I want to echo John regarding your question about advising clients to stop making payments. There is a local case in WA where an agent did this, along with several other questionable tactics and lost his license. If you want to work the Short Sale wave, just remember this, some people ride a wave; other people get pounded by one.
I've been doing short sales since 2002. I donâ€™t specialize or market for them, but will take them as they come to me. The laws, practices and best policies are constantly changing and each lender has their own unique personality. I suggest you get all the training you can find and do a few before you determine to focus on them. They are a specialty and not anyone to do casually. Distressed applies not only to the properties, but the sellers and before it's over the buyers and other agents too.
Check out ShortSaleSuperstars in the link below. Lot's of good information.
We cannot give legal advice to our clients unless we are attorneys. Beware of giving advice to a seller to stop paying the mortgage. Ask your broker, but most will have the hair on the back of the neck stand up at the thought of telling someone they should not pay the mortgage. Always refer those kind of questions to a lawyer.
Watch out for sellers trying to buy and bail, strategic default using the short sale process to get out and buy a better house for less than what they need to sell. Those sellers are not worth the time and effort to get them listed. You have to interview your seller clients and if they are upside down, have money and no hardship, the bank will be unsympathetic to them unless they bring money to the table. At the kitchen table when talking to a seller, find out if they would be prepared to bring 10-50k to closing to avoid foreclosure. If they literally cannot dont have any cash reserves, then the bank might go along with short sale forgiveness. If they have 500k in retirement money and qualify for current mortgage, and are pissssed that they have to bring one dollar to close let another agent deal with that a-hole. A seller has to disqualify for their current mortgage, and have a legit hardship and have little in reserves to get a zero difficency judgement.
If the owner is current with their payments but legitimatly upside-down this will result in a good SS opportunity because you know exactly where the process is. On the other hand if the owner has not paid their mortgage in over a year and their lender has taken steps to foreclose whether or not to go the short sale route can be confusing until you have an accurate appreciation for the lenders current position.
In my opinion, the best scenario is one in which you catch the owner very early in the process. At this time your involvement can create a direction that can positively impact the SS transaction.
Much can be cleared up by the owner creating meaningful lines of communication with their lender. Many times this dialogue can expose other options that are more favorable than the short sale route.
Hope this helps,
Having done over 160 short sales, I can certainly say that it is never a bad time to approach people behind on their mortgage. You will help them out. Never assume they have someone helping them. I have always made it a point to help them in whtever stage they are in. Never be afraid to knock on their door and genuinely offer help. To answer your question, I have found that they are more motivated when they see the NOD or the NOT and more likely to look for help. Just an opinion.
Wish you luck.
Pebble Singha (CDPE)
The later it gets the greater the likelihood of failure. If you are asking generically as a means to gaining some business, the earlier the better. If you have a specific client in mind, I would start by discussing the option with them; explain it may already be too late but that you'll try. Obtain an authorization to speak to their lender and then see where you go from there. If the lender says, "bring us an offer" get busy, list the property and hope for the best. If they shut you down, you may still try but you'd better have an offer right away at a compelling price to get their attention.
Some of this depends on how hard and fast you are willing to work, how determined you are, how experienced you are in negotiating with lenders and of course which lender is involved and if you an reach someone. I hope this helps.
Short sales have proven to often be a lengthy process that comes with its share of frustration.
When approaching someone to do a short sale, you must be vigilant in qualifying your client. My other advice is to collect all qualifying documents to establish hardship prior to listing and jumping on board. Given the nature of the transaction, this will be very helpful for both you and your client.
Good luck and please email me if you want to discuss further.
I would only advise the client to do, what I would do myself... so if I thought not making the payments would be the best for me in the same situation, then I would tell them that is what I would do, if I were them... the same on the other side... if I thought making the payments was better for my particular situation if I was int heir position then I would tell them so...
Best of luck!
I know that finding a niche in this business is key to make money and right now short sales seem like the wave to catch.
It depends on their lender(s). Some lenders will postpone a Trustee Sale and some won't. Different lenders have different time periods too (i.e. they must have an offer XXX days before the Trustee Sale or they won't postpone). If this is not a general question but is property specific, contact the lender(s) involved (get a 3rd party Authorization from the seller first so the lender will discuss the property with you).