Winning Over Loss MitigationGiving a Killer File: Hardship Letter Make sure to attach any documents, receipts or notices that support the hardship. 3 Basic Elements of a Hardship Letter: An Apology: - I am sorry to be asking you to discount the amount owed A Story: - An outline of circumstances that have led to the Borrowers inability to stay current on their Mortgage A Statement: - A clear, unequivocal message that the Borrower has exhausted all options, and if the Short Sale is not approved, foreclosure is the next stop

Qualifying the Deal : 

Qualifying the Deal To avoid the withholding requirement, the Seller will need to complete both California State Tax forms below which are found at the Title Company. The 593-C A checklist form for the Seller to complete regarding possible exemption from tax withholding The 593-E Computation of Estimated Gain or Loss. This worksheet will help the Seller with ‘how to answer questions’.

Join GMAC! : 

Join GMAC! At GreatWest GMAC Real Estate, with our 95% customer satisfaction, we are building a business that outperforms traditional real estate models and gives our Real Estate Agents the tools they need to succeed. We have all the tools and more to succeed, including a 6 MONTHS FREE program led by industry expert Bill Fields and a team of experienced coaches to help you achieve far greater levels of success, happiness and fulfillment. Click Here to see what GreatWest GMAC has to offer!

THANK YOU : 

THANK YOU For Giving Me the Opportunity To Teach the Fundamentals of Short Sales. Maggie Moore Phone: (916) 201-3949 Email: moore.maggie63@gmail.com Website: www.maggiemmoore.com Office Address: 9245 Laguna Springs Dr. #200 Elk Grove, CA 95758