Texas real estate

During this challenging real estate market, agents have been forced to make changes in the way they normally do business. Many have had to dip into reserve funds for extra advertising, promotions or giveaways, while others have agreed to the unthinkable – offering a reduction in their commission.

After this economic mayhem is over and the dust finally settles, those agents still left standing will be the one’s who have remained flexible, and were willing to think outside of the box to drive new business. One such realtor is Karen Bigos of Towne Realty in New York. She took one of the most common obstacles home buyers and sellers are facing, and turned it into a positive.

One of contributors in this sluggish market, is lack of buyer confidence. In the old days, it was commonplace to place a conditional offer on a home if a buyer was trying to sell their own place, knowing that the house would sell within a reasonable length of time.. Today, pessimistic buyers don’t even want to bother trying to purchase a home if they don’t have their own deal signed and delivered. Understandably so, it can take months for a home to sell, if they purchase a place in the meantime, they could get stuck carrying two homes. Depending on the house and the higher the price, the longer it can take to find a buyer.

Here is where the creative marketing comes into play. Ms. Bigos had two clients: a couple with a Greenwich Village condo and a family with a home in Short Hills. Both homes were in the $2 million range and were the type of residence the other was looking for. A match made in heaven! Bigos arranged viewings for both properties, the buyers were happy with what they saw, and a deal was arranged.

Recently, another Short Hills home owner looking to down size from her six-bedroom Victorian home, had heard about Ms. Bigos matchmaking skills and requested she add the option of swapping homes to her ad description.

The idea is definitely catching on all throughout the nation. Many large agencies are considering creating formal home swapping campaigns as part of their promotion. On the internet, look for sites such as OnLineHouseTrading.com or Pad4Pad.com offering online home matchmaking services. Just outside of Orlando one family had to sell their home and relocate to Atlanta due to a job change. After being listed for months, with no luck, they joined one such site and was matched with a couple who had similar needs. A few months later, they signed the contracts and switched houses.

Similar to a dating service, prospective buyers and sellers sign up, providing information about the type of home, such as price range, number of bedrooms, lot size, preferred city or neighborhood. The members browse the information looking for a suitable match.

Working out the final sales details can be a bit of a challenge since you aren’t always dealing with two homes priced exactly alike. Overall, it gives sellers who may have been forced to sell below market value, another option for selling their home. Sometimes deals are made using a combination of different types of property. Once customer who had a large Tudor home worth almost $3 million was looking to downsize. He considered a match with with someone who had a smaller home plus a vacation home and maybe a car thrown in.

The bottom line is, there are plenty of homes out there wanting to be sold, and plenty of buyers wanting to pay for them, they just need a little help finding each other.

By: Karrie Rose

Short sales are a tough thing to master. Having negotiated short sales in Central Texas for almost 4 years, our company, Superior Loss Mitigation, has seen it all, lenders not agreeing to deals and causing foreclosure over $1,000, or less, homeowners that want a short sale, but neglect to get their paperwork together, buyers that team up with a Realtor to search for one to buy, only to say they don’t want to wait for the deal to negotiated, phone hold-times of over an hour, lender representatives telling us they “don’t do short sales”, and small local companies that hold a lien for a couple of thousand bucks refusing to release their position out of spite, etc., etc. You name it, we’ve either heard it or seen it.

During the course of hundreds of short sale transactions, meetings with homeowners, and thousands of phone calls with Realtors, banks, and potential buyers, one of the most common questions we get asked is, “How long do short sales take?’ Unfortunately, there is no one-size-fits-all answer.

In a general sense, on average, they take about 3-5 months to complete from start to finish. But, more time may be needed depending on the complexity of the deal. Here are just a few.

1) Multiple mortgages. If there is more than one mortgage (lien) on the property, BOTH lienholders will have to agree on the terms of the transaction. Well, you would think that wouldn’t be a big deal since both lenders stand to lose more money if the property goes through foreclosure (especially the 2nd, since they end up with the big goose egg, $0). However, most of the time the 1st mortgage bank is the one foreclosing on the property, so they get to “dictate” what the other lienholders get at closing…a “like it, or lump it” scenario. Their stance is, “Hey, we’re the ones foreclosing. And if we do that, the 2nd gets nothing. If we agree to this deal, we’re going to decide our TAKE and their GET.” So, common sense would suggest that if the 1st allows even 5 or 10% of what the 2nd lienholder lent as payoff at closing, that the 2nd would be OK with that since their alternative is to get $0 upon foreclosure. This used to be the case. Not so any more. The 2nd lienholders have lost so much money on a national level to foreclosures, that they are now pushing back for more than the 1st mortgage’s “allotment”. And many times they DO get more, whether the buyer brings additional funds to closing for them, or the homeowner sends in a lump-sum payment to the 2nd prior to closing. On the flip-side, we’ve negotiated short sales where the 2nd couldn’t be satisfied. This is where the common sense breaks down, because instead of taking the $2k, $4k, or $5k, they are willing to accept $0. Working all of this out, can add an additional month to the process.

2) IRS Liens. It goes without saying that every one of our clients is experiencing some sort of financial hardship. Most often, job loss is the driver, and if the unemployment continues for a long period, many cannot pay their income taxes resulting in liens being attached to the property. Although a definite roadblock, I’ve had mortgage company negotiators tell me that IRS liens are a “deal killer” and useless to address. Not so. What is often misunderstood is that the IRS liens are liens against the PERSON for unpaid income taxes, not against the actual property. It the case can be made to the IRS that they will receive no benefit from their lien being attached to a property facing foreclosure, they will most often remove it. Is it easy to do? Not always, but that’s why utilizing a company that specializes in short sales to navigate these difficulties can mean the difference between closing and foreclosure. Truth is, most Realtors and investors that claim to be able to negotiate short sales cannot successfully remove IRS liens. Plan on adding about 2-4 weeks to the process when faced with IRS liens.

There are many other factors in a short sale that can create additional delays in the timeline like judgments, tax suits, mechanics liens, water softener liens, mechanics liens, etc. Additionally, the buyers can cause delays as well if their financing is not completely approved PRIOR to looking for the property they want to buy. (Here’s a quick tip…if you get an offer on a short sale you are negotiating, require that the buyer have everything done in regards to their financing EXCEPT FOR their interest rate lock, their appraisal, and their inspection. Upon receipt of the short sale approval, pull the trigger on those things to help ensure that you close on time.)

Check our our video series where we address all of the most commonly asked questions we get in our office regarding short sales. We hope that clearing up the misconceptions, misunderstandings, and providing education about short sales will help get more of them closed and more foreclosure avoided. See our link below.

By: Aaron M. Ayotte