Here we go guys. I am going to try to do my best to update this every other day or so with new information.
Anytime you don’t see it being updated more than 4 days please shoot me an e-mail Rafael@admonex.com and remind me! Some lessons are longer than others. The important thing to remember is getting the understanding of how the processes is going to work, then take the immense action to apply to your business. Today I’m giving you guys a lesson of how to determine a good or bad short sale candidate. Let’s dive in! Lesson 1: How can I tell if I have a good or bad short sale contender? Not all short sale contenders are created equal. You can waste a lot of time on sellers that care less whether or not you can help them. You want to stay away from these people as much as you can. If they not realize you’re trying to help them it’s not worth it, move on to better things. There will be so many others out there just waiting for your help. They are in need of dedicated knowledge to help settle their home. Most people don’t handle their own properties for two reasons. 1. They do not have time. 2. They don’t have the education to do it themselves. Most of the time they are close to or already encompassed in a foreclosure so the time is ticking away. They need to work quickly before the property is sold at the next court auction. This is where you come in! When distressed homeowners work with you they get the peace of mind that someone, YOU, is taking care of them. You are the one that is trying to help them sell their house and avoid a finished foreclosure. A completed foreclosure creates future tribulations for the homeowner. It can save the homeowners 2-3 years of reestablishing their credit scores. The foreclosure compared to a short sale appearing as a “paid as agreed” instead of the straight foreclosure allows them to keep their credit. If you have ever had credit problems you know 2-3 YEARS is a LONG time! Not only are you saving their credit but you are allowing them more them to find a place to move because you will be postponing the auction sale for review of approval. Is this helping? Does it make better sense? Why can’t the homeowner just list the property with a Realtor? There are many reasons but the 2 that effect homeowners the most are: 1. Many Realtors are not qualified to successfully carrying out a short sale.
2. Realtors get paid a commission, and short sale homes have ZERO equity. That means that the Realtor has to get a lender to pay their commissions. This is risky so, they usually try to avoid homeowners without adequate equity to pay their commissions. How can I tell if I should pursue a deal? It is important that you not waste your time with unwilling or unmotivated homeowners/sellers. They must be prepared to leave the house in order for you to perform the short sale strategy. You must keep in mind that you can’t help everyone. You can only help those that will be inclined to comply with your requests. You are not in fault for the homeowner’s hardship. If the short sale doesn’t get accepted, the homeowner is in no worse off than they were before you entered their lives! The homeowner must have a legitimate destitution concern. The lender will NOT agree to a short sale if they believe the homeowner is simply avoiding making the payments because they don’t like the house anymore, marital disputes, or want some other cop-out excuse. Don’t waste your time trying to assist homeowners that are not good short sale candidates. It’s your time, it’s valuable. You are robbing the other people that are in desperate need of your help if you try to “help” those who don’t truly need it. Willing homeowners with legitimate destitutions NEED a solution. Be the solution, Be a WISE supporter, not a BULLIBLE fool! Here is a list for what I consider ADEQUATE AND INADEQUATE short sale candidates. Adequate properties • • • • • • • • • • A continuing poverty that is preventing payments being made. A COMPLETELY willing proprietor who will work with you, not against you. Already behind on mortgage payments. Lis Pendens or Notice of Default (NOD) has been filed. Lender has already started the foreclosure process. No equity and property is over-leveraged (having owed more on it than it is worth) Property needs repairs More than one mortgage is owed One or multiple judgments or Liens owed Property is listed for Sheriff sale with MORE than 10 days left to auction sale date
Inadequate properties • Not in compliance to requests for documents, showing their property, signing a listing agreement etc.
• • • •
Does not have a legitimate destitutions (using some excuse to NOT pay the lender when they have the money available) The property has a lot of equity and the lender would be better off foreclosing to get paid in full The sheriff sale is LESS than 10 days away Homeowner requests to STAY in the property.
So there we are. Ask yourself which column your potential client fits into…. Yes the correct answer is Adequate! If not, MOVE ON! Here are a few more questions to ask yourself to ensure you have a good candidate. 1. 2. 3. 4. 5. 6. What is the address of the property including city, state, and zip? Do you have a foreclosure date pending? If yes, when? Can you make anymore payments to save the house? Do you want to SELL or KEEP the house? What do you owe on the house? Mortgage payments and balance? Do you have any other mortgages? If yes, who are they with and what do you owe? 7. Do you have any other liens? If yes, who are they with and what do you owe? 8. Does the house need any repairs? If yes, briefly explain 9. Are you behind on the payments? If yes, how many? 10.Are you the owner? Is anyone else on the deed or mortgage? 11.Is the house vacant? If not is it rented or owner occupied…when could you move? 12.What type of loan do you have? FHA, VA, CONVENTIONAL? 13.Has anyone else tried to contact the lender on your behalf? 14.Ever filed a BK? If yes, when? Was it discharged or dismissed? 15.What is your goal by working with me? 16.Additional info? Well I think that will be enough for today. I’ll try to get lesson 2 going. Rafael Mendez Momentum Training Institute Utah Loss Mitigation Center