Short Sales In Today's Market !

The market has picked up and more buyers are out looking for homes, my job is to help guide those buyers and homeowners who are selling their homes ! I want to touch base and give everyone a quick refresher on what a short sale is and what the process actually is, there are still quite a few leftover on the market and new ones coming onto the market.

What Kind Of Short Sales Are There On The Market ? 

• Approved Short Sales:  This is where the bank has already set a price that they are willing to take for the home.  These kinds tend to move a bit quicker since the "negotiations" have already taken place, unless you plan on submitting an offer below asking price.  These can usually close within 90 - 120 days after going to contract.  

• Un-Approved Short Sales: This is the less predictable short sale because not only has the bank not agreed to a price but more than likely the homeowners are still in the process of submitting all of their paperwork as well.  Normally in order to submit your offer to the bank you will need to provide them with contracts, which means you will need to use your down payment to get into contract.  

What Is The Process Of Purchasing A Short Sale ? 

1. Meeting with your buyers broker, deciding on your offering price based on the actual market value of the home.  Take the time to review how long it has been on the market, and for your own knowledge what the Lis Pendens is on the home.  
2. Presenting the offer to the homeowners, ideally they will accept the offer or counter.  You can sometimes ask the homeowners to do fixes or repairs as well, but your agent will advise you to if this will help or hurt your chances.  
3. Once you have an accepted offer from the homeowner, you will than go into contract on the home.  Your offer will now be submitted to the bank for their approval this is where the timeline becomes less predictable.  
4. The bank will send out their own appraiser to perform a BPO of the property.  This is where they  will go look at the condition of the home, and of the surrounding comparable homes.  This is why basing your offer on the current market value is key, if they see your offer is considerably less than it chances are they will not accept.  Remember the bank does not necessarily have to counter your offer they can simply reject and you will need to re-start the process to change your offer.  
5. Hopefully you will have gotten your offer accepted or successfully negotiated with counters to get the home for the price your comfortable with.  Your mortgage broker should have began your process of you obtaining your commitment so that all the attorneys can schedule the closing and get all of the necessary paperwork from the homeowners for their short sale to be complete for you to be able to close ! 

Truths & Myths Of Short Sales 

• Myth: The homeowners have defaulted on the house and have not paid there mortgage.
• Myth: Anyone can short sale their home if they owe more than it is worth.    
• Truth: The homeowners must have suffered some circumstance for no longer being able to afford their home, and are unable to make other arrangements with the bank.  

• Myth: You can offer the bank whatever you want, they would rather sell it than hold onto it! 
• Truth: The home may not be worth what the remaining mortgage is on the home, but on average the bank wants 96% of the market value of the home regardless of what they are owed. 

• Myth: You can use any company to list your homes as a short sale! 
• Truth: You can, but your home will not sell.  You need to hire an agent and company that has worked on and with banks on short sales in your area.  Only a knowledgeable agent will be able to properly handle a short sale, the reason their is a higher commission rate is because of the extensive additional work we must do.  

• Myth: Whatever is left in the home the bank will come and clean out before your closing.
• Truth: What you see is what you get, literally this unfortunately includes whatever leftover debris is left by the previous owners.  In the case where the homeowners are still in possession they will almost always take their belongings and properly dispose of what they are not taking with them. 

Do You Have To Sell Your House ?

There are of course times as a homeowner that you may have put your home on the market, and than life happens and you are either no longer able to sell, or you simply have decided this is not the right time for you to move.  Now depending on where you are in the process of selling your home is really the key factor here.  

On The Market With No Offers Or Contracts

If your home has been on the market for a day or a year, but you are not in contract you have the right as a homeowner to withdraw the listing from the market.  Now there is a difference in withdrawing and releasing your listing so you should pay close attention to which one the company is agreeing to.  

• Withdrawal - It means that the company is willing to pull the home off the market, but you will not be able to re list your home with another company until the original date of expiration.  
• Release - This is where the company is not only willing to pull the home off the market, and allows you to re list it with any other company before your original listing agreement.  IF you are pulling your home off the market because you are not happy with the company and the work they are doing for you this is what you would want for them to do.  

Things happen day to day, and sometimes a homeowners reason for selling can change quickly.  If your circumstances change and you do not want to sell for personal reasons your best bet is to call your agent and just be honest with them.  

We never want a homeowner to feel as if they are being forced to sell their home, but our job is to advise you what all your options are.  With the fall and winter coming upon us I am hearing many sellers say they are not sure they want to stay on the market because they believe that the market is slowing down.  This is only true to a point, and I have written about this quite frequently.  Although we do not have the same quantity of buyers, we have a better quality of buyers because those who are out looking in these months are considerably more serious than those who come out "browsing" in the spring time. 

On The Market With Accepted Offers

Now usually if you have gotten this far and accepted an offer something pretty drastic must have happened that you are not able to sell.  If you simply have had a change in circumstance and must stay in your home than you must advise the buyers in a timely manner, you also must keep in mind you will have to reimburse them those fees that they incurred such as the home inspection.  

Many times I see this happen is because a homeowner discovers they owe more than they thought, and the accepted offer is not what they need to sell.  You have a few different options before backing out of the deal, first you MUST inform the buyers immediately of this change is circumstance.  If you have suffered a hardship than a short sale may be an option for you, but your buyer would have to agree to this because it does change the terms surrounding the sale.  Your other option is to simply bring the money that is missing to the closing table.  

In either one of these circumstance again being honest with your agent is not only a must but you must inform them that these things could be potential issues before you list your home with them.  I can't tell you how many homeowners run into an issue because they hoped it wouldn't be a short sale and attempted although not to be manipulative kept it from their agent.  

Your Home Is Under Contract 

This is where it can get tricky and you really must be careful.   Most of the time the only provisions to be able to get out of a real estate contract is set up for the buyers.  If you are in a position where you truly can NOT sell your home than you should know that it is not always as easy as the buyers agreeing to it.  

• You will have to reimburse the buyers their out of pocket fees (deposit, home inspection fee, title fee, lawyer fees, survey fees, etc.)
• You do open yourself up to be sued by the buyers, in which case you can be forced to sell them the house.  They can sue for specific performance because your breached the contract, although this is a lengthy and costly process not all buyers are willing to just walk away.  
• Unfortunately you must also keep in mind that your real estate agent did their job, they brought you a buyer with a valid commitment to buy your home.  It is not up to the agent whether or not they pursue being paid for that work, it is only up to their company.  
• The buyers agent will also have the right to seek their compensation for bringing you this buyer.  Even if the listing company does not want to seek their payment, they will be sued by the buyers broker.  This is why many times listing companies are not left with much choice about whether or not they request compensation.  

For those buyers who are reading this because they are currently in the process of dealing with this, my best advice to you would be to try and salvage the deal if you can.  Keep in mind that life can throw curve balls at homeowners that they did not expect, and they may really not be able to sell.  It is obviously upsetting to lose the home, but there are many homes on the market your buyers broker will work hard for you but their was no way for them to predict this happening even for the listing agent many times this call comes as quite the shock. For all parties involved open communication and honesty is the best way to deal with this kind of situation!

Open House Event Weekend !

This is just one example of what makes Coldwell Banker Residential Homes different from your ordinary brokerage.  We think outside of the box, and reach out to all buyers in new and creative ways!

This is a wondeful opporutnity for homeowners to take advantage of, now is the time to list your home, for the next 2-3 months their will still be serious buyers shopping around.  Someone who is still looking for their dream home, WILL make a purchase before the holidays get into full swing!

Are Full Service Real Estate Agents Worth The Money ?

Consumers are always looking for ways to save money, and paying real estate commissions can amount to tens of thousands these days. Not an insignificant sum to most people. Is it worth it to hire a full-service real estate brokerage over a discount service? Reasonable question. It's one I hear often. And the answer is it depends.  

Type of MarketplaceIf you're in a seller's market right now, homes are probably selling the minute they hit the multiple listing service. A one-eyed sheep with two paws tied behind her back could plop a home into MLS and get an offer. Will it be the highest price you could get?
Buyer's markets exist when inventory exceeds the supply of buyers. In these markets, some homes aren't selling at all. This is where expertise and extra work pays off. Listings that sell at top price are typically those exposed to the most buyers, which are priced well, marketed well and show well. 
MLS and the Internet
I cringe when I see new listings hit MLS without a photograph because I know that agents and buyers are passing them over without a second thought. Many multiple listing services accept 8 to 12 photographs nowadays. For that reason, many full-service agents hire professional photographers and shoot double the photos required.                      * The pros spend considerable time sorting through photos to select those with the most light, the best angles, sharpest contrast & color.
                    * Photos are cropped and resized to accentuate positive attributes.
                    * Each photograph is entered into MLS with a full-length enticing description.

When I see a photograph taken by the multiple listing service instead of a pro or the agent, I also see a lazy real estate agent who doesn't care enough or isn't getting paid enough to properly market her client's property.  
Signage
Lots of mom 'n' pop operations and discount brokerages don't spend money on professional signs because they don't believe in it or they can't afford it. Good signage is free advertising. Many full-service firms will advertise:
                    * Main office phone number
                    * Agent's personal cell phone or voice mail number
                    * Web site for more information
                     * Virtual tour links

Marketing Materials
Full-service companies tend to project quality, and that means four-color flyers and four-color direct mail pieces. The days of hiring neighborhood kids to toss photocopies on neighbors' front steps are gone. Full-service marketing is first class.  
Open Houses

Not all homes are right for an open house, but those that are require finesse. This means working the buyers who come through by pointing out impressive features of the home without making the buyer feel oppressed or hounded, and that in itself is an art. It requires the service of an experienced sales person. Many discount brokers refuse to hold homes open.
Full-service agents counsel sellers. They find out what made the seller decide to buy the home and how that moment happened. Then, they employ that knowledge at open houses. For example, suppose a seller said that moment came when she first stood gazing out at the pool. When she turned to her husband and gasped, "I can't believe we can afford to buy this home." Good sales people at an Open would ask buyers to stand in that same spot by the pool. Then, they'd share the seller's first experience verbatim.  

Negotiation
Real estate is an extremely competitive business, and there are many agents fighting for the same listings. A full-service agent who wins the listing is probably a good negotiator, a person you want on your side during offer negotiations. Think about it. Agents who can persuade you to pay what they feel is reasonable, will probably persuade a buyer to pay your price. Ultimately, that means more money for you.
Final Sales Price

Sometimes full-service agents lose listings because the seller was promised a higher price based on hot air and a lower commission. It's these listings that often show up in MLS a month later with reduced prices. The amount of the price reductions, not surprisingly, tend to exceed the difference in commissions between the dualing agencies! In these scenarios, sellers received fewer services and ended up losing money on the sale as well.
If you can't decide between an agent who charges 1 or 2 percent less than another, think about how you would feel if you had to reduce your sales price, say five percent, to get the house sold. Ask the agents to show you their last 24 months of price reductions and compare them.

How Much Do Agents Make?
Agents are paid by brokers. Brokers retain a portion, sometimes 50%, and pay the balance to the agent. From that, the agent pays her overhead and taxes, which can easily amount to 50% of the net. A listing agent's true salary ranges from 20% to 30% of one-half the commission. Full-service agents typically spend more on overhead than their competitors; by refusing to compromise service, they tend to charge more.

Key Elements To Get Your Home To Sold

I recently was going thru some key points during a listing appointment, and have decided to take the time to put "pen to paper" so to speak.

When someone list's their homes I like for them to have a clear understanding that I don't just want the listing, I want the home to sell.  That is our purpose, and believe it or not many people do not realize that if you are going to list your home with a Realtor you should be ready to move within 60 - 90 days.  Not all homes take a 6 month period of time to find a qualified buyer, not if they are marketed properly and priced at what the market calls for.

I have decided to take the time to elaborate on some of the tools and resources I use to help my listings get to sold.

Professional Photo's and Videos 

This is a great tool, your home will not always have perfect light when buyers come to see it, or some homes are vacant.
The company I work with for the pictures, also does a Virtual Tour which is uploaded to YouTube allowing your potential buyers to feel as if they are walking thru your home, all the while they are sitting in their living room.  This does 2 things, it catches the buyer and makes you that memorable listing because virtual tours are not yet common, and gets more serious buyers into your home !

** Sellers Tip **

Buyers in todays market, spend most of their time searching for their new home on the internet.  Those pictures are your very first impression, if there is not enough or they are not well taken you could be overlooked.  On more than one occasion I have had to push for a buyer to go see a home that they didn't like the pictures on MLS, after some prompting they agree to go and almost all the time they can not believe how the home showed in person.  

Another inside tip for sellers, many websites have their own way of how the homes they show in their search results show up to the potential buyer.  Many first go by what kind of account the listing agent has with the company, second they go by how many pictures you have of the home ! Let your listing agent take pictures, trust us we spend 90% of our time in people's homes we know what they are looking to see ! 

Here is an example of a home I personally have listed, and used professional photography to give it an edge on the competition.

                                                                                                                                                        

Staging

Any home can benefit from staging, a professionals eye will be able to give your home a un-biased opinion.  

Realtors will know what can distract a buyer, even though what distracts them has nothing to do with the home they are potentially buying.   

Sometimes simply moving around things in a room, can give it the illusion that it is bigger than it is, some de-cluttering is always recommended you don't want your home to be cold or sterile feeling there is always a happy medium.  

** Sellers Tip **

Begin your packing the moment you list your house on the market, not the everyday necessities but the things you can do without. 

If your home is on the market your ultimate goal is to be moving, it will help de-clutter the home for the prospective buyers that will be coming in to view your home, and you will need to pack those things at some point, I look at it as positive thinking ! Many storage facilities offer specials for very low rates, and the benefit to you will be priceless.  

Now some people have decided to buy their new home first, and than list their home for sale.  Vacant homes can be a wonderful thing, but buyers are visual, I work with a wonderful company who does staging, it is at no cost to my sellers.  Their is no pesky rentals fee's it is all done virtually, and again it is a benefit of using a professional photographer.  

                                                              After                                                                   Before

This home was bought by investors, renovated but they did not want to have to rent furniture for the pictures.

Online Marketing 

The absolute best marketing tool you could possibly have today is the internet.  I don't mean just Zillow, Trulia, or Realtor.Com.  

Social Marketing is the best exposure you could ever ask for, you know how you re-united with past colleagues, classmates, or even extended family.  You will never know if they or someone they know is looking to a buy a home, you want your home to be blogged, twittered, and facebooked as much as possible.  Not only does it attract prospective buyers it will catch the eye of other agents we all network together and it is the easiest way to let other realtors know about our listings all over Long Island.   

On any given day you can look at my Twitter feed and know exactly what I am doing, and where on Long Island I am.  The same goes with other realtors, if we are having an open house we like everyone to know.   When I first list a home I will often blog about it, conveying the excitement I have about this new listings to my network and many people will share this with others.  Remember you never know where your buyer will come from !!