Short Sales continue to be a huge part of our business, and while I hear little of the ‘I wouldn’t touch one with a ten foot pole’ attitude common a couple of years ago, they remain a challenge. I consulted a team of experts about the current condition of this part of the business yesterday . . . ok: I talked with Ken Kopcho and Maurine Grisso . . . and here’s what I learned:
Banks are getting easier to work with. It’s as if they finally realized that, as remedies go, a foreclosure can cost them upward of $50,000 more to accomplish than a short sale. It’s taken a long time, but they seem to be getting their processes organized so they can move more quickly in legitimate short sale situations.
Wachovia was the first to become more reasonable. They have been easier to work with for months. Recently Bank of America and Welles Fargo have followed suit. Chase seems to remain ‘difficult,’ sometimes becoming non-communicative.
Bank of America’s Equator system – which was a bear when initially introduced – seems easier to navigate. It is unclear whether this is the result of a system adjustment or the growing familiarity of broker-users. (!)
While many short sale attempts don’t work out, there are things a broker can do to increase his or her conversion rates.
Spend time on legitimate short sale candidates only. Remember: being upside down by itself does not qualify a homeowner for a short sale; there has to be a real, legitimate hardship: loss of a job, medical expenses, lost income . . . something.
Don’t take short sale listings unless you think you can get it done. Seems simple, I know, but Maurine – whose conversion rate on short sale listings is remarkable – says she walks away from almost as many as she takes.
Don’t forget about the non-short sale candidates who are still in trouble. For example, Maurine is targeting homeowners who are 30-60-90 days late but who still have a little equity. They may not be short sale candidates, but they probably do have a problem. Plus: they have some ‘skin in the game,’ something to lose if they don’t get the problem solved. The broker becomes the solution. (By the way: if you don’t know how to find homeowners who are late on their mortgage payments, but who haven’t yet received a Notice of Default, ask me).
It’s January 2011, and real estate market indicators continue to improve slowly. Pending home sales are rising — they’ve been doing so since October — and even new construction is showing a little life. Meanwhile I hear that a lot of agents, faced with a fat Board Dues statement and nothing pending, are getting out of the biz. That’s sad. (But for the survivors, it’s good: less competition.) The sad part is: they’re probably getting out just when things are turning around.
This is a time to squeeze a little more, pay your Board Dues and get busy. Hold open houses, find 4 or 5 legitimate new buyers to work with, get your blitz signs out and start reminding people you are here to help them save some money. 2011 will be a year of More.
2 thoughts on “News from the Short Sale Rumor Mill”
I’m a principal broker at the Eugene HelpUSell. I love your blog and was reading through this one and wanted to ask you how you find homeowners that are behind on their mortage payments but haven’t received a notice of default yet.
Hi, Tiffany. I sent details to your email.