Happy New Year!

Instead of a brand new blog this month I am re-posting an old one as I believe that it applies now more than ever!!!

What if this time you read it and took action? Would you be in a better situation this time next year? What is possible?

What if? Posted : June 7, 2011 1:45 PM | Posted By: Jim & Pam Sullivan Related Categories: I recently played a “what if” game with the realtors in our weekly mastermind group. It went something like this… What if there were tens of thousands, possible hundreds of thousands of homeowners in your market that desperately needed your help.

What if you had 27 proven methods to find these people that would not cost you anything but your time.

What if you had an expert that had successfully completed over 500 hundred similar transactions and this person was willing to talk with your homeowners, explain the entire process and help you get the listing.

What if you had a company that would take care of all of the burdensome paperwork and time consuming negotiations to get the deal closed.

What if you still received all of your commissions and these deals were actually easier to find and close than normal equity transactions.

What would you do?

If you are a homeowner reading this and you owe more than your home is worth let’s play the same game.

What if you were behind in payments and you could continue to live in the property for another 4 to 6 months.

What if you could get rid of a property that is no longer an asset and has now turned into a liability and have the deficiency forgiven.

What if in addition to living free you could actually get $3,000 at the closing and go rent a property for much less than you have been paying on your mortgage.

What if you had a company that would help you accomplish all of this with no monthly charges and no fees to you at closing.

What would you do?

Frankly it amazes me that every realtor is not taking 10 short sale listing a month. It surprises me that any homeowner would continue to struggle making payments or support a liability when they don’t have to.

Whether you are a Realtor or a homeowner what if you called us today and let us help!!!

I was on our weekly conference call this morning and an agent asked “ I spoke with a homeowner who said they are trying to do a loan modification. Should I try to convince them to do a short sale instead ? Which is better?

It has been our experience that short sales have a MUCH higher success rate. Some studies have shown that the government HAMP loan modification program has a success rate of less than 3%. Our success rate with getting short sale approvals is better than 95%. So from an odds of success perspective it would seem that short sales are better.

It is however important to consider not just the odds but to heavily weigh the seller’s objectives. If the seller is looking for a long term solution a short sale can be a more permanent solution. Most loan mods are temporary reductions in payments and still leave the owner owing more than the home is worth. If the homeowners objective is to stay in the home for another year or two or three and/or the homeowner believes that the market will come back up to where he/she has equity than a loan mod may be the way to go.

If I were an agent speaking with a homeowner who is in the process of doing a loan modification. I would do the following:

Ask enough questions to determine the owner’s objectives. If a loan mod still seems to make sense encourage them to keep trying.

Advise them as to the distinct possibility and odds that they may be turned down.

Keep in touch with them on a regular basis so if they do not get the loan mod you will be there to assist with the short sale.

As always never attempt to give legal advice and always encourage them to check with their lawyers and accountants to see what makes the most sense for them.

Pluto is no longer a planet and it appears that MARS is no longer a law worth enforcing at least not against Realtors.

The FTC recently announced that it will Not Enforce Provisions of the MARS Rules Against Real Estate Professionals Helping Consumers obtain Short Sales.

The flood of short sales has in our experience been a Tsunami that first hit the coasts and has now spread inland across virtually every part of the county. The first reaction of many people and agencies is to panic and in a sincere attempt to help the public over legislate with new rules and/or over interpret existing regulations.

While there will always be scam artists who try to take advantage of situations like these the vast majority of professionals including Realtors are sincerely try to help people make the best of a bad situation. Apparently the FTC has realized that MARS was a law that actually hurt consumers by trying to limit what Realtors and other professionals could do to help them.

The litnus test for all of us involved in short sales should always be the question "what is the best way to help my client?".

The way we do short sales is a win for all parties.

The seller wins by avoiding foreclosure and we are often able to get their deficiency forgiven and even get them money at the closing.

The Realtor wins by being freed up to do what they do best and still collect their full commissions.

The Buyers win by gettting some great deals.

The lenders win by not having to take back more REO's.

One of my favorite quotes is "life is not about avoiding the storms it's about learning to dance in the rain". Wherever you go in this country it's raining short sales and it is unlikely to let up any time soon. Let's all continue to work together to do everything we can to help each other make it through the storm!

4 years ago when we first started working short sales virtually 100% of our customers were homeowners who were in desperate financial situations.

While we still have customers like this today at least half of our clients can actually afford their properties but they choose to make a business decision to stop supporting an upside down property.

We are here to help people that want our help and we make no moral judgments about their reasons for doing a short sale. I have not and never would advise anyone to not make payments or not pay their debts. That is a very personal decision. I do believe however that it is important to level the playing field by making sure that all parties understand how the system is currently working and all of the possible outcomes. There are several interesting articles on this subject under the articles tab on this website.

I received a call yesterday from a seller who told me "I owe over $200,000 on a home that is worth less than $100,000 and I can go rent a house in the neighborhood for half of what this place is costing me. When real estate was going up in value this place was an asset now it’s just a liability that I need to get rid of".

Many sellers have the idea that they cannot do a short sale unless they have a desperate hardship. In our experience this is not the case at all. We recently had a surgeon making hundreds of thousands of dollars per year who was over $400,000 upside down on a luxury condo. We got the short sale approved and any deficiency forgiven. He did have to bring $10,000 to closing but he thought this was a great deal to get rid of a $400,000 headache.

Regardless of a sellers situation they still need to fill out all of the paperwork and state some reason or type of hardship as to why they want to do a short sale.

So why would the bank approve a short sale for someone who can afford their property? Why do we get 95% of our short sales approved when sellers who apply for loan modifications have less than a 2% success rate?

If the banks want to help people why would they not just let them stay in their homes and approve a loan modification? The cold hard truth is that the lenders do not do anything out of the goodness of their hearts. Just like a homeowner who chooses strategic default denying a loan mod and approving a short sale is a business decision for the banks.

The lenders know that a vast majority of the people who somehow do get a loan modification will get right back into trouble again. They also know that on most loans they have insurance to cover loses and on a short sale if they do lose money they know that they will lose up to 30% less than on a foreclosure.

So does it make any sense for a homeowner to try to do the “right thing” and disregard the business decision that might make the most sense for their family when the lender is doing only what makes the most sense for the lender?

As I said in the beginning this is a decision that is highly personal and up to each individual homeowner to decide for themselves!

I recently played a “what if” game with the realtors in our weekly mastermind group. It went something like this…

What if there were tens of thousands, possible hundreds of thousands of homeowners in your market that desperately needed your help.

What if you had 25 proven methods to find these people that would not cost you anything but your time.

What if you had an expert that had successfully completed over 500 hundred similar transactions and this person was willing to talk with your homeowners, explain the entire process and help you get the listing.

What if you had a company that would take care of all of the burdensome paperwork and time consuming negotiations to get the deal closed.

What if you still received all of your commissions and these deals were actually easier to find and close than normal equity transactions.

What would you do?

If you are a homeowner reading this and you owe more than your home is worth let’s play the same game.

What if you were behind in payments and you could continue to live in the property for another 4 to 6 months.

What if you could get rid of a property that is no longer an asset and has now turned into a liability and have the deficiency forgiven.

What if in addition to living free you could actually get $3,000 at the closing and go rent a property for much less than you have been paying on your mortgage.

What if you had a company that would help you accomplish all of this with no monthly charges and no fees to you at closing.

What would you do?

Frankly it amazes me that every realtor is not taking 10 short sale listing a month. It surprises me that any homeowner would continue to struggle making payments or support a liability when they don’t have to.

Whether you are a Realtor or a homeowner what if you called us today and let us help!!!