Short Sales In Real Estate – How To List & Sell Them

hey what’s up guys during a real-estate
recession you have to get creative in one of the ways you can do it is through
short sales coming up This is Steve with SteveInvests thanks
for stopping by I’m a local real estate broker here in Southwest Florida and my
goal my mission is to help other real estate agents and real estate brokers as
well as investors make money and create financial freedom I’ve mentioned we’re
going to be talking about short sales we’re going to go through the entire
process from beginning to end how to list these properties how to help a lot
of people avoid foreclosure and how to make a lot of money doing so I gotta say
when the real estate market crashed it was a it was scary times out there we as
a real estate organization we my sister and I opened up our company in 2006 and
we really had to adapt to the market in one of the ways that we did was working
short sales and I can tell you it was extremely gratifying rewarding and we
made a lot of money doing so as well all right short sales a lot of real
estate agents dread dealing with shorts so what is a short sale essentially it’s
selling the property for less than what is owed on the mortgage assuming the
bank agrees to it there are really three main benefits of a short sale
number one being it’s better on your credit than the foreclosure it’s gonna
allow you to actually obtain financing a lot quicker in the future as well # 2
you have a higher probability that the bank is not going to come after you for
the deficient amount so let’s say for example you owe
$200,000 on the property and it sells for 150,000 the bank essentially will
agree hopefully they’re gonna agree upon a successful short said they’re going to
waive their deficiency rights, meaning that they’re not going to come after you
for that $50,000 spread as well as any closing costs or attorney fees # 3 – They’re somewhat predictable they’re gonna transact like a normal
traditional sale essentially you’re gonna put get a normal listing agreement
you’re gonna put it up on the market the seller is going to realistically upon
getting an approval know exactly a specific close date when they have to
leave the property as opposed to a foreclosure you you’re really just
you’re not gonna know when you have to be out of that property or when the
bank’s gonna come knocking on your door so why would a bank allow this that’s a
common question we get it’s common question that we would get from sellers as well now it benefits the bank because if they
have to go through the entire foreclosure process a couple things can
happen number one they’re gonna rack up the attorney fees number two there’s
liability associated with the bank taking that property back it’s gonna sit
out there it’s gonna sit vacant and so forth the bank is not in the business of
holding real estate they’re in the business of lending money so they don’t
want the property but if they take it back they had a lot of liability so that
property is usually sitting vacant it could get vandalized etc number three
if the bank agrees to doing a short sale that property is less likely to get
damaged by any kind of borrower or disgruntled seller which the bank would
have to put a lot of money into the property if they smashed windows or
destroyed drywall. So as a real estate agent real estate broker or even
an investor reaching out how can we market to these people number one most
effective way in our experience is go to the source which is usually the Lis
Pendens the Lis
Pendens is essentially the pending lawsuit of foreclosure you
can usually find these in your local Clerk of Courts I’m gonna show you on
ours which is Lee County and I’m gonna show you exactly how to search for these
and see actually how many in the last 30 days popped up we’re in a flattening
market right now is 2019 but I’m gonna show you exactly how many in Lee County
popped up in the last 30 days all right you’re armed with this information what
you do you can mail them you can door knock you can try to call what we did
which was very effective we would usually mail them at least three or four
times so they had an idea of who we were our expertise our experience and then we
would follow up with phone calls or knocking on their doors as mentioned the
beginning of the video a lot of real estate agents dread short sales because
let’s face it it is a process it is a pain in the ass their effective way is
to actually mark it to real estate agents how do we do this you can get a
list of real estate agents you can email them you can call and explain your short
sale specialist and anybody that any clientele that they have you can go
ahead and say split fifty-fifty on any anybody that they refer to you that’s a
short sale candidate now you’re about to get a listing what do you do now I made
a huge mistake in the beginning we were getting a lot of sellers that
wanted to get the ball rolling so we would just put it out on the market we
list these things for sale we would get buyers and we would get offers and so
forth but the thing is we had half-assed packages meaning our packages were not
complete and you cannot submit a package to the bank if it’s half complete there
they’re just not gonna pay attention to it so it’s imperative that you get a
full package from the seller at the time of taking the listing agreement explain
to them you will not go to open market until you have everything on this
checklist in your hands once you have it in your hands and everything’s checked
off ready to go that’s when you go to open market once you’re on the open
market you probably gonna get an offer pretty quickly because you’re gonna
competitively price it we would usually price these at least ten to eight
percent below sold comps this way we can get an offer right away once we receive
the offer we’re gonna package it all together with the short sale package
that we have in the link below for you once that package together with a fully
executed contract between buyer and seller subject to short sale approval
we’re gonna send all this information to the bank what you don’t want to do is
you don’t want to submit the package without an offer so our suggestion is
compile the entire package together with an offer between buyer and seller
subject to short sale approval and then submit that package to the back once you
have that point of contact at the bank game on what you want to do is you you
or a member of your team you want to aggressively call this person you want
to find out exactly where they’re at with the short sale process usually
they’re gonna hire a third party it’s either another real estate agent to
do a BPO which is a broker’s price opinion or they’re gonna hire
essentially an appraiser or both they might hire multiple people once the bank
has all that documentation the appraisal or BPO usually they get back to you and
they’ll let you know if we need to renegotiate price sometimes they’ll come
back with a higher price if the buyer doesn’t go for it you’re kind of
starting over which sucks and then you’re gonna have to go
to market and resubmit this whole package a lot of banks though they
usually give a leeway of 10% now the follow up with the bank you want to be
pretty aggressive we had our girl basically calling two
times a week to make sure that our file was on top the person that’s more
aggressive and ensuring that the package is complete is going to win this game
now the short sale negotiators they may ask for additional information like
updated bank statements or updated financial report and so forth our goal
and we put notice to every seller that if the bank will require something we
need to get to them in less than 24 hours usually I’ve put so much pressure
on the sellers to get us that information so much pressure that I
would even drive to their place of employment and so forth to pick up
certain documentation I wanted to get that information over the banks so
quickly that the short sale negotiator knew that we were serious and
would always put us on top of that pile in terms of expediting our short sale
negotiation now once the bank approves everything they approve the contract the
price they’re gonna usually submit a letter tell you if they’re gonna waive
their deficiency rights to the borrower it’s gonna name the buyer in there it’s
gonna name the price the amount of time that you have to close and so forth so
how do you get paid as a real estate agent the bank pays it we’ve been paid
as high as 8% on some deals usually 6% you’re gonna Co broke out to another
real estate agent if there is one involved but the bank pays all
closing costs many times they’re gonna pay all the closing costs related to
doc stamps, title and commissions and the borrower many cases doesn’t have money
so they they don’t come out of pocket with anything we’ve actually been able
to get certain borrowers money at closing to pay for a moving truck and
even time in a hotel just to get them by again banks are willing to work with
borrowers so if you’re a real estate agent real estate broker there’s a lot
of people that you can help save from foreclosure and guess what you become a
hero if you help somebody avoid a foreclosure they’re gonna
remember that forever and what happens after closing you stay in front of
these people you ask them for more referrals because
you’ve helped them help their future so these people are going to refer you
people but you have to stay in front of them it’s 2019 I dealt with a client
probably about ten years ago and I just sold another one of his properties not
short sale but the guy keeps using me because I helped him avoid foreclosure
on other properties that he had which we successfully perform short sales this
guy’s referred me to a ton of people as well
now this short sale package that’s including the link below that’s Florida
based so make sure you take that bring it to your attorney bring it to your
real estate broker you’re gonna have to create your own so this is just for
example I’m not a real estate attorney in any sense
I practice real estate in Florida so your state’s probably gonna be different
but at least it’s gonna kind of guide you for what the banks really want in
the short sale package because that’s pretty pretty relative across the board
so my question to you is if your real estate agent have you done any short
sales how many have you done what’s your experience in dealing with short sales I
like to hear about it and if you guys

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