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HAP Program Has Arbitrary Cut-Off Date

Posted by Wendy Rulnick on July 29, 2009 at 7:14am

I am privileged to represent Major Jason M. Trew, a pilot with the United States Air Force, as a real estate client. Major Trew is stationed at Eglin Air Force Base. I have Major Trew's home listed for sale in Freeport Florida because he is being required to relocate by the Air Force to a new base. Like many others in the military, his property value has declined to an amount lower than his mortgage balance. Major Trew is not a property flipper nor a speculator. He earnestly relocated to the Emerald Coast of Florida for the military, as directed by the United States government, and invested in a home for his family in March 2007. I am printing his letter to Congress, with his permission, of grave concern regarding the new American Recovery and Reinvestment Act of 2009, and its affect on our military by establishing an arbitrary cut-off date for aid to military members who purchased homes with values now below mortgage balances:The Honorable Dave ObeyChairman, Committee on AppropriationsRoom H-218, The CapitolWashington, D.C. 20515Dear Mr. Chairman,Section 1001 of the ‘‘American Recovery and Reinvestment Act of 2009'' includes a provision extending temporary homeowner assistance for members of the armed forces permanently reassigned during this mortgage crisis. However, I strongly disagree with the stipulation that the property must have been purchased before July 1, 2006.When the Military Officers Association of America asked the Appropriations Committee staff for the rationale for that cutoff date, the committee indicated the sense that the home market decline was underway at that point, and the intent was to protect people who purchased homes before they had any warning to expect a decline.Contrary to this assumption, the fact that home prices had decreased was an incentive to purchase a home. In fact, the National Association of Realtors launched a $40 million campaign in fall 2006 to encourage home purchases. Within the Florida real estate market, a survey released just after the July 1, 2006 cutoff date found that:-Only 16% of homeowners listed a "fear of a price bubble"-Only 5% said they were concerned about falling home values overall-58% were optimistic that home values in their own community would continue to increaseIn January 2007, a Florida Association of Realtors (FAR) report that indicated "the market correction has plateaued and the local real estate industry is likely on the rebound." That same month, the FAR president stated that, "now is the time to take advantage of homeownership opportunities."After reading articles like these, we purchased a home in March 2007 because we assessed that the market's decline was near the end and we did not expect a further decrease. Obviously, we purchased at a bad time in the real estate market, just as those who purchased before July 1, 2006.Starting last summer, we attempted to sell our home for a loss that we could personally absorb. In seven months, no one inquired about the house and a recent comparative market analysis estimated the value at $70,000 less than our mortgage balance and $120,000 less than the appraised value at the time of purchase. We are now pursuing a short sale and deed-in-lieu-of-foreclosure. Either option will significantly impact our credit for many years.As an active duty member of the U.S. Armed Forces, the current wording of the ARRA provides us no relief as we prepare to move to our new assignment. Many other military families are in the same situation.The 1 July 2006 date was a faulty decision that sacrificed effectiveness for the sake of simplicity and I request that you to introduce legislation that corrects this costly mistake.Respectfully,Jason M. Trew4 Attachments:1. New York Times article, "Realtors Say the Stars Are Aligned for Housing" (6 November 2006)2. Orlando Sentinel article, "Poll: Homeowners fear storms, not lower values" (8 July 2006)3. Bradenton Herald article, "Realtors predicting home sale uptick" (26 January 2007)4. PR Newswire article, "Florida's Existing Housing Market: Median Price Up, Sales Down in 2006" (25 January 2007)cc:Senator Bill Nelson (D- FL)Senator Mel Martinez (R- FL)Representative Jeff Miller (R - 01)

Suntrust Approves Short Sale in 75 Days

Posted by Wendy Rulnick on July 27, 2009 at 12:30pm

Home at 1694 Valparaiso Blvd., in the Pinecrest subdvision in Niceville Florida, has just been approved for short sale!Summary:Lender: Suntrust - both first and second mortgageServicer: First American Loss Mitigation ServicesLoan Type: Fannie MaeHardship: Job Loss1st Mortgage Balance: $192,0002nd Mortgage Balance: $40,000List Price: $149,000Cancelled Debt: appr $83,000Time for approval: 75 daysIt's Wendy!Wendy Rulnick, Broker, Rulnick Realty, Inc. .Destin Florida

5 Tips to Get Your Short Sale Buyer to Walk

Posted by Wendy Rulnick on July 26, 2009 at 11:00am

Today I was talking with a title agent in my Destin Florida market who handles short sale negotiations for agents. He lamented that he had two contracts recently fall apart, with buyers walking.“Why?” I asked.“ Well, the agents don’t have the seller sign the contract, so it is just an offer. There is nothing to hold them.”“Stop doing that!” I told him, “I would never send an ‘offer’ in to a short sale lender.”Which brings me to my point- " How can you increase the chances of your buyer “walking” from a short sale?" Just follow these tips:1. Don’t have the seller sign the contract. Then it is not a contract, just an offer, and the buyer can bail without repercussion.2. Never ask for an earnest money deposit. Why ask the buyer to put anything on the line to show his investment in the contract? Then he can walk free, usually, with nothing to “lose”.3. Use a 60 day closing and 30 day short sale approval time line. Sure, that will be enough time to get a typical short sale approved- Not! Oh well, if the time frame passes after hours and days of work invested, and the buyer doesn’t “stay”, you can always start all over on a new transaction.4. Write in the contract that the buyer can “Withdraw at any time”. That should simplify things.5. Finally, let the contract be submitted to the lender with others, just like an auction , because the short sale lender will abide by contract provisions and honor the "primary" offer first, right? That tactic will make your buyer stick like glue.Follow these tips, and you’ll be sure to decrease your chances of closing on a short sale.Or, get a buyer with realistic expectations, a good deposit, one strong offer, and an "executed" contract, and be on your way to a successful short sale closing.It's Wendy!Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Standing up for your commission!

Posted by Bryant Tutas on July 26, 2009 at 1:30am

Fight for your commission. You be surprised at the outcome. The lender has no authority over your listing agreement. They do however have authority over how much of THEIR money they will pay TOWARDS a commission.If you have an agreement with your Seller to pay you x% and the lender will only allow y% then the Seller simply pays the difference UNLESS you decide to let them off the hook. The lender's decision does not alter the listing agreement. Thinking it does....is a myth. Unfortunately it's one that most agents just roll over and accept. Not me.If you are on the Buyer side of the short sale then simply have an agreement (BBA) with the Buyer where he will pay you a minimum commission. That way if the co-broke is reduced the buyer can pay the difference. If the Buyer can get a good deal on the purchase then this should be no issue. If it is....the simply explain you can't show him Short Sales.I had a lender, GMAC, try to reduce my commission recently. They explained to me that it was their policy and there was nothing they could do about it. What I said was:"There are 3 agents being paid out of this x% commission. Why am I being asked to reduce? I did my job and I'm only making a little more than $x,000 on this deal. GMAC needs to get in line with market conditions. Realtors(r) are working our butts off to help GMAC avoid the cost of a foreclosure only to have money taken from us. I won't change it. Who can I talk to that can make that decision?"They left it alone.We are in complete control of our compensation as long as we remember who is paying us and write our commission agreements (BBA or listing) accordingly. And don't just fold when asked to reduce. Stand strong and voice your opinion. They may just agree. If they don't then discuss it with your Seller....after all that is who you have the agreement with.Now having said all this.....I have taken less in the past and I'm sure I will in the future BUT it's a decision made between me and the Seller NOT the Lender.AND.....whatever I get paid......I will fully honor the co-broke being offered in the MLS. It's the fair way to handle business. If you don't have the ability to get paid then I suggest you offer a lower co-broke. One that you know you can honor. Better yet....learn how to negotiate. Isn't that why we get paid? What say you?

VA Short Sales - SELLERS Stuck With Appraisals 6 Months

Posted by Wendy Rulnick on July 25, 2009 at 10:49am

recently had a short sale contract on one of my listings in Mary Esther, Florida, where the seller had a VA (Veterans Administration) home loan. A VA short sale is called an "Offer in Compromise". The offer price was $120,000, which I thought was reasonable given the condition of the property. Wells Fargo, the short sale lender, ordered an appraisal. Not just any appraisal, but a VA appraisal, called a " Notice of Value" or NOV.The seller's short sale VA appraisal came back at $135,000, much higher than the offer and fair market price, in my opinion. The buyer backed out due to other circumstances, so I did not contest the value. I informed Wells Fargo that I would not be able to sell the property at the appraised price, and asked how long they would keep that value active. They said "Six Months!" Whoa! I've got one year inventory levels in the Mary Esther FL, and the market is still declining.It turns out that the Veterans Administration's policy that VA home loan appraisals are valid for six months extends to SHORT SALES, TOO!Notice the VA information pamphlet above states: "Rapidly fluctuating real estate market conditions may temporarily dictate the use of a shorter validity period". Well, the VA has already formally addressed this concern for new construction master appraisals, which cover the same floorplan being built in new subdivisions by one builder. The bulletin, - was released on May 22, 2009."Suspension of Master Certificates of Reasonable Value".The VA bulletin states that due to the "rapidly declining market", holding new construction master appraisals for six months is rescinded! (This was reduced last year from 12 months).Since the VA already acknowledges holding the appraisals valid for too long may be detrimental to the veteran in new construction, is it not reasonable to assume the same with existing construction AND with short sales? Both cases harm the vet by enforcing outdated values.I hope the VA will issue a formal suspension of the standard appraisal time period for resale purchases and short sales. If they do not, I have enough ammunition to fight the next time!It's Wendy!Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

VA Offers in Compromise

Posted by Wendy Rulnick on July 25, 2009 at 10:39am

The Emerald Coast of Florida has a high military population with both active duty and retired air force personnel. Eglin Air Force Base is located in Fort Walton Beach, and Hurlburt Field is in Navarre, Florida. Duke Field and NAS Whiting Field are nearby. We will be seeing an increase in short sales for GI borrowers when they must relocate during their PCS moves (permanent change of station). VA Short Sales are called "Offers in Compromise", "Compromise Claims" or "Compromise Sales". The VA may accept a Compromise Sale if the cost to the VA is determined to be less than that of foreclosure.

The VA website says: "If the borrower is unable to sell the property for an amount that is greater than or equal to what he/she owes on the loan, including closing costs, VA may pay a "compromise claim" for the difference in order to allow the private sale to go through. The borrower can sell the property to a buyer who gets his/her own financing or to a buyer who wants to assume the loan. However, with a compromise assumption, the lender does have to agree to have the amount of its guaranty reduced by the amount of the claim payment. In order to be considered for a compromise sale, several factors must be considered."

VA Compromise Sale Factors:

1. You may only sell the home for fair market value.

2. The closing costs must be "reasonable and customary".

3. You must have a valid financial hardship such as loss of income, relocation, death of breadwinner, etc.

4. There should not be a second mortgage on your property, unless it is "insignificant". If so, you might ask the junior lienholder to release the lien and convert it to a personal note.

5. You should ensure your sales contract is "contingent and/or subject to the approval of a VA compromise sale."

If you have a VA loan, and need to do a "Short Sale" or "Compromise Sale", here is what you must do to begin the process:

1. Contact you lender to see if they are an approved VA Servicer Loss Mitigation lender and/or contact the VA regional office servicing your loan directly.

2. Fill out a financial status report form provided by your lender or the VA.

3. Complete a letter of request.

4. Complete a Compromise Agreement Sale Application. You can get this form from the VA or the approved lender.

Final Important Points:

1. Your lender does not have to agree to a Compromise Sale.

2. For VA loans originated on or before December 31, 1989, you might have to sign a promissory note at closing agreeing to repay VA for the deficiency remaining after the property is sold.

3. An experienced Short Sale Realtor should guide you through the sales process, help you determine fair market value and prepare your package for submission to your lender or the VA.

For more information, contact your VA Regional Loan Center.

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Search Destin Florida real estate and vicinity.

Short Sale Pre Foreclosure Help.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email itswendy@rulnickrealty.com

Wendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for almost 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she also negotiates successfully to her buyers' and sellers' advantage. She is supported by a team of top buyer specialists. Wendy lists and sells homes, condos and townhomes in Destin Fl and the surrounding areas. She was ranked in the top ½ percent of all Realtors on the Emerald Coast of Florida in 2008 for resale listings sold.

All Rights Reserved. "VA Short Sale Guidelines (VA Compromise Sales)" Contact Wendy Rulnick regarding Destin Florida real estate and vicinity. Copyright © 2008 by Wendy Rulnick.This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.

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Have you seen the new Bank of America/Countrywide short sale approval letter? It is sending shockwaves to unsuspecting short sale sellers. 1. The letter states that Bank of America has "agreed to acce

Posted by Wendy Rulnick on July 25, 2009 at 7:53am

Have you seen the new Bank of America/Countrywide short sale approval letter? It is sending shockwaves to unsuspecting short sale sellers.1. The letter states that Bank of America has "agreed to accept a short payoff". Now, how can they "accept" a short payoff, then state they "might" collect the rest? They either are or are not.2. It states "there may be tax consequences for entering into a short sale". Again, the statement concedes it is a "short sale", and alludes to the 1099-C, where cancelled debt is reported to the IRS. Either the debt is cancelled or it is not. Why would Bank of America reference short sale tax consequences if they were, in fact, collecting all the debt?Neither contradiction supports their reference to collect the deficiency in the future. Since I have had several concerned sellers who have received this approval letter, I emailed a Bank of America escalation negotiator to get their explanation. Here is what they said:Countrywide/Bank of America cannot remove the deficiency verbiage from the approval letter. We must reserve the right to collect the unpaid balance of the loan for the benefit of our investors and mortgage insurance companies that insures payment on the loan. The purpose of the short sale letter is to properly disclose this to the borrower so they may consider all of their options with respect to their mortgage loan.In my experience with short sales, I have never know anyone to pursue the deficiency once the short sale has closed.So, how can you alleviate concerns when receiving this letter? Of course, talk to your attorney if you do not feel comfortable, but consider the alternatives if you do not accept the short sale. Deed-in-lieu of foreclosure, which will produce the same deficiency, and be worse on future borrowing ability? Or foreclosure, with severe future borrowing constraints, liabilities and consequences? None of the choices are that palatable, but short sale is still clearly your best option.It's Wendy!Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc

Bank of America Short Sale Approved in 4 Days- New Construction Loan

Posted by Wendy Rulnick on July 25, 2009 at 7:40am

I know you are doing a double-take, but this is a true story about a four-day short sale approval from Countrywide... The key is- it was a new construction loan... Here is what happened....

My seller. "George", bought a lot in Rosemary Beach, Florida. This a one of the higher-end markets on the Emerald Coast, with a view of the Gulf of Mexico, and a five-minute walk to the beach. George decided to build an upscale home on the property to sell. It would be over 3500 square feet, with spectacular views and extravagant finishes. He hired a builder and took out a 1 million dollar+ construction loan with Countrywide.

During construction, George found out his plan to put in a pool would not work, so substituted an elevator in the design. Countrywide then sent out an appraiser to ascertain a new value. Guess what? Their value was now only $800,000. George was stuck! He would not have the funds to finish the house! It was about $250,000 from completion. What happened? In the year of construction, values in Walton County had plummeted! The house was not worth the original loan amount.

George then hired me to sell the property as a short sale. During this time, Countrywide completed numerous BPO's (Broker Price Opinions). When I talked to the BPO agent, we would both shake our heads! What is the house worth? It is unfinished - in a resort area where one could buy existing homes for $500,000..... Finally, I got a full price offer for about $300,000 a few weeks ago. That's over $600,000 less than the outstanding balance on the loan!

5/28 - We faxed in the short sale package to the negotiator who had already contacted us

6/2 - The negotiator called to say "OFFER IS APPROVED!"- 4 DAYS LATER!!

I was, frankly-- SHOCKED! I asked how they could do that so quickly. The negotiator said the construction lending department is much smaller than their end-consumer lending division. And they were much more efficient. (I could tell he had a smile on his face.) That makes sense. The loan was still in-house with Countrywide, and had not yet been re-packaged and sold to the investor market!

So, have hope if you run into a new construction short sale with Bank of America/Countrywide- and be happily surprised.

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

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Destin FL Real Estate

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Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or help you buy a home or rental property on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy is a featured "Short Sale Specialist" in "Kiplinger Magazine" and "Florida Realtor Magazine".

Bank of America Now Asking For Retirement Money!

Posted by Wendy Rulnick on July 25, 2009 at 7:34am

Do you think your 401K is safe? Attorneys have told me in the past that short sale lenders won’t touch your retirement money. Guess what? FALSE! Today a Bank of America negotiator asked me to have my seller liquidate HALF his retirement account to get his short sale approved.

The seller has a $400,000 loss on a property in Santa Rosa Beach, Florida. We have been in the short sale process for four months. Today the negotiator said the file will not be approved unless he liquidates half his IRA for a $70,000 contribution. She said he has “some” income, although he has lost most of it because he is in sales…. His wife was laid off last week. There are no other funds. That is irrelevent to Bank of America. His wife's name is not on the loan.

I asked the negotiator, “Why would someone agree to give up half their retirement? They could refuse, then your company will have to pursue a deficiency judgment to try to get the $70,000 after a foreclosure .” She could not answer me, and I have yet to figure out the logic. $10,000, $20,000? OK, that makes sense. But half of someone’s retirement account? I can see how a seller might “roll the dice” and say “no” to the short sale, not give up $70,000, then wait and fight after a foreclosure. It might cost them $20,000 in attorney’s fees, but they might also save $40,000, not too shabby in this economy. I say if this is a trend, many sellers will take their chances with foreclosure.

What do you think?

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Sign up for "SHORT SALE BASICS FOR REALTORS" Webinar

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine".

Bank of America "Forgets" To Ask for Promissory Note

Posted by Wendy Rulnick on July 25, 2009 at 7:00am

We all make mistakes, but this was a big one, by a big corporation... I was in negotiations for a short sale on a Crestview, Florida listing. My sellers owed Countrywide/Bank of America about $175,000 as the senior lien and around $25,000 to Citi Financial as the junior lien. The sale price was a spot-on $150,000.

Bank of America asked for a promissory note of $5000. Although my sellers had recently divorced and had to move to separate homes, they both had stable jobs. Bank of America told me that was a factor in asking them for the note. The couple agreed, and I emailed the negotiator. A few weeks later, BOFA approved the short sale. YEA! And they did not even ask for a note!

My next problem was to tackle Citi, who had initially farmed out the listing to a collection agency, as I wrote about in "Rude and Crude- Nordon Collection Services". After I complained about Nordon's uncouth behavior, and hanging up on me, Citi took the file back. They requested $6000 as a pay-off to release their lien. BOFA would only pay them $3000, so my sellers agreed to pay the other $3000 at closing, each having to borrow money to do so.

Finally, the home closed! After months of wrangling, the sellers were thrilled to complete that phase of their lives.

Until yesterday, that is. Bank of America called asking where the note was. This is a month after closing. They sent me back a copy of my own email to them stating the sellers would agree to a note (pretty shrewd, huh?) The negotiator then called me, demanding the note be paid.

I responded, incredulously."The note?" I said, "You did not require a note in your approval letter. The sellers based their decision to borrow money to pay Citi on the fact that you did not require a note. They have nothing more to give.... Is someone in trouble at your company?"

"Yes" he responded.

It's Wendy!

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Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

Call Wendy Rulnick, Destin real estate agent, featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine", to list and sell your home or condo or help you buy real estate. Serving the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.

Dissecting the Financial Worksheet

Posted by Wendy Rulnick on July 17, 2009 at 10:28am

Broker Bryant and I just finished teaching Short Sale Basics: Session 2, part of our 5-session webinar series about short sales. Today we covered qualifying the seller and short sale documents. There was a lot of material, in fact we went over time! Part of our in-depth analysis included dissecting the financial worksheet (one of my favorite things to do). We provided a made-up example and found “errors” for discussion.Here are a few of the possible mistakes you might find in the financial worksheet:Numbers don’t add up – that’s right, simple math mistakes adding up income and expenses.Monthly gross income used, not net incomeAnnual gross income used, not monthlyBonuses from last year are included in current yearCurrent year commission or P&L is based on last tax year, not recent incomeRental income listed when tenant is moving outGross rental income is not adjusted for expensesListing the same military base housing allowance when it is changing upon relocationIncorrectly assuming property value when listing assetsNot including current mortgage and associated expenses for short sale propertyNot including anticipated rent and expenses upon relocationSpending money on frivolous items, like tennis lessons, skydiving, vacations, etc.Not itemizing “miscellaneous" expensesFinally, when monthly net income is more than monthly expenses- there may not be a hardship at all!The financial worksheet is one of the most problem-ridden parts of a short sale package. In a questionable hardship case, you can use the financial worksheet as part of your seller pre-qualification.

Pricing the Short Sale

Posted by Bryant Tutas on June 14, 2009 at 8:31am

When listing a Short Sale it is imperative that the property is priced right. When I say "priced right" I mean as close to market value as possible at a price that will get the property under contract quickly.One of the problems I see in my market is that short sales are priced way to low. It seems like listing brokers are just picking a number out of the clear blue sky and placing the property on the market. While they may generate a lot of activity, these deals, more than likely, will not close. Plus they are doing the Sellers a major injustice. The Seller will either be foreclosed on or end up with a huge deficiency judgment against them. Not to mention the possibility of owing good ole' Uncle Sam some money.Pricing a short sale should be just like pricing any other property. You are looking for a price that will sell the property in a reasonable amount of time and at a reasonable price. The fact that the property is a short sale, requiring 3rd party approval, is nothing more than a negative market condition.If the true market value of the property, if not a short sale, is $200,000, then what you should be doing is taking this figure and making an "adjustment" for the "negative market condition(short sale)". Depending on your market it could be a 10% to 20% downward adjustment. Let's say that your market is showing you that short sells are selling for 20% below a normal sale of similar properties. That means that this property should sell for $160,000. So maybe you price at $165,000 or $169,000 depending on your area's sales price to list price ratio.Now you have a property that is priced right AND you have a very good chance of getting the Lender to agree to the short sale if you bring them a CONTRACT at $160,000.OK so here's the second step. Negotiating the deal. Notice up there where I bolded CONTRACT. This is important. Many REALTORS® are submitting OFFERS to the Lenders for approval. This is wrong and will limit your ability to get the short sale accepted.A short sale requires 3rd party approval of the CONTRACT not the offer. What this means is the Buyer and the Seller should be negotiating the deal as they normally would. Once they have agreed on a price, hopefully as close to the $160,000 possible, they sign the contract and the deal goes pending, subject to 3rd party approval. The 3rd party approval is nothing more than a contingency and should have an end date on it. It's no different than inspections, loan approval etc., except that it is a Seller contingency. It is a contingency that needs to be removed or it will expire with time.Once the deal is signed, by all parties, you are now in a position to submit the short sale package to the Lender. Then the wait begins.It's important to remember that, if you are working for the Seller, your goal is to get them as much as you can for the property in a reasonable amount of time. By doing this you are limiting their liability created by the "short" and you are giving them a good chance to avoid a foreclosure by presenting a fair contract to the Lender.So, if you are inclined to handle some sort sales. Do it right. I know short sale is the "buzz" word right now but as professionals we need to understand what we are doing. There's a lot more to it than just throwing it out there and hoping it sticks. If that is what you are doing then you are harming the consumer and need to stop. I hope this post helps. If there are any short sale experts out there that feel this info is incorrect please let me know. I'm trying to learn as much as I can. Thanks.

Short Sale Submission Letter

Posted by Bryant Tutas on June 14, 2009 at 8:00am

Hi folks. I'm sure there are many of you that are either doing short sales or want to do short sales. Therefore, I am posting this sample cover letter that may help you when submitting a short sale package to the lender. Just remember, you are submitting a fully signed and accepted contract and asking the lender to remove the 3rd party approval. You are not asking them to accept the offer. The lender is not a party to the contract. The offer has already been negotiated and accepted by the Seller.Also, check with your Broker and your State's laws concerning short sales. I am a Florida Broker and this is how I handle short sales. This is my opinion only.*************SAMPLE SHORT SALE COVER LETTER***************Ref: LN# XXXXXXXXXXX345 Saint Blasse Ct Kissimmee Fl 34758Bertha Tutas SSN# xxx-xx-xxxxTo whom it may concern,Following is a complete short sale package. We are requesting a removal of the 3rd party approval clause in the attached purchase contract.Included are 56 pages:*Authorization to release information*Fully signed purchase contract with addendums*Buyer's pre-approval certificate from Bank of America*A copy of the escrow deposit*Preliminary HUD 1*Current listing agreement with addendums*Listing history*MLS property print out*Property market analysis*Hardship letter*Seller's financial statement*Last 2 years tax returns*Last 2 bank statements*Last 2 paycheck stubs*Proof of child support paymentsMy comments:This property has been on the market since 01/04/08. It was first offered for sale at a price of $129,000. The property has been extensively marketed on the MLS, Realtor.com, Craigslist, Zillow, Trulia, Cyberhomes, Virtual tours and was syndicated to over 500 web sites.Unfortunately, with the market decline, there was no interest in this property. The property has functional obsolescence being that it only has 2 bedrooms, a 1 car garage and sits on a "back flag" lot. With over 1200 homes available in Poinciana and only 30-40 selling per month this property was being overlooked. We slowly started lowering the price, however, trying to avoid getting into a short sale situation, we were not able to price the property low enough for the market to be interested.Finally, the Seller, due to the hardship outlined in her letter, had to vacate the home. As hard as she tried to keep the house she could no longer afford to live there. At that time, we reduced the price to $109,000 then slowly reduced every 2 weeks until there was an interest. There were NO showings until we reduced to $59,000. Several days after reducing to this price we received and accepted the attached contract.There has not been a 2 bedroom home that has sold, on the Osceola County side of Poinciana, since August and there has only been 2 in the last 4 months.Based on current market conditions and the fact that this property is not only functionally obsolete but also a short sale, we feel the agreed purchase price of $60,000 is far better than the price the property will sell for if it is foreclosed on and placed back on the market. We have done everything possible to get as high a purchase price as the market will bare.I have 14 years experience as a Broker specializing in selling Poinciana property and on behalf of Ms. Bertha request that Country Wide accept this short sale so we can move forward towards closing.Please fee free to contact me with any questions or additional information that you may need. Thank you in advance for your attention to this matter.

Why I Negotiate My Own Short Sales

Posted by Wendy Rulnick on June 10, 2009 at 10:03am

In the last couple of days I've been approached by two Destin FL sellers who wish to do Short Sales. After explaining the Short Sale process, I explained what items I would need. When I got to "financial worksheet" etc. I was stopped in my tracks. These sellers told me that their attorney said not to turn over any information, that he would be handling the short sale negotiations. I immediately told the sellers that I will only take the listing if I handle the entire transaction including bank negotiations. Why?To take on a listing in this market, and any market, involves taking a risk. That is, a substantial business investment covering the cost "doing" business, which includes time, advertising, payroll, insurance, licensing, internet, phone, rent, etc. etc.. In a normal market, the calculated risk of the business investment is that the listing will most likely sell, and the burden of expenses will reimbursed, plus some business profit. With a Short Sale, the risk is much higher. Why? The Short Sale lender may not approve the sale. And the time investment to reap a return may be five times longer than a normal sale, reducing any profit if the sale is approved.To lessen the key business risk of an unapproved Short Sale-- both for me and my seller, I must control the Short Sale from start to finish. Why? Because I can:Assemble excellent lender packages personally reviewed by meDirectly and immediately respond to negotiators' calls and emailsImmediately provide well-written market narratives and critical analyses proving priceEnsure that appraisers and bank BPO agents understand the subject property's challengesImmediately provide additional documentation required by the lenderKeep the parties well-informed and in the dealDocument all tasks in detail for transaction-saving referenceProvide creative solutions to negotiators' demands such as promissory notes and cash contributionsUse twenty years of negotiations skills to ensure successCan a third party do all this? Perhaps. But I know I can. If I pass along the critical Short Sale negotiation stage to a third party, my company's business success is entrusted to others, as is my seller's chance of approval.It's Wendy!Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.Destin FL real estate Short Sale Pre Foreclosure Help.Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204Email itswendy@rulnickrealty.comWendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for almost 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she negotiates successfully to her dients' advantage. She is supported by a team of top buyer specialists. She lists and sells homes, condos and townhomes.All Rights Reserved. *Why I Negotiate My Own Short Sales* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity. Copyright © 2008 by Wendy Rulnick.This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.

22 Questions to Ask the Short Sale Lender

Posted by Wendy Rulnick on June 10, 2009 at 9:58am

Are you at a loss for words with the Short Sale lender? Here are some questions to pose when you check in on your Short Sale transaction status. Even if you've asked some of these questions before, you may want to ask them again, and repeat certain questions on each call. Many times, you'll elicit a different answer or discover a problem that may help you get your approval more quickly.1. Have you received our package?2. Is anything missing from our package?3. Has the loan been submitted as a short sale (or "referred" with Countrywide/Bank of America)?4. Has a negotiator been assigned?5. When will a negotiator be assigned?6. How do you spell the negotiator's name?7. What is the negotiator's email address?8. What is the negotiator's direct number, extension or fax number?9. Has an appraisal or broker price opinion been ordered?10. Can you order the appraisal?11. When will the appraisal be ordered?12. Have you received the appraisal back yet?13. Is the appraisal value within range?14. Has the second mortgage been "serviced released"? If so, who is the new servicer?15. Is there MI (mortgage insurance) on the loan?16. Is the loan Fannie Mae, etc?17. Is your company delegated (authority to make decision on approval)?18. Can you read me any notes on the file?19. What was the last action taken on the file?20. Would you email the negotiator for me?21. Would you ring the negotiator for me?22. Would you connect me with the supervisor?It's Wendy!Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.Destin Florida real estate Short Sale Pre Foreclosure Help.Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204Email itswendy@rulnickrealty.comWendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Crestview, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she negotiates successfully to her clients' advantage. She is supported by a team of top buyer specialists. She lists and sells homes, condos and townhomes.All Rights Reserved. *22 Questions To Ask The Short Sale Lender* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity. Copyright © 2008-2009 by Wendy Rulnick.This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.

Short sales are serious business.

Posted by Bryant Tutas on June 9, 2009 at 12:47pm

Hi there. Whether you like short sales, want to do short sales or want to avoid short sales, they are here to stay. Short sales are a major part of the market and in my opinion will become even more so. Lenders WANT to do short sales. A successful short sale cuts losses and keeps the lender from owning a declining asset.This post is about taking control of the short sale situation from the get go, knowing what we are doing, preparing the Seller in advance of what to expect and being strong enough in our negotiation skills so we do not have to accept whatever bone the banks want to throw us.Here are a few of my thoughts:* With a short sale we are submitting CONTRACTS, not offers, to the lenders. We are not asking them to accept an offer we are asking them to accept a "short" payoff so a contingency can be removed from the CONTRACT and the deal can close. Anyone who submits an offer to the lender to see if they will accept it does not know how to handle short sales and is wasting time and clogging up the system.* The lender is NOT a party to the contract(s)(listing or purchase). They do not control the purchase price and the commission. They do have control over how much they are willing, or able, to accept as a payoff. If this payoff figure is too high then a solution needs to be found. The solution may be to have the seller sign a promissory note, raise the purchase price or lower the expenses of the deal(commission etc...). However, lowering the commission in the deal does not mean the seller is off the hook for paying the FULL commission as agreed in the listing agreement. They can bring cash to closing to pay the difference and/or they can sign a note to the Broker.* If the lender, investor or PMI company ask the Seller to sign a promissory note, a good short sale negotiator, will be able to negotiate the amount of this note downward or may even be able to make it go away. The PMI companies almost always ask for a promissory note to be signed when the seller can afford to make payments. Be prepared for it. If the Seller has funds in the bank, IRA, mutual fund and/or decent income chances are they will be asked to pay a promissory note. This should be ascertained at time of listing. Get a complete financial package from the Seller prior to listing the property.*Our job is to do the best job we can to help qualified short sale sellers salvage their credit. It is the Sellers sole decision on whether or not to sign a promissory note. Their willingness to sign a note needs to be established at time of listing so we don't waste our time trying to help Sellers who are not willing to help us.*When a PMI company comes back requesting the seller sign a note I take it as an acceptance of my short sale request. Now all I have to do is negotiate the note. I have had a note request of $135,000 negotiated down to ZERO and one for $50,000 settled for $1,500 at closing. BUT the reason I was able to negotiate is because the Sellers truly could not afford to pay. Remember we are helping folks with a legitimate hardship not people that just want to avoid paying a debt.*Commission should not be an issue in a short sale. A Broker/agent should know before listing the property what lender is being negotiated with and how much commission they will "allow" almost all are 5% to 6% if there are two Brokers...and 4% if there is only one Broker. Fannie Mae will allow 5%. Countrywide will allow 6% as will Wells Fargo and Washington Mutual. I just closed a on Countrywide short sale and in addition to the commission I was paid 1% as reimbursement of costs to maintain the property for a total of 7%. We need to know these things.Folks, agents are getting screwed on short sales because they don't know what they are doing. Sellers are getting screwed because they are hiring these agents.Short sales are serious business and need to be treated as such. Sellers need to seek legal and tax advice and then hire a Broker/agent that understands the process.My biggest frustration is the lack of education of folks trying to handle these transactions. The public is being harmed and that goes against every thing being a REALTOR(R) stands for. Let's take the time, to learn what we need to know, so we can help folks get on with their lives. Let's all step up to the plate. Not only can we help people but we can get paid for doing so!!! Are you ready to get serious?

WHAT TO DO?????????

Posted by Sue Burg on November 30, 1999 at 6:00am

I am so tired my eyes hurt and I really just want to sleep without being disturbed for a day or two. I'm at my minds end trying to deal with a cash client. All the other agents in my offoce say they would love to have a cash client headache, maybe, but not this one! He has pretty much tied my hands as to what he wants. He does have the cash, it's verified. But he only wants to lookin three areas and is unwilling to look anywhere else. That would not usually be a problem except he want the property rented! Thats the problem. When there is a short sale or an reo or the tenants find out their home is being sold the first thing they do is move. So, all the homes in his areas are vacant and he dosen't want to have to find a tenant. I did have one in the area and price range. The owners came to me, I did the CMA, the price was not what they expected so they are trying to decide what it is they want to do. Now, mind you, they HAVE to move. They have no choice. It is a win-win situation. They can stay and pay fair market rent and my buyer is happy. Everyone wins. The husband is not realizing that they will not be able to keep the house in their current situation, but she was expecting more money. Not in that area with the size of the house and the repairs that need to be made. Of course, she knows the house down th

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Note: this page contains paid content.