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So you want to buy a short sale?

Re-posted from http://memphisrealestatebuzz.com

Second only to Foreclosures, Short Sales create a lot of buzz among investors and home buyers looking for the almighty good deal. A short sale is a property that is sold for less than is owed on it. Pretty simple concept: you bought a house for $200,000 in 2004, with 10% down. Over the years you pay down your $180,000 mortgage to $160,000. Then for one reason or another… say, you lose your source of income, you REALLY need to sell. BUT, because of the current housing market, your house is now only worth $130,000. A tough pill to swallow, but you have to unload the house. Well it beats having a foreclosure on my credit report. But what about the $30K difference? How will I come up with that money? Welcome to the world of Short Sales.

Jay Thompson, The Phoenix Real Estate Guy, wrote one of the most concise and informative posts on short sales that I have read, so I will skip the mechanics here and just say that the banks, being the altruistic entities that are, just love negotiating short sales with distressed owners, and what they love even more is working offers from buyers expecting a deal. Maybe love is the wrong word, as it implies some human element. The banks are not human, even though there is an interface with an Asset Manager, who, supposedly can make decisions. Human decisions can be measured in milliseconds, but bank decisions can take weeks. The bank does not care if your buyer’s loan lock or lease is running out, or even if she is a well-healed investor paying cash. It’s the bank’s way or no way. Oh, and if there is a second mortgage, double the trouble, because in a short sale, as opposed to a foreclosure, subordinate mortgage holders get a piece of the action too.

I closed my first short sale this month. My buyer clients fit all the criteria for Successful Short Sale Buyers:
1. They were not in a hurry to close
2. They could have and would have walked away from the deal at any time.
3. They had a very high tolerance for the erratic and inexplicable behavior of the bank.
4. They stood their ground when the bank’s foreclosure representative tried to squeeze a fee out of them for delaying a foreclosure auction (the bank backed down and canceled foreclosure sales- twice).
5. Their lender was flexible and helpful throughout the process.

So, for a purchase project started before Halloween with me preparing them for the process, Dave and Phoebe were rewarded with a really good deal on one of the largest homes in their neighborhood. Was it easy? Was it worth it? Let them tell you.

Realtors hop aboard the social media bandwagon

51oMYDnf3dL._SL160_Looking at some of the vendors at the NAR Convention last week, old school, pre-technology is still a big seller.  Realtor courses are still being taught that don’t mention the new media, continuing to emphasize cold calls, mass mailings, scripts and door knocking.  I am not criticizing my colleagues who have been and continue to be very successful with those techniques.  If it’s profitable, more power to them.  I always find it interesting  how the vendors adapt to current realtor “needs” -  this year solutions included REOs, foreclosures, short sales, and the shiny new Realtor tool, Social Media.

Technology is not about machinery anymore

Those comfortable  days of putting data in a machine to store, manipulate and access have been supplanted by having to actually go beyond the machine and interact with people who are using the web for 2-way communication.  Adoption of new media requires a bit more commitment than hiring someone to do “that computer stuff”.   It’s not enough that those potential customers can see your listings, and bio, and that  business picture of you that was taken in your high school days, now they want to have a conversation with you.  And that conversation is not necessarily about real estate.

Social media was all the buzz at the convention.  Related sessions were well attended.  But social media is more than sitting in a ballroom for a couple of hours listening to an expert panel telling the audience how they use Facebook, Twitter and LinkedIn to enhance their businesses, and trying to explain the engagement that grows from social media properly used. Success takes a commitment – a commitment to a new  culture.

But I don’t want to commit to that culture of “playing on the computer all day”.   Can I hire an assistant to do it for me?  How do you find time for that?  How can I get my listings on Facebook and Twitter?  How much money can I make? How do I get to be a cool kid?  What is a cool kid?  Can I just buy a magic bullet that will take care of all this stuff and make me a social media star with thousands of friends and followers without spending all that time and energy engaging in the conversation?

Oh, there were magic bullets offered by the convention vendors, for sure, and there are plenty more ammunition dealers who weren’t on the floor.

Tara Hunt (AKA @missrogue)spoke at the convention.  Her presentation was Unlocking Buyer Happiness with Whuffie.   Social capital? Whuffie?  Sounds kind of weird.  It was far from a packed house, with a fairly large number of folks wandering out during the presentation.  If Realtors really wanted to learn what the new media and new culture is all about they should have been listening intently to what Tara had to say, or at least buying reading her book.

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