About Short Sales

When you’re trying to close a sale, your actual starting point is that first meeting with a client. In the short sale business, that first conversation is your key to helping a homeowner in trouble.

If you’re going to be in sales, the first rule is to find out specifically what their issues and concerns really are before you try to sell them anything. When you understand their situation, you’re in a better position to help everyone get what they want. Every experienced salesperson does that.

A short sale investor’s clients are people in financial trouble who need to sell their homes. Their issue is pretty simple, right? They are in default on their mortgage payments, and the lender wants either the home or the money. When you look a little deeper, that doesn’t really tell you what their needs are. Different people are worried about different aspects of losing their home. Facts are important, but a short sale investor who wants their trust and their business will find out what they’re really worried about before moving on with the conversation.

Once you get to the emotional root of the problem, you can focus on creating the solution that will help them the most. As you’re listening to them talk about their problem, you need to be looking for that win-win somewhere in that awful situation. There is usually a win-win there for both you and the homeowner. Your job is to find it, and then help them see it.

Ask them questions before you try and teach them anything, and listen carefully to their answers. This is the time to let them have the floor. Let them tell you what’s going on and how they feel about it and why. When they finish answering your questions, then answer theirs by moving into the Positive Results Conversation.

The Positive Results Conversation opens the door for you to introduce yourself and your services. In this conversation, you can use what you learned from listening to them and explain how you can meet each one of their needs. As a short sale investor, you should focus on helping the homeowner understand the different foreclosure options and how each one might affect this specific situation.

After a good discussion of their options and alternatives to foreclosure, you and the homeowner should discuss the short sale process. Any short sale investor should be able to talk about how this works and why this can be their best option, but you should also be prepared to answer objections from people who don’t trust the system. Together, you can set realistic expectations for the outcome.

Managing expectations is the key to the success of the Positive Results Conversation. If you explain what can and can’t happen to their credit beforehand, that homeowner is able to make informed decisions based on facts instead of wishful thinking. If you don’t get to this part of the conversation, and something doesn’t happen according to Plan A, you could end up with a very angry, suspicious homeowner on your hands.

Finally, don’t try to wrap up the conversation before they hear everything, even if the seller asks you to. There is a reason that each one of your talking points is in your presentation, and you will do the homeowner a great disservice by leaving out part of it. You need to make the entire presentation for them to give your offer and your solution the full value it deserves. Without that, it will be much easier for the homeowner to cancel the deal for minor reasons or a slightly better offer coming along from the bank or one of your competitors.

Bring your own personality to the table, but stick to the script and keep the conversation under 90 minutes. By the end of your presentation, the homeowner should be able to see some positive results already: there is a knowledgeable professional in front of them who is willing and able to help, and there is a solution to their problem besides running away from it and watching what’s left of their credit rating go down in flames.

Want to see the entire Positive Results Conversation? Check out our website, and look for the original Short Sale Manifesto. Our experience has proven that covering every topic on the list really does get positive results for everyone. Then you can get ready to submit their short sale package to the lender.

Don’t forget that we put together the Positive Results Conversation from our own experience and successes in the short sale business. We know it works. And you’ll know it too, when other people in your area start asking you to help them with their problem property. You will be known as “the short sale guru”!

Need to learn more about talking to property owners in pre-foreclosure? Check out the Strategic Real Estate Coach resource page and learn our best short sale success strategies!

categories: positive results,short sale,foreclosure,foreclosure options,short sale investing,real estate investing,flipping houses,making money with real estate,real estate courses,business coaching,real estate,self-employment,business opportunities,finance

If you are losing your home to foreclosure, realize that thousands of others are in the same situation. As things look now, thousands more will lose their homes before the economy gets better.

The Foreclosure Epidemic

The increase in foreclosures began with the subprime mortgages that ultimately led to the mortgage melt-down. Many are placing the blame on the mortgage industry; however, no one could have predicted this. The adjustable rate mortgages, known as ARMs were one example of creative financing methods that were great for some people. The benefits of this plan included 100% financing at a low interest rate that was only fixed for 3 years. The plan was to refinance before the ARM reset and rates were increased.

Unfortunately, the economy took a devastating turn; unemployment was up and real estate values declined. When people lost their jobs and were unable to keep up with their mortgage payments, this meant that they would not be able to qualify for a new mortgage to refinance their home. Those who were fortunate enough to keep their jobs were also unable to refinance because their home lost so much value that they owed more on their mortgage than the home was worth

The Crisis Continues

The devastation continues as people are walking away from their homes. Investors are taking a huge loss and mortgage guidelines are getting strict. Even people with very high credit scores are finding it difficult to get a new, fixed rate mortgage.

Unfortunate things happen to responsible people. Foreclosure is painful, no matter what the cause. People who face losing their homes to foreclosure feel helpless as they wonder who to turn to for help. Many are tired of the phone calls and letters from their mortgage companies demanding payment.

To make matters even worse, distressed homeowners are flooded with mail from companies who promise to help with guarantees to save their home or stop the foreclosure process. There are reputable foreclosure consultants who offer solutions, but most of the companies who approach people that are in default on their mortgages are offering a scam. They charge outrageous fees and perform little or no service. These predators can get your name from the legal news or a foreclosure list that they have subscribed to.

Foreclosure Solutions

Now that I have explained how we got into the foreclosure crisis, I will cover some of the options available to you. One is to just walk away. Though many people are doing this, it should be your last resort. A foreclosure is very damaging to your credit report and it is one of the items that take the longest time to be removed from your credit history. There are cases where this is your only option, but there are others to consider as well.

You can always contact your lender to see if they will consider a loan modification plan to help make your payments more affordable. They might reduce your interest rate or increase the term of the loan. They might even go as far as reducing your balance and writing off some charges. Loan modification didnt used to be an option when people were already in foreclosure; however, today, lenders are altering their practices as they stand to take a greater loss with so many mortgages in default.

Another solution is to list your home and see what kind of offers you get. Chances are you will not be able to sell the home for what you owe on the mortgage because market values have declined sharply. In this case, you need to negotiate with your lender to convince him/her to accept a short sale. A short sale is a transaction where the lender is willing to accept less than what is owed now rather than foreclose on the home, incur legal expenses, wait out the redemption period, evict the homeowner, secure the home, list the home, etcAll of this takes time and effort; meanwhile, values continue to decline and the mortgage holder takes a greater loss.

Homeowners can negotiate with their lenders to reach a solution; however, many do not know how to go about it, or they are just too stressed out and emotionally drained to handle the task. It is important that you know what to say and how to present your case so your lender will be willing to cooperate. There are reputable companies who provide these services for a reasonable fee.

Foreclosure is what occurs when an immovable property gets repossessed by a bank or another lender who offered someone a loan to pay for the property and that person is no longer able to make payments on the loan. In order to foreclose on a property, the lender needs to show that the borrower has somehow broken the terms of their loan agreement. This becomes secure when a lien is placed on the property. When the process is over with, the lender has foreclosed on a mortgage or a lien.

Various Kinds of Foreclosure

Once a mortgage payment has been defaulted on, the lending agency can begin foreclosure proceedings. Two specific kinds of foreclosure occur most commonly in the United States, although individual states have additional kinds of foreclosure. Applicable in all fifty states, the most commonly encountered form of foreclosure is foreclosure by judicial sale.

The property that has been foreclosed on is sold by the court and the money earned as a result of its sale is used to pay off the lender whose loan has been defaulted on by the borrower in foreclosure by judicial sale. Any additional funds go to anyone else who has a lien on the house and finally to the mortgagor.

Another form of foreclosure, foreclosure by power of sale, allows the mortgage holder to handle the sale of the home or property without any court involvement. This tends to be a better option than foreclosure by judicial sale. Most states allow for this type of foreclosure.

In these two examples of kinds of foreclosure, the earnings from the sale of the home or property are used in mostly the same manner. Other foreclosures are available in certain states; the way they are conducted will depend on the state laws.

A more strict type of foreclosure makes the mortgagor continue to pay on their mortgage for a specific amount of time. If they continue to be unable to make on time payments, the title to the property in question is handed over to the lending agency and they are not required to sell the property.

Such a form of foreclosure was the original form, though now it is only available in New Hampshire, Connecticut and also Vermont.