How to win in multiple contract situations...short sales & reo's

Art Grace’s ways to win multiple contracts:

Write a perfect contract – it reflects your professionalism. Put in all details for listing agent on page 10 of contract, dot the i’s and cross the T’s.

Be aware of appraisal train wreck ahead

Don’t write in “As-is” contract – home inspection for informational purposes only.

Read the bank addendum and see if the addendum says you have the right to inspect, or does it allow you to have a home inspection opportunity?

Reasonable price is paramount to the bank – don’t make ridiculously high offers – especially with FHA loans or a price you know won’t appraise

Submit comparables that will help your offer and appraisal through when you come in high

Ask for a repair credit and any balance will be returned to the seller prior to closing – not all banks will approve

Fannie Mae will not allow any repairs prior to closing and you cannot obtainFHA financing unless it’s a 203K loan program

Have a licensed contractor or home inspector preview property prior to submitting offer – relieves obligation of home inspection contingency
Human element of buyers does not impact the sale as much as it does with arms length transactions

Don’t make multiple contacts to listing agent – don’t be threatening or confrontational or overbearing. Listing agent doesn’t hound their asset manager so don’t hassle them.

Email is typically the best way to communicate with listing agents

Scratch through paragraph 13 on contract removing the right to change financing.

Highest and best is still critical – Competence of agent, title, mortgage company in addition to big deposit, quick closing, waving inspections, etc.

Write on bank addendums or refer to your client’s addendum on their addendum unless it’s Fannie Mae – they don’t allow you to alter their addendum

Watch out for anti-flipping rules in Freddie/Fannie addendum

Short sales

Problem #1 – there are too many processes – virtually a process for every agent

Ask the listing agent how they are going to handle the process

Don’t avoid them – they are everywhere and you can make a lot of money doing them

Write into the contract that the seller will only ratify and send one offer to the bank for approval

Get written evidence of rejection if seller is truly denied

It is not possible for the seller to provide a release of recordable lien in recordable from at the time of settlement-lender always has 90 days – not a “real” clause so strike the sentence in the addendum

Seller Side:

Get seller in touch with attorney to discuss short sale versus foreclosure and ramifications of bankruptcy

Avoid tax consequences by utilizing tax relief act that is in effect until 2012 if it is your principal residence – insolvency exemption as well to relieve tax obligation due to debt relief. Always have seller consult with tax advisor and attorney first – insolvency exemption can allow investors to sell under a short sale situation

Most success in short sales comes when sellers deals with lender directly – agents second – short sale negotiator 3rd (fees can be too high)

All in all, maintain your professionalism and communication with all parties involved in order to ensure a fair shot for your clients.

What's going on with appraisals?

Here it is in a nutshell!
https://www.thinkbigworksmall.com/public/showArchiveVideo/1/4909

Breakfast with Janet Evans

Janet Evans, 5 time Olympic champion for swimming, came to our Business Networking group to speak to us on how to be a champion. She mentioned that being a champion isn’t about winning. It’s about how you play the game and the vision you create for yourself to get you there. You set goals to get what you want, we all do. But once we reach the goals what do we do? Do we high five our friends and sit back on our laurels because we reached the goal we set out to reach? Or do we step back and reset that goal? Make it better, more challenging; make you reach higher than you thought you could? That’s what Janet did when she made the Olympic team, she realized that it wasn’t just about making the team, but about winning the gold and ultimately being proud of herself no matter how she performed. A champion, she said, is someone who loves what they do, inspires others, does their best, doesn’t listen to what other say, believes in themselves, doesn’t always have to win and at the end of the day is satisfied with the end result. Her speech defiantly gave you something to think about.

Economic Outlook

I recently attended an Economic Summit at our local Realtor association. It was an informative session where we heard about the National economy and how it compares with our local economy. Dr. Fuller with George Mason University informed us that we would need to have nationally 100,000 new jobs per month for one year for the level of unemployment to stay where it is now. If not, the level is going to continue to rise until 2011 when job loss should stabilize because by then our economy will have been able to absorb all of its losses.

One point I found interesting is that in the end, once the economy has stabilized, it will be more streamlined. When there is a downturn, it makes us change our ways to find better, more economical ways to do things, thus legislation is formed that in the long run, helps our economy.

The Washington DC Metro Area is quite unique. The national outlook seems pretty bleak, but in our area, the GDP (Washington GDP) is higher than the National GDP, our unemployment level is substantially lower at 5.6 than the National unemployment rate which is 8.6. This is due in large part by the opportunities within the Federal Government and contractors/consults that move to the area and/or move their businesses to the area. We are very fortunate to live in the DC Metro area as opposed to other parts of the country that are suffering devastating blows to their local economies, high levels of unemployment which in turn produces high levels of foreclosures and short sale situations.
All we can do is wait and see how it all pans out in the long run.

Our Crazy Market

It’s a crazy mixed up real estate world today and we are faced with an uphill battle for the next several months, if not for the next several years. We are looking at quick turnarounds on properties if they are priced right and staged properly. We are inundated with buyers and rates continue to be at historically low levels, but we are fighting the untouchable appraiser and underwriters in terms of attaining values. It has always been my opinion in an arm’s length transaction that market value is what a buyers is willing to pay for a property and what a seller is willing to sell for.

In today’s environment, we are faced with a challenge of not being able to communicate to our lender with the appraiser an as a result properties are not appraising for the sale price. As of May 1st appraisal management companies have been inserted into the real estate transaction. This has resulted in the consumer not being able to get values on properties on their purchase. Appraisal Management Companies are taking a piece of the pie for doing nothing more than assigning an appraiser to appraise a property.

What’s the problem you ask? The problem is top quality appraisers are not getting paid what they are worth and the appraisal opportunities are going for lower fees and to lower quality appraisers. Until this practice gets overturned, we will be faced with making the role of the realtor more critical in today’s real estate transaction. We are here to help.