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