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What happens to the equity...

Posted by Abraham Walker on July 23, 2011 at 3:00am in Short Sale Discussions
when a homeowner gets foreclosed before they are able to sale their home?  Will the lender send them a check for the difference after they sale the property?  I know an individual with 100k in equity but they can't make their 200k mortgage payment.  They don't want to sale.  They believe that the bank "can't" foreclose on them because they have equity.

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Replies

  • Smitty July 24, 2011 at 6:24am

    This homeowner needs a quick reality check.  If he can't afford the payments, he needs to put it up for sale.  If there IS equity, he can just do a regular sale.

     

    If the bank forecloses and is paid all that is owed plus penalties and interest, legal fees, etc., the homeowner will get the balance leftover, however, they will likely get a LOT more if they just sell traditionally.

  • Eric Mieles July 24, 2011 at 5:11am

    @Sandra, Yes you are correct in homeowners sometimes in denial and shut off to common sense however that is why I suggested doing a proper discovery and also utilizing great questioning skills. I've noticed that many of us in the real estate profession have forgotten that we are professional sales executives and that requires using great skills that help transfer feelings, convey authenticity and conviction behind what we do.

    By using some of these forgotten skills we may be able to reach these tough to crack homeowners and do what we set out to do.

     

  • Sandra Allen July 24, 2011 at 4:59am
    Additionally, I would be cautious in my words.  Sometimes conversations with borrowers in a particular mindset can be tricky and dangerous.  They abort common sense, live outside of reality and love to toss around blame.  Do you work with an attorney that specializes in short sales?  If so, see if he or she can help in the explanation.  It will help cover you should something adverse happens.  Good luck!
  • Eric Mieles July 24, 2011 at 4:27am

    Abraham, Harry nailed it. I would seriously have a talk with these people. Try to ask good questions that will go 3 levels deep and understand what is really the underlying thoughts that are flowing through there head.

    Listen and do a good discovery to uncover things. Once you get some of this information out begin crafting your presentation and address all the things that you uncovered. Have suporting documentation, articles, foreclosure laws for your state and end it will giving them a vision for what they can have with you helping them....(Relief, less stress, guidance) compared with what they may lose by not working with you....(FORECLOSURE, deficiency, credit damage, potential public humility, and a host of other things)

    Good luck and let us know how it goes.

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