short sale

How Real is Too Real?

September 4, 2013 by admin

Since first learning about Gary Vaynerchuck, a date, which at this point, has completely escaped my brain, I’ve repeatedly come across stories of individuals who have adamantly stated that transparency is golden. This inspired me to be transparent, and I wrote about how transparent I was actually going to be, and that fizzled out like a fat balloon full of chocolate rippling its way through a factory of wayward sailors smoking cigars stuffed with tuna. In other words, I failed at being transparent, and I continue to do so to a degree.

I’m a 41 year old guy right now. Who’s to say when you’ll actually read this, but that’s the case at the moment. I’m not married yet, I don’t have any children, and I’m in a career that utilizes about the same percentage of my gifts and talents as the human utilizes his brain.

I have ADD, despite what you may believe to be a bunch of crap, and it’s poison to my ability to function on a daily basis. It takes the extroversion that God gave me and makes in introverted. It builds walls. It creates a barrier to success through unexplained and misunderstood behavior. It makes me think in ways that cause me to believe I’m unlike everyone else, and while I see what “appropriate” is, I don’t want to live in the land of “appropriate.” I need an outlet. I need a way to be me. I need a way to be who I am and still put food in my belly and provide for a household.

Or maybe I need to abandon everything that the world tells me that I should achieve and pave my own path with goals that don’t line up with what we (and by “we” I mean “everyone but me”) expect to be the “norm.”

How real is too real? How much truth can we speak about ourselves in our current sphere of influence…the truths that we know about ourselves that nobody else knows, without causing a complete melt-down in our community structure? A pastor I knew once said that “if you knew some of the thoughts that went through your neighbor’s head, you wouldn’t want to be their neighbor anymore.” What about those thoughts? What would happen if we actually expressed them? What if I actually pushed you off of the top of Camelback mountain?

There are people who operate with reckless abandon in this life. They say what they want to say regardless of the consequences. How do these people get along in life? Are they TOO transparent? Are they angry? Are they oblivious to what’s “appropriate?” Some days I just don’t care what others think. I have respect for the fact that they have thoughts and opinions, but they ultimately don’t matter. To me, there is only one thing that matters and that is that God loves me and made me and will support me and love me regardless of my errors and omissions (real estate reference, sorry about that.)

I want so desperately to be 100% real, but in testing the waters with this “transparency” idea, I have received less positive feedback than negative feedback and I struggle to understand why. I’m hesitant to be as real as I really feel like I need to be, for the very reason I feel I need to be hesitant.

“Some things are best left un-said.”

I have a miserable spirit of discernment when it comes to what I should or should not say, but tonight, I feel like I need to say some things, so I’m going to get real, and try some genuine transparency.

Earlier today I was texting with Melanie Mitchell (a relatively common activity done mostly on a device we call “smart”) about how I felt. I don’t have a problem expressing my feelings. So I told her that I was feeling rejected today:

“Not by you. Not by family. Just in general. It’s probably me being hard on myself for not walking the walk I talk sometimes. I’m having difficulty getting motivated to work today. On a lighter note…etc., etc…”

I had no idea the shit was going to hit me in the face before it hit the fan. Today, it seemed as though nothing went the way it was expected to go. The events of the day had me doubting my career, my time at Crossfit, and ultimately, my life. I’ve been through tough times before. I’ve experienced heartache in the past in many ways. I’ve struggled with thoughts of suicide before, and have recovered. No need to call any hotlines, I’m okay and will continue to be. BUT, there are times when I feel like giving up. Quite honestly, a few of the things I enjoy in life the most are the most likely things to be at the bottom of the list of priorities.

I’ve heard about 100 times in the past 5 years, that I sound like the Moviefone guy and that I should be in radio. I was told by Kevin, the owner of Cactus Crossfit who can also will provide special expedia coupons and on one of my first consultations 18 months ago before I was a Crossfit junkie, that I missed my calling as an Olympic weight lifter. I was then told by the daughter of the architect who designed the Optima on Scottsdale Road that I have the perfect body type to be an Olympic lifter.

I sell real estate.

I was in the Phoenix Boys Choir for 4 years, and I traveled the far east and most of the U.S.A. singing goofy little songs that mean a whole hell of a lot more to me than the value of their actual sound (sorry, some of them just suck.) While in high school I used to acquire by questionable means various types of Kodak 35mm slide film for all of the annual church trips we would attend and then I’d put together a musically … dammit. I’m tired of how long it takes to get a point across.

I love making music. I love So You Think You Can Dance. I love stories of people overcoming adversity. I love financial freedom. I love my friends and family. I do a shitty job of letting them know it. I do a mediocre job of letting my clients know that I care about them. I love shooting video. I love editing. I love the creative process. I have no idea how to make a living doing what I love to do. Teaching is primary motivation that I have when it comes to helping people with real estate.

Over the past 4 years, I’ve had the opportunity to help people prevent foreclosure through the sale of their home. The primary focus was always preventing foreclosure. The secondary task was selling the home. The home sale is easy. Keeping a client who is short selling happy is also easy because of the type of tasks that are involved in making that short sale happen. Agents shied away from short sales because they were “difficult.” I find them to be very easy because 99% of the time, the seller has checked out. They don’t care anymore about their house and they have no emotional tie to it anymore. They’ve thrown their hands up and handed the problem over to someone else. Maybe I have a savior complex. Maybe I’m just good at calling “bullshit” to their lenders. Through the short sale process, there was greater emphasis on helping the seller understand what was happening and how they were going to navigate the short sale. It was where I was able to exercise my ability to teach.

I don’t want to be a “teacher” of children. Don’t get me wrong. What I really enjoy is showing people how to get better at something. Showing people that there’s a new way to do something, or if it’s not exactly new, it may be new to them, so it would be great to be able to help them learn it. I am finding that I’m struggling with the “normal” day to day tasks…and…CUT.

Was that good? Do we need another take? CRAP! Seriously? The film ran out 20 minutes ago? Son of a…

Close Of Escrow in the Short Sale World Is A Squeaky Beast

April 23, 2010 by admin

When a normal real estate contract is written, the buyer requests a close of escrow date, which is typically dependent upon multiple conditions being met. There are a lot of people involved, a lot of documents involved, and contractual time lines to follow. Normally, that time frame is somewhere around 30 to 45 days. In the case of FHA financing, it’s on the longer end. In the case of a cash purchase, it can be as quickly as Title can complete their work, or simply a matter of days.

When a buyer writes an offer on a Short Sale, there is no close of escrow date. Instead, the close of escrow date typically reads, “See Short Sale Addendum.” In the Short Sale Addendum, you’ll see on line 38:

Close of Escrow: Close of Escrow shall occur thirty (30) days or _________ days after delivery of Agreement Notice.

The Agreement Notice is the letter that your lender(s) provide upon reaching an agreement to sell for less than you owe on the property. According to lines 22-23 of the Short Sale Addendum:

Agreement Notice: If Seller and Seller’s creditors enter into a short sale agreement, the Seller shall immediately deliver notice to buyer (“Agreement Notice”).

Once the letter(s) reach the buyer, even though there has been initial contract acceptance by the seller at the start of this process, for the purposes of the contract time lines, we consider this the date of contract acceptance. Technically, we have already had an executed contract during the entire negotiation period, with a Short Sale contingency.

In most of the short sales that I have listed, I make sure the buyer and seller understand that we are going to fast track this to closing within 21 days of the Agreement Letter receipt. I do this on line 38 of the Short Sale Addendum because 9 times out of 10, the agreement letter affords us only 30 days to close, and the last thing we want is to run up against the expiration of this letter, coupled with a potential impending Trustee Sale date. And, since we’ve had so much time for the buyer to sit around and basically do nothing, it’s assumed that the financing documents are already in order. This is why it is critical, buyers, to have all of your documents ready to rock at your lender so when the agreement letter arrives, your lender will be able to push forward.

The Squeakiest wheels are typically caused by buyers’ lenders not having everything they need to proceed. While most transactions outside of the short sale world are relatively smooth, even with all of the turbulence the transaction can experience, COE in a Short Sale is more of a balancing act and must be taken very seriously. Lenders don’t like to bend once they’ve made their decision.

Short Sale Follow Through

April 3, 2010 by admin

As a listing agent specializing in short sales, I have run into many situations that raise red flags throughout the short sale process. One of those is finding out that the home owner isn’t prepared for the commitment involved in pursuing the short sale.

When you enter into a short sale listing agreement with your brokerage, represented by your REALTOR, you are hiring them to not only market your property, but also negotiate the short payoff to your lenders. While there is no official difference between a short sale listing, and a regular listing, the fundamental game-plan that we implement when we market your property is quite different than a traditional sale.

Your agreement to sell short is taken very seriously by your agent because of the amount of work that is involved after receiving an offer. It also must be taken very seriously by you, the owner. If at any point in time you doubt whether or not you really intend to walk through the process of a short sale, then you may not be a true candidate for a short sale. You see, even if your circumstances would support a short sale, you need to be completely committed to the process and you need to see it through to the end, whatever result that may be.

The Short Sale Pricing Plan

April 1, 2010 by admin

basic_supply_demand — Supply and Demand Basic Curve

Every short sale needs a pricing plan. Every home on the market needs a pricing plan. In any market, it’s in the best interest of the home owner to sell the home for the highest possible amount. In a distressed market, with a distressed property, sometimes there isn’t enough time to “hope” for a higher price than the home will bring. Knowing that, it becomes critical to the life of the listing to have a scheduled price reduction plan.

Every short sale that I have listed has received an offer, because I implement a pricing plan, depending on the amount of time left before foreclosure, which prices the home slightly above market value, then systematically reduces over time at regular intervals. When the price reaches market value or below, it will most likely draw an offer, and as a result of the planning, enough data has been captured to make a solid case to the lender that no higher offer is possible. This is all driven by supply and demand.

It’s very important to illustrate to the banks (because they have no idea about real estate) the gradual increase in showings over time as the price is slowly reduced on a schedule. When we can show a lender that an over-priced home is receiving no showings, yet when we reduce the price, the number of showings increase, we make a good case for the offering when it comes.

What Do We Do? There’s a Notice On Our Door!

March 11, 2010 by admin

Yikes. That’s probably the first thing you’re thinking. We just received this thing called a “Notice of Trustee’s Sale” and we have no idea what went wrong (“except that we stopped paying our mortgage a few months ago.”)

AHA! That’s the problem. What’s happened is the bank has taken action to recover the home to cover the note. The fact that the note is greater than the value of your home, most likely, is irrelevant at this point. The bank is going to take your house back.

The good news for you is that the bank doesn’t really want the house. They want as much money out of the house as possible, but they don’t want the house because it costs tens of thousands of dollars for them to auction it, take it back, maintain it, re-market it, and sell it.

The real error in the entire situation was the fact that you didn’t recognize that you needed to have this house on the market a long time ago. The banks will tell you that you need to miss payments in order to put your house on the market and have a short sale approved, but this is not true. With a true hardship, whether or not you can pay your mortgage today or not isn’t important. What’s important is whether or not you are headed for the dreaded foreclosure in the near future.

If you are, then you don’t need to miss payments. In fact, if you are able to keep up with the payments, you are more likely to be able to down-size by buying another home after this process. The key is whether or not you are keeping up to date on all of your payments.

So, what do you do now?

You’re headed for foreclosure.

You can re-instate and get caught up, which will cost you more than the amount you’re behind
You can walk away from the house and experience turmoil, have a larger than required deficiency, and potentially face future law-suits and high tax liabilities;
or you can attempt to buffer the losses and have your lender release you from your note by selling the house!

But we owe more than the house is worth! Right, that’s why it’s a short sale. You’re going to bring a market value offer to the lender, and you’re going to get them to approve it and allow the sale.

It happens all day long in this market, and it’s going to keep happening for years to come. Short Selling your home is the best preventative measure you can take now that you KNOW you’re being kicked out.

We’re Due for a Second Wave

February 1, 2010 by admin

Just Last year in Maricopa County, there were roughly 35,000 single family homes that sold. That number almost matches the prior year. Of those homes sold in 2009, 12,975 of them were Short Sales. That’s 37% of the market. That’s HUGE! Most of those can be attributed to the sub-prime mortgage crisis and subsequent market crash.

While there are reports that have surfaced about the market improving, prices on the rise, etc., one of the more important topics that needs to be addressed is the impending wave of 5-year option-arm “smart online loans bad credit” that will be resetting this year. During 2010, I believe that we will see a huge influx of foreclosures in the 400K+ market.

In 2005, buyers were qualifying for homes that were twice as expensive as they could afford because of products that had interest only payments with huge adjustments on the horizon. At the time, people believed that real estate just continued to go up in value, so it seemed to make sense to purchase a $400,000 home based on income that would qualify you for a $200,000 home, in the hopes that within the next 5 years, the home would be worth at least $600,000. That’s not what happened. Now homeowners in the jumbo and luxury market are as stuck as the rest of us, being completely upside-down in their homes. As a result, they are trapped with a ticking time bomb. As soon as those 5/1 ARMs reset, they’ll be headed for foreclosure, and the 2nd wave will begin.

I would encourage you to watch this video created by Jonathan Jarvis which explains why our market experienced what it did, and also makes a great case against borrowing money.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.