WA – We recently talked to another agent about her short sale listing. (Some of the details have been changed to hide their identity) She had been working on this short sale for 6-8 months with no success. The original buyer offered 265k for the house.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

The short sale lenders rejected the offer. The house ended up selling eight months later for 220k. Why did the short sale lenders reject the 265k offer, only to later on accept an offer for 45k less?

Because the person negotiating with the short sale lenders didn’t know what they were doing. Here’s what happened.

The first mortgage was owed $289,000. The 2nd was Bank of America, owed 60k. She submitted the 265k short sale offer to both mortgages holders. The first mortgage gives her an approval in a month. Bank of America never gave her an answer.

Here is the problem. Bank of America has no incentive to put time into this short sale file. Why? Because they are only getting $1,000. In a short sale, most 2nds will get a minimum of $3,000, and often 10% of whatever they are owed.

The first mortgage was greedy and wouldn’t offer enough money to Bank of America. As a result, they lost $40,000. Was that a smart business decision?

No. That’s a big loss for the short sale lender. To be honest, I would be embarrassed if I was that banker.

Here is what this agent should have done. She should have convinced the first mortgage to give Bank of America $3,000 to $7,000. Bank of America would have accepted the offer with more money.

Instead, the agent had to negotiate the short sale all over again. Not only that, but her sellers risk a bigger deficiency note. This first mortgage was one of the few mortgage companies not willing to release the deficiency.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at info@nostringsmarketing.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 1-800-LISTING.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this,

Jonathan Phillips

Jonathan is a Managing Real Estate Broker at Phillips Realty LLC.

Phone: 1-800-LISTING. Click HERE to email.

View My homes for sale at JonathanPhillips.com.

Jonathan Phillips specializes in loan modification assistance and short sales in Pierce County Washington. Pierce County Loan Modification Help, Pierce County Short Sales, Pierce County Short Sale Realtor. Short Sale Realtor. WA Short Sales. Realtor.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Phillips’s personal views and do not reflect the views of Phillips Realty LLC. This information on Short Sales: Walk Away or Stay? is provided as a courtesy to our viewers to help them make informed decisions.

WA – Some homeowners have watched the value of their home be cut by 30-50%. They paid 700k for a house that is now worth 400k. They want a principle reduction, but the lender won’t agree to it.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

So they keep on insisting for one. Lenders will drop your interest rate to 2% for five years. But, they are very reluctant to grant principle reductions. Here is why.

They are forced to take huge write off on their books when they give you a principle reduction. No, this is not a “tax” write off.

If they give you a 300k principle reduction, they have to take that directly off that year’s earnings. That hurts earnings, which hurts the stock price, which hurts the likelihood of the people at the top getting bonuses.

This makes principle reductions so rare. Instead, they like to reduce your payment down to the equivalent of a 400k principle amount. How?

By dropping the interest rate to 2%. The lower interest reduces your payment down as much as a principle reductions would have done.

The banks hope that you can limp along for five years until the economy recovers. Hopefully by then housing prices will recover, or you will be able to afford the higher payment after the interest rate reset.

But, many experts do not think the housing market will recover in 5 years, much less 10 years. This is why I recommend a short sale and renting to anyone who is upside down by 30%.

Now, you may be saying, “Of course you do recommend that. You get more sales that way.” Sure, I like more sales.

But, if that was true, then why would I give away free loan modifications kits to homeowners in foreclosure? I would hope that they would be forced to short sale with me.

(Click here to request a copy of our Loan Modification Kit that has the instructions you will need to get a loan modification approved with your bank.)

I believe that most loan modification are a temporary band-aid that doesn’t solve the underlying problem. Most people that short sale are already suffering and their credit has been hurt by a pending foreclosure.

What if they accept the loan mod offer and can’t afford the payment reset in 5 years? They may have to stop paying, hurt their credit again, and apply for another loan modification.

Why not wipe out the upside down debt while your credit is already damaged? Agree? Disagree? Please put your comments in the comments section below.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at PhillipsRealty. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 1-800-LISTING.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Pierce County WA – Short Sales can be frustrating. Ask anyone who has negotiated a short sale with a lender and they will tell you the process is tough. Here is a story that illustrates this point.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

You are negotiating a short sale with a lender. You call in and talk to a someone in a call center overseas. They are very helpful and give you the fax number for the short sale paperwork.

You fax the short sale package. A few day later you call in to follow up. (Most lenders systems take a few days to process the paperwork.)

They tell you that they have no record of having received your paperwork. “That’s pathetic”, you tell them. “I sent it to this fax number. Can you confirm that is the right one?”

“No, that is not the correct fax number”, they tell you. “Here is the correct fax number.” This is why simple follow up is so important if you want a chance at a successful short sale.

Small mistakes like this happen all the time. Let’s say an agent is not familiar with the process. Do you think they will become frustrated after experiencing all the mistakes compounded together?

I think so. To have the best chance at success your agent needs to follow up on the short sale twice a week. Most agents don’t do this. As a result, they aren’t successful at short sales.

That’s why you hear them say the following. “I hate short sales. They are so frustrating. They take forever. Most of mine have dragged out for 9-12 months. The short sale lenders are so tough to work with.”

Why can’t these agents follow up on their short sale file twice a week? Because they don’t specialize in short sales. Your short sale is just one of eight other things they are working on.

A buyer comes to town for a week to buy a home. The agent is busy driving them all over town that week. They don’t have time to follow up on your file.

They are burned out next week and take a few days off. They get back to work on Wednesday. Wednesday thru Friday are consumed with catching up on everything else.

They have to call back three other sellers, show homes to another buyer, and follow up on their closings. They don’t follow up on your file until the next week.

What chance does your short sale have? Everyone knows focus is the key to success. I have chosen to focus on short sales. Because of this, my short sale sellers know that I will handle their file properly.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at jcphillips@gmail.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 1-800-LISTING.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Pierce County Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this,

Jonathan Phillips

Jonathan is a Managing Real Estate Broker at Phillips Realty LLC.

Phone: 1-800-LISTING. Click HERE to email.

View My homes for sale at JonathanPhillips.com.

Jonathan Phillips specializes in loan modification assistance and short sales in Pierce County Washington. Pierce County Loan Modification Help, Pierce County Short Sales, Pierce County Short Sale Realtor. Short Sale Realtor. WA Short Sales. Realtor.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Phillips’s personal views and do not reflect the views of Phillips Realty LLC. This information on Short Sales: Walk Away or Stay? is provided as a courtesy to our viewers to help them make informed decisions.

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