How the Experts Get Deals Closed
You’ve seen, heard or read about the foreclosure numbers. Millions of homes are in the foreclosure process, and millions more will be joining that list.
Banks, lenders, lien holders, service processors, mitigation departments, investors, buyers and sellers all play their part in trying to negotiate a winning hand.
At the core of this situation is the home owner, who in most cases would like to avoid foreclosure while resolving their mortgage debt crisis. One of the solutions for home owners has been short sales.
The rise in short sales has garnered praise, frustration and anger from all sides, including buyers, sellers, lenders and real estate professionals. Yet, the short sales process is working for those who know how to navigate the systems.
So what are the experts doing that are getting the deals closed?
— The main item can be summed in two words — Exit Strategy
In compiling our research data, we found a common theme among those companies and professionals who are successfully handling short sales. The way they are handling it can be summed in two words, “Exit Strategy”.
Successful short sellers develop a clear exit strategy for the lenders. They show the lenders their profits if they take the property through the foreclosure process, versus their profits if the lender takes the property through a short sale. This puts the expert in a better negotiating position with the lenders.
In addition to the exit strategy, other key components done by the experts that improve their short sales success are:
1. Seller must be motivated to provide all documents on time. On a scale of 1 to 10, with 10 being the most motivated, experts only work with 10.
2. There is no need to try to influence the price of a Broker Price Opinion (BPO). Instead, negotiate with the lender on profits (recall exit strategy above).
3. Decide if you are looking to offer a percentage below the BPO value or a percentage below an appraised value. They are likely to be two different number with different values; therefore, you should pick one to focus on.
4. Write offers on everything in your area. A very rough rule of thumb is to offer 60% – 70% on properties in an area that you would consider buying; and offer 50% on properties in an area you would not buy.
Experts find it very important to always check the numbers (price, value, profits) and make the offers. After all you are still dealing with sales, and sales are a numbers game.