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One of the toughest things as a loan officer to do is to know when to keep or kill a deal. Of course, we all want as much business as we can handle. But, spending time on loans that don’t close, wastes more time and leaves you with nothing to show for it. Not to mention, the good deals suffer and you’re out your commission!

Knowing when to “give-up” on a loan is just as important as knowing how to get the loan to the closing table. Here are some suggestions on how to manage your customers and get more loans closed:

Keep control of the customer from day one. Set down your expectations for the loan process and what you expect from the customer. Tell them that this is a “team effort”, and you are working as diligently as possible to get them the best rate and terms available for their situation. But, in order to do this, you need their cooperation and commitment to move forward. Tell them what you need, and ask them on what day you can expect to receive things by. I like to pin people down to a specific day. They hold me accountable, and I, in-turn, am holding them accountable as well. Build rapport early on. Get a sense of the customer’s personality and what matters to them. Understand completely what their reasons are for doing the loan, and use these “motivating factors” to help steer them through the process. Every time I speak with a customer, I again tell them why they are doing this and hit them with their “benefits” (cash-out, debt consolidation, monthly savings, lower rate, etc.). It is the customer’s point of view that is most important. (By the way, my system will help you to uncover the customer’s true motivation and build rapport—I include very specific questions to ask!). Explain every detail of the loan process. Sometimes, being in the industry, we forget that not everyone understands how mortgages work. It can be a long road to the closing table, and you want to make sure the customer understands exactly what is going to happen and when. You don’t want them to think that they can just cancel third-party appointments such as appraisers or surveyors without consequence! Always assume the loan is moving forward. Customers like to make excuses and waffle on certain things like getting their documents to you. What I do, is always assume we are pressing ahead and on track. I am the driver of this bus and let the customer know it. For example, “Mr. Jones, I was just getting your file ready for underwriting, however, there are just a few more pieces of information we need. Do you have a pen and paper ready? How soon do you think we can get these by? O.K., I will expect to see your documents on (date). Let me give you my fax number, etc.”. Everyday, you want to push the file ahead as far as you can. Push! Push! Push! Listen for signs of waffling or hesitation. Here are some things to be aware of, (which may mean the customer is still shopping you or is not completely “sold”): customer holds-back on getting income/asset documents to you, customer keeps putting off appraisal appointment, there are recent inquiries on their credit report from other mortgage companies, you have received negative feedback from the lawyer or any other third party, customer doesn’t return calls. These are signs of a customer that isn’t fully on-board.

If you’ve done all these things and are still having difficulty with the customer, then it’s probably a good idea to kill the deal. There are many roadblocks you can overcome, but when the customer isn’t fully committed, you shouldn’t be either. You can’t drag someone to the closing table that doesn’t want to be there. Get rid of the bad loan and focus on loans you can close successfully!

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The Sink or Swim Loan Closing System is a set of mortgage loan pricing and processing worksheets I developed over many years in the mortgage industry. These sheets cover both types of loans: purchases and refinances; and will work for conforming home equity lines of credit (HELOC) and commercial properties.

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What Offer Should You Make to the Lender In a Short Sale Deal?

Posted by Usual in Lender Approved Short Sales, tags: deal, Lender, Offer, Sale, Short, Should

What Offer Should You Make to the Lender In a Short Sale Deal?

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Home Page > Business > Business Ideas > What Offer Should You Make to the Lender In a Short Sale Deal?

What Offer Should You Make to the Lender In a Short Sale Deal?

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Posted: Dec 02, 2010 |Comments: 0
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A short sale deal happens when a home owner is on the brink of entering foreclosure. In order to avoid the hassles of dealing with a foreclosure, the lender agrees to sell the property to a third party, even if the selling price is lower or shorter than the market value of the property, hence the name short sale.

As a real estate investor poised to make a good profit from a short sale deal, you need to understand the relative complex procedures involved in these transactions and also what levers you need to push in order to convince the lender to sell you the property in a short sale.

One of the most important aspects of a short sale is figuring out what is the correct amount of money that you should offer to the lender for the distressed property. Too little and the lender will turn you down; too much and you will sacrifice your profit and maybe even end up with no profit at all.

The answer to this question depends on a few issues. Let’s expand a little on these factors:

The initial offer – as a rule of thumb, your first offer should be as low as reasonably possible. Never begin your negotiation with more than you think the creditor could accept. If you make a first offer for a short sale and the lender immediately accepts you can start looking for mistakes in your plan.

What is your exit strategy?

Before making an offer, deliberate a little on your exit strategy, or what do you plan to do with the property if everything goes as planned. If you plan to sell the property to a rehabber, you should know that rehabbers generally don’t spend on a purchase more than 65% of the retail value of the property. So, if a house is worth $100,000 and needs rehabbing, you can expect to receive offers of no more than $65,000. If the house is well kept and doesn’t need any renovation, you can sell it directly to a landlord and receive a maximum of 80% of the value of the property, in our case, $80,000.

What is the value of the pending mortgage?

The amount of money the lender needs to recuperate from the homeowner is the second factor which you should ponder when pricing your bid. If the total withstanding value of the mortgage is smaller your offer can also be less substantial

Don’t forget to add all your expenses in a spreadsheet, like the fees and commissions that you need to pay for the various transactions, since these smallish expenditures can add up in a substantial amount of money.

Also, devise a realistic roadmap and do everything in your power to stick to the milestones.

Expect the unexpected, nevertheless. Short sales are notorious for the long delays which can appear, caused by the complex and sluggish process of approval by the various lenders involved.

With these advices in mind, remember that there is no fails-safe template for a successful short sale and you need to adapt your actions to every particular situation.

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I was denied a Hamp mod due to NPV caculations. My lender will not explain these terms to me. They said they cannot help me. I need to short sale and get out. Can u please help me
What are tax implications of short sale ?
What are the repercussions of a short sale ?

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Are condos good buys in this economy? 50% 0ff as short sale approved.. is this a good deal? I need some help?

Posted by Usual in Bank approved short sales, tags: approved, Buys, condos, deal, economy, Good, Help, Need, Sale, Short, Some, this

question # 1
if i purchase a condo via short sale ” already aproved by bank”, and the price is $100,000 and the assesed price is 200,000 does this means that the equity in the property is $100,000?

2. how long would i have to weit in order to be bable to take out equity.
is there a waiting period?

could you explain how equity works in this case?

5 Comments »

Oct 21 2010

Do you think it’s a reasonable deal to buy this REO bank-owned house and do the repairs?

Posted by Usual in Bank Owned REO, tags: BankOwned, deal, House, it's, reasonable, repairs, think, this

1. This REO bank owned house, listing $350K and the bank would propably go for $300K after the negotiation. There maybe a way to push the price to as low as $280K.

2.There are a lot of interiors to be repaired or upgraded. The observed areas to be worked are: Kitchen, Bathroom, Air condition, Floor, Fences, Windows/doors, and paint. The total estimated costs of all would go somewhere from $35K to $50K. However, there might be some hidden costs after inspection (not certain). There is a chance that final repair costs could be more.

3. This house has been listed in the market since Sep’07 (4 months by now).

4. The prices of Comps in the area range from $320K to $450K.

5. It’s a Single Family Resident house.
I’m planing to live in it, not flipping or renting it out.

5 Comments »

Sep 26 2010

Buy a Short Sale for a Great Deal

Posted by Usual in Short Sales, tags: deal, great, Sale, Short

If you have been looking at the real estate market, I’m sure you have noticed that many of the homes up for sale are advertised as short sale. Buying a home for under the amount that is owed on the real estate is called a “short sale.” In the current real estate market, there are many short sale options open to a potential home owner. Adjustable rate mortgages and the economic downturn have caused higher than normal foreclosure rates. If you are in the market to purchase a home, this is the ideal time to exploit the market to your own advantage. With some precise research and an open mind, you may find the home of your dreams at an unheard-of price.

Locating a Short Sale Quickly

To initiate the short sale process, meet various real estate agents. Many real estate agents already are knowledgeable in dealing with properties that are short sales. Selling agents often have pre-existing association with the lender that is holding the mortgage. You want to use a realtor that has experience and information on how to get a property that is a good value. Once you settle on a realtor, let him or her know right away that you are looking for a short sale property. This will help the realtor find an ideal property more quickly.

Short Sales are Often Bargains

A short sale will often be offered at a good price to the buyer since the bank does not want to have their assets tied up in the property. A bank is vulnerable to losing a substantial amount of money in a foreclosure proceeding. The listing price is minimal and so you will not have to try bargaining with a seller over the price. The bank wants the property sold as quickly as possible to eliminate losing any more money.

What to Anticipate When Buying a Short Sale Property

The process of buying real estate in a short sale is a little different than purchasing a home from an individual because you dealing with an corporation instead of a person. Once the bank accepts your offer, the title company working with the bank will handle all of the title and escrow details of the purchase agreement. With a short sale, as a buyer you have to proceed swiftly. The title company and the bank may not act as quickly owing to the large amount of paperwork involved in selling a property in this manner.

To speed up the process of purchasing a home in a short sale, get all of the required documentation in as quickly as you can. Generally there is a month or more before your closing date but that does not mean that nothing is going on. There is a complicated behind the scenes process involved in the mortgage documents and the transfer of the property. Keep in touch with your lender and realize that you are dealing with a corporation and not a person so the process will be a little different. The time before closing will slide by, and you will be in a great new home.

Take a look at Green Valley homes for sale. Consider Gladden Farms homes for sale. You can browse Dove Mountain homes for sale. Let Paula Shindelar help you with Tucson area real estate.

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Aug 20 2010

Bank renegs on short sale deal?

Posted by Usual in Bank approved short sales, tags: BANK, deal, renegs, Sale, Short

This takes place in Virginia. The buyer agrees to a price with the seller in cooperation with the lender. The buyer signs the agreement. The seller submits the paperwork to the lender (a very large well-known bank) and receives a letter approving the short sale. The seller signs the agreement. Next day the bank says another $30,000 or the deal is off. Any advice?
In the letter the lender wrote to the seller, the lender agreed in writing to release the lien. I think that’s all I need the bank to do and they agreed to do it.

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Jun 19 2010

Short Sale-a Means to a Good Deal for Buyers and Sellers

Posted by Usual in Lender Approved Short Sales, tags: Buyers, deal, Good, Means, Salea, Sellers, Short

If you can no longer meet the expense of the mortgage payments on your property, a short sale may aid you in avoiding a declaration of bankruptcy or keep your lender from foreclosing on your home. A short sale takes place when your home loan’s lender releases your property’s lien and agrees to accept less money than you owe on the mortgage as a payoff. For instance, if you owe $200,000 on your home, and it sells for $190,000, the lender may consent to $190,000 as payment in full. Keep in mind, though, that some lenders will not agree to a short sale, especially if foreclosure is the better option for them.

What You Should Know About Short-Selling Your Home

Most lenders have particular requirements concerning precisely what documentation they require from those looking for a short sale, though the majority will require a letter of authorization, wherein you give them authority to disclose your personal information. Consider writing your lender a memo granting your permission to consult with others about your loan. Include your full name, the date, the property address, your mortgage number, and the name and number of the real estate agent who is helping you.

Your closing agent or lawyer should additionally prepare for you a initial net sheet. This contains the estimated closing statement with the sale price for your home that you assume you will receive, all the normal costs of sale, the unpaid loan balance, your late payments and fees, and any commissions your real estate agent will accept. You will need to convey this to your lender as well. Send with it a hardship letter that describes exactly how you fell behind in your payments, an honest report of your income and assets, accounting for any savings accounts, stocks, other properties, or articles of real value. Include copies of your bank statements, a comparative market analysis, if required, and a copy of your listing and purchase agreements when your home is put up for sale, and later when you receive an offer. Once your lender has all of your documentation, they will determine whether or not to sanction your short sale.

Understand Risks of Purchasing a Short Sale Property

While the enticement of getting a super deal on a short sale is quite strong, make sure to make inquires on the property before making an offer. To start with, a lender is under no obligation to accept your offer on a short sale listing, even when the seller accepts it, even though the property is listed with short-sale terms. Remember that a lender may have given permission for the short sale to the seller because the seller currently owes more money than the home’s value. This would not make the asking price lower than market value, but instead bring the price of the home in line with other properties in the market. Do some public-records research in order to discover whether the home is being foreclosed, and learn how much the seller owes the lender. This will help figure out how much to offer. When a seller consents to your offer, send a copy of it to the lender for approval and make your offer conditioned upon the lender’s approval. Also, make certain you have the property inspected making your offer contingent upon an acceptable inspection.

Take a look at Santa Ana, CA real estate for short sale properties. Consider South Gate homes for sale for short sale listings. Browse Sun City houses for sale for short sale homes.

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May 17 2010

dead deal? this is a bank approved short sale?

Posted by Usual in Bank approved short sales, tags: approved, BANK, dead, deal, Sale, Short, this

So here’s our short sale story. We placed on offer on a short sale the beginning of this month, and a week later we were countered on the sales price…which we accepted. Escrow was opened the next day. Our appraisal came in $2000 below our purchase price, that went back to the bank and they agreed to lower it by $2000. Now we are all cleared for loan docs and we were told yesterday there is a $21,000 property tax lien on the property! Obviously we are not paying for it…..now it has to go back to the bank to get renegotiated to see if they will pay for the tax lien. Our agent was told by the other agent she doubts the bank will pay for the lien…..the other agent is thinking the bank will re-list it at a higher price.

My questions are:
1. our appraisal came in at $308,000…can they sell it for more?

2. Will anyone buy it at a higher price or does the bank want the home to go into foreclosure then sell it that way?

3. Do you think there’s a possibility of the bank sucking it up and pay the lien?

we have loan docs and we truly love the house and the area it is in. I’m tired of looking at houses, we were having no luck with bank owned properties (always getting out bid or no counter since we are doing FHA) and now it seems we can’t even buy a short sale.
we are in southern california and it’s not an attorney state. we have a RE agent and escrow handling the deal. our agent has been hounding them for an answer and she told us our next step would be to contact a RE attorney since that contingency was not in the contract.

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