Stop Waiting for the Storm to End and Learn to Dance in the Rain!

| November 4, 2009 | 0 Comments

It’s raining short sales and REO’s! Do you know how to dance through the process of selling them? Are you afraid to even try? Have you made the statement “ I just won’t do them”? Well think again, they are here – quite possibly, here to stay!

So what exactly is a short sale versus an REO? A short sale is when a seller has more mortgage than equity! What I mean is their mortgage is higher than the market value of their home. Therefore they need the mortgage holder to agree to reduce the mortgage amount so the home can sell. Will all lenders do this? Unfortunately no, but most will with a true reason for the short sale. The seller must show there has been some kind of hardship, loss of job, death, disease, or some other financial setback that will not allow them to pay off the mortgage.

Short Sales Can Be Anything But
The seller does not even have to be behind in their payments to be considered for a short sale, but they do have to show the inability to continue paying their mortgage. The process of approval from the lender can be very lengthy 3 months to a year, or more, depending on the lender and the situation. There are times when files are waiting for approval and the property still may go to the courthouse steps in foreclosure.

Yes, this may sound daunting and a bit frustrating, but helping people in these situations is critical to them, and can be rewarding to you. I encourage you to attend any and all courses offered on short sales and distressed properties. They can be very enlightening, however I do want to give you one caveat, if in the course, they are selling you something or telling you something that sounds to good to be true, be very careful and do your research before getting involved.

REO – it’s not a Speedwagon
Now for the REO explanation. An REO or “Real Estate Owned” is a property that has already been taken back by the mortgage holder. They are now the true owner and seller. Selling these properties is more like a traditional real estate transaction with the exception that the lender typically uses their own contract and the property is sold in “as is” condition with NO warranties.

This can be good and bad – if your Buyer doesn’t understand the risks involved in buying “as is” and not having any “history” on the property – as the seller (lender) has none. These transactions typically take 30 to 60 days to close.

Keep Your Cool
Please understand Short sales and REO’s are NOT the only thing on the market so do not panic. However as of June they appeared to be about 30% of the total closings for the month in PRO with 50% of the pendings short sales. This tells us there are 70% more homes on the market that can and will sell as soon as they are properly priced.

Bottom line it’s time to jump in, get to class and start dancing because I think the storm may be here awhile!!!

Category: Words Of Wisdom

About the Author ()

Nikki along with her husband Gary, became licensed in 1986 and over the years built a mega sales team that has served over 3700 families with a volume of 560 million dollars in sales. They both hold the CRS designation. Nikki is also the broker/owner of 3 Keller Williams Realty offices, 2 Title companies and the operating partner for the South Florida region for Keller Williams Realty. Nikki has spoken and trained for FAR, CRS, Howard Brinton Star Power, Numerous real estate boards, Aetna insurance, The Rotary, Tampa Bay Builders association, and the YMCA to mention a few. She is a master trainer for Keller Williams University and has helped to write many courses for real estate professionals. Being a firm believer in education she is continually sharpening her skills through education and walks the walk by sharing her knowledge and experience.

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