v 3 4 2009 Keller Williams Realty

v 3. 4 © 2009 Keller Williams Realty, Inc.

Chapter 1 Listing Short Sales What You Will Learn • SHIFT Tactic 11: Distressed Properties—KWU’s three-part series on listing and selling distressed property • Replaces An Agent’s Guide to Short Sales, Foreclosures, and REO • The Guides: – Listing Short Sales – Listing REOs – Working with Buyers SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 2

Chapter 1 Listing Short Sales What You Will Learn • SHIFT Tactic 11: Distressed Properties – Series objectives • • Skills you will need Mindset challenges, and how to approach them Resource demands Self evaluation and action steps to move forward SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 3

Chapter 1 Listing Short Sales What You Will Learn • Listing Short Sales course objectives – – – – See the opportunity Grasp the market background and distressed property timeline Know what changes to expect Understand sellers mindset and motivation Know lenders and asset managers mindset and motivation Know the short sale process Know how to work effectively with buyer agents Know how to improve offer acceptance and close rates – Recognize sources of short sale business – Make a sound choice of business direction SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 4

Chapter 1 Listing Short Sales What You Will Learn • What We’ll Cover – – – – – Ch. 1: What You Will Learn Ch. 2: Distressed Property Timeline Ch. 3: What Is a Short Sale? Ch. 4: Criteria for a Short Sale Ch. 5: Mindsets: Sellers, Buyers, Lenders, and Agents Ch. 6: The Short Sale Process Ch. 7: Lead Generation Ch. 8: Evaluate Listing Short Sales and You Short Sale Tool Kit SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 5

Chapter 1 Listing Short Sales What You Will Learn • Graduate Study: Where to Look Next – MAPS Coaching • Short Sale Coaching – Keller Williams Approved Vendors (see My. KW. com) • KW agent to agent programs • Third-party vendor programs – KW Distressed Property Community – This Month in Real Estate on KWConnect SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 6

Chapter 1 Listing Short Sales What You Will Learn • • “Watch Out” Alerts Tips for You Course References Short Sale Tool Kit SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 7

Chapter 2 Listing Short Sales Distressed Property Timeline • The Distressed Property Timeline— Know It, and Consult Expertly – Personal shifts happen – Market/property shift events occur – Buyer interest happens SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 8

Chapter 2 Listing Short Sales Distressed Property Timeline • Personal Shift: Four Primary Causes 1. 2. 3. 4. Negative equity from market value shift Unemployment triggers delinquencies Other personal crises Consumer confidence can help or hurt SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 9

Chapter 2 Listing Short Sales Distressed Property Timeline • Personal Shift: Four Primary Causes 1. Negative Equity • Chart example – going “underwater” or “upside down” SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 10

Chapter 2 Listing Short Sales Distressed Property Timeline • Personal Shift: Four Primary Causes 2. Role of Unemployment • • Timing of unemployment surge exaggerated the distressed property situation Federal Reserve: mortgage delinquency tied to unemployment—along with debt and home prices SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 11

Chapter 2 Listing Short Sales Distressed Property Timeline • Length of unemployment is growing SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 12

Chapter 2 Listing Short Sales Distressed Property Timeline • Personal Shift: Four Primary Causes 3. Personal Crises • • • Unforeseen large medical expenses Unplanned job transfers Death in the family Divorce Job loss SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 13

Chapter 2 Listing Short Sales Distressed Property Timeline • Personal Shift: Four Primary Causes 4. Consumer Overconfidence • • Naïve confidence can help Overconfidence can hurt SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 14

Chapter 2 Listing Short Sales Distressed Property Timeline • Chart Shows Key Features of Distressed Property Process – Pre-foreclosure, and postforeclosure – Know your local state laws and regulations! • The Distressed Property Timeline Chart with Definitions SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 15

Chapter 2 Listing Short Sales Distressed Property Timeline SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 16

Chapter 2 Listing Short Sales Distressed Property Timeline • Personal Shift – PS-1: Missed Mortgage Payment(s) – PS-2: Notice of Default – PS-3: Deed in Lieu or Loan Modification – PS-4: Intent to Foreclose – PS-5: Foreclosure – PS-6: Eviction – PS-7: Redemption or Reinstatement SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 17

Chapter 2 Listing Short Sales Distressed Property Timeline • Market/Property Shift Events – – – – – MS-1: Conventional Loan MS-2: FHA or VA Loan MS-3: Short Sale MS-4: Trustee or Sheriff’s Sale MS-5: Prelist Auction MS-6: Assignment to Asset Manager MS-7: REO Listing with Agent MS-8: REO Purchase MS-9: Bank Fails; FDIC Takes Possession SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 18

Chapter 2 Listing Short Sales Distressed Property Timeline • Buyer Interest – BI-1: Pre-foreclosure Sales – BI-2: Short Sales – BI-3: Trustee or Sheriff’s Sale – BI-4: Prelist Auction – BI-5: REO Listed with an Agent – BI-6: FDIC Sales SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 19

Chapter 2 Listing Short Sales Distressed Property Timeline • Exercise: Can you consult about the Distressed Property Timeline? – Step or point selected – Why focus on this step – Your headline message for the client SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 20

Chapter 3 Listing Short Sales What Is a Short Sale? • An Option Before Foreclosure – A proactive step – A settlement Truth A short sale is a contract between the buyer and seller with at least one contingency—that the deal is approved by the seller’s lender as a settlement for less than the full amount owed. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 21

Chapter 3 Listing Short Sales What Is a Short Sale? Truth When customers ask “why a short sale? ” the shortest answer is that a short sale is a written negotiated settlement with agreed terms. A foreclosure is a taking of their property with no terms and no written settlement. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 22

Chapter 3 Listing Short Sales What Is a Short Sale? • What Short Sales Accomplish – Consumer protection – Lender liability (REO) avoidance – Lender cost reduction – Business building opportunity for agents SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 23

Chapter 3 Listing Short Sales What Is a Short Sale? Truth 78% of KW agents surveyed in mid 2009 say they’re seeing more short sales in their market. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 24

Chapter 3 Listing Short Sales What Is a Short Sale? • Specific Benefits for Sellers – Ten reasons to avoid foreclosure 1. 2. 3. 4. 5. Foreclosure follows you Credit score negative impact Ineligibility for government insured loan Possibility of deficiency judgments Negative in employment credit checks SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 25

Chapter 3 Listing Short Sales What Is a Short Sale? – Ten reasons to avoid foreclosure, cont. 6. Potentially damaging in current employment 7. Negative on security clearances 8. Lower tax liability than foreclosure 9. You have alternatives 10. You must do everything you can SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 26

Chapter 3 Listing Short Sales What Is a Short Sale? • Win-Win Solution for Everyone – Relief for homeowners – Bargain for buyers – Lender’s liability reduced – Agent client for life potential is high SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 27

Chapter 3 Listing Short Sales What Is a Short Sale? • Short Sales Are Just Plain Different (see table in guide) – Pricing on BPO and appraisal – Special terms and addenda (as is, etc. ) – Multiple offers discouraged – Lender acceptance – Long wait, then quick close common SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 28

Chapter 3 Listing Short Sales What Is a Short Sale? • Your Options for Short Sale Business 1. End-to-end short sale agent – Handle all aspects from lead generation to negotiation and closing 2. Negotiator/processor – Negotiate other agents’ transactions for fee 3. Referral only – Lead generate and qualify, then refer to specialist agent SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 29

Chapter 3 Listing Short Sales What Is a Short Sale? • Choosing a Negotiation/Servicing Vendor (criteria) – Fee structure and total cost – Their close rate – Referrals from agents you trust – Specific deals they’ve closed • One Option: Start Your Own Negotiation Business SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 30

Chapter 4 Listing Short Sales Criteria for a Short Sale • Lender’s Criteria: – Necessary (hardship; unaffordable; upside down) – Possible (necessary return can be generated in sale) Truth A short sale’s selling price is all about the lender’s bottom line and meeting their net proceeds requirements for that property—a percentage of the current market value. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 31

Chapter 4 Listing Short Sales Criteria for a Short Sale • Homeowner Criteria – The homeowner’s personal involvement – Documented hardship – Loan in default (not always necessary) – Upside down on loan to value – Property unaffordable (negative cash flow) SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 32

Chapter 4 Listing Short Sales Criteria for a Short Sale Truth The homeowner must be willing to cooperate with the agent, lender and buyer. The homeowner will have to turn over private documents and be willing to wait for answers from the lender, while making nothing in the sale. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 33

Chapter 4 Listing Short Sales Criteria for a Short Sale • No Short Sale? Pre-foreclosure Alternatives – No, for personal reasons – No, for legal reasons – No, because of extreme negative equity SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 34

Chapter 4 Listing Short Sales Criteria for a Short Sale – No, for personal reasons • Discouraged, humiliated • May not understand/not accept benefits • May not know their options – No, for legal reasons • Bankruptcy • PMI issue • Foreclosure date imminent SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 35

Chapter 4 Listing Short Sales Criteria for a Short Sale Truth If the lender will not postpone the foreclosure, you may not have enough time to complete a short sale. But, if persuaded by you that a short sale will work, the lender can usually postpone the foreclosure immediately. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 36

Chapter 4 Listing Short Sales Criteria for a Short Sale – No, because of extreme negative equity— homeowners may walk away • It may be a deliberate economic calculation (see “Homeowner Math” table in your guide) • With severe value declines, the time to recover may feel not worth it—better off foreclosing and waiting 5 -7 years to buy again SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 37

Chapter 4 Listing Short Sales Criteria for a Short Sale • Summary of Positive and Negative Alternatives – Positive • • Forbearance Right of Redemption Reinstatement Mortgage modification (see “Hope for Homeowners” in guide) SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 38

Chapter 4 Listing Short Sales Criteria for a Short Sale • Summary of Positive and Negative Alternatives, cont. – Negative • • Deed in Lieu of Foreclosure Deficiency judgment The price of indecision, waffling Potential tax issues—forgiven debt and 1099 s SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 39

Chapter 4 Listing Short Sales Criteria for a Short Sale • Your Role in Homeowner Choices: Adviser and Fiduciary – – – Be sure they know their options Act in their best interest Help protect against fraud Know the rights of tenants Arm’s length transactions—always Be aware of short sale streamlining developments SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 40

Chapter 4 Listing Short Sales Criteria for a Short Sale • Exercise: You Are Their Adviser and Fiduciary – Know the positive and negative options – Know reasons why each is what it is SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 41

Chapter 5 Listing Short Sales Mindsets: Sellers, Buyers, Lenders, and Agents • Mindset Map: Traditional vs. Distressed (see your guide) – Consumer stress and anxiety – Sellers desperate – Buyers seeking steals – Lenders overburdened with properties – Agents poorly informed about process – Unique transaction differences SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 42

Chapter 5 Listing Short Sales Mindsets: Sellers, Buyers, Lenders, and Agents • Sellers – Tough place to be – Why choose a short sale? (see guide and handout version in tool kit) • • Credit scope impact Financial record Time to qualify again Down payment needed in future SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 43

Chapter 5 Listing Short Sales Mindsets: Sellers, Buyers, Lenders, and Agents • Lenders – Weighing the cost of foreclosing and creating an REO – Overwhelming volume of files, staffing problems – Wrestling with agent errors: who’s responsible? SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 44

Chapter 5 Listing Short Sales Mindsets: Sellers, Buyers, Lenders, and Agents Truth While all lenders have issues in common when considering a short sale, you must understand the differences in how short sales are processed from one lender to the next. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 45

Chapter 5 Listing Short Sales Mindsets: Sellers, Buyers, Lenders, and Agents • Listing Agents – Psychologist and grief counselor – Advocate – Master of patience and persistence – Organized and systems-based – Willing to do whatever it takes! SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 46

Chapter 5 Listing Short Sales Mindsets: Sellers, Buyers, Lenders, and Agents • Buyer Agents and Buyers – You must teach them the process to both! • Lender is in charge • Bottom line is unknown, at first • There’s little, if any, negotiation – Teach the requirements and post them for all to see SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 47

Chapter 5 Listing Short Sales Mindsets: Sellers, Buyers, Lenders, and Agents • Exercise: Make Your Own Short Sale Mindset Map—What Do They Need? What Do They Fear? – Homeowner – Lender – Buyer Agent – You! SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 48

Chapter 6 Listing Short Sales The Short Sale Process • Overview: Four Phases 1. 2. 3. 4. Prequalifying Gathering and Submitting the Package Negotiating Closing the transaction SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 49

Chapter 6 Listing Short Sales The Short Sale Process • Agent Goals in the Short Sale Process 1. Get Smart—know the process, cold 2. Simplify—streamline paperwork wherever possible 3. Standardize—smooth work processes and standard communications will win 4. Stand Out—show mastery by looking that way on paper and acting that way in person SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 50

Chapter 6 Listing Short Sales 10 Steps to a Short Sale 1. 2. 3. 4. 5. Prequalify Seller Assemble Package List the Home Obtain an Offer Submit Package and Offer SHIFT Tactic 11: Distressed Properties 6. Follow Up 7. Negotiate 8. Appraisal 9. File Approved 10. Deal Closes V 3. 4 © 2009 Keller Williams Realty, Inc. 51

Chapter 6 Listing Short Sales The Short Sale Process • Step 1: Prequalify Seller – Interview technique or questionnaire • On your turf, not theirs – – – Personal and contact information Details of their loan Essential facts of their hardship Past marketing information Motivation HOA SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 52

Chapter 6 Listing Short Sales The Short Sale Process Truth Reluctance to provide information, or a slow response or no response without prompting from you, is a sure sign that things are probably not going to work out with that homeowner. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 53

Chapter 6 Listing Short Sales The Short Sale Process • Step 2: Assemble the Package – Pull everything the lender and you will need in one place – Package details on following slide and in your guide SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 54

Chapter 6 Listing Short Sales Eleven Package Ingredients 1. 2. 3. 4. 5. Hardship Letter* Listing Agreement Authorization Letter* Financial Statement* Recent Bank Statements and Tax Returns 6. Fully Executed Purchase Contract SHIFT Tactic 11: Distressed Properties 7. Short Sale Disclosure* 8. Buyer Preapproval Letter 9. Preliminary HUD-1 10. CMA 11. Fax Cover Sheet* * = Samples in Tool Kit V 3. 4 © 2009 Keller Williams Realty, Inc. 55

Chapter 6 Listing Short Sales The Short Sale Process • Exercise: What Documentation Must Be Included in the Short Sale Package? SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 56

Chapter 6 Listing Short Sales The Short Sale Process • Step 3: Price and List the Home – Follow MLS rules – Provide instructions for agents – Do a great CMA—be the expert that the seller and lender need • Your CMA will be tested later by the lender SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 57

Chapter 6 Listing Short Sales The Short Sale Process • Step 3: Price and List the Home, cont. Truth Listing a short sale property at a price that is both CMA tested and has a great chance of meeting the lender’s net requirements is a big secret to short sales success. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 58

Chapter 6 Listing Short Sales The Short Sale Process • Step 3: Price and List the Home, cont. – Know short sale math (see your guide) • Factor in costs, commissions, and negotiating room • Have a good handle on standard lender net requirements (these vary widely market to market) • Calculate backward to the listing price needed SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 59

Chapter 6 Listing Short Sales The Short Sale Process • Step 4: Obtain an Offer Truth With the vast majority of lenders, it is only after an offer is received that you submit the seller’s package you have built along with that offer. You are applying for short sale approval based on a specific offer. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 60

Chapter 6 Listing Short Sales The Short Sale Process • Step 4: Obtain an Offer, cont. – Let investors help—if they’ll follow through – Multiple offer strategy • Lowest offer submitted first? (depends on how your local market is moving) • One offer at a time is the smart policy SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 61

Chapter 6 Listing Short Sales The Short Sale Process • Step 4: Obtain an Offer, cont. Truth Most top agents say under no circumstances should second or third offers be submitted to the lender when one offer is already in their hands. It will only cause confusion and delay. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 62

Chapter 6 Listing Short Sales The Short Sale Process • Step 5: Submit Package and Offer – File must be complete! – Use a bold cover sheet • Loan number prominent • Table of contents or document checklist – Share history of pricing that brought the offer SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 63

Chapter 6 Listing Short Sales The Short Sale Process • Step 6: Follow Up – Ask, ask—assume nothing, ever! – “What is your procedure from here? ” – First 30 Days = Lender Processing – Have a communication routine and a contact – Be sure foreclosure is postponed! SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 64

Chapter 6 Listing Short Sales The Short Sale Process • Step 7: Negotiation Phase – What You Must Do • • • Approach all lienholders promptly First lienholder in driver’s seat Second and third lien holders can block the deal Put lienholder demands in writing Know standards for settlement Watch out for HOA liens SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 65

Chapter 6 Listing Short Sales The Short Sale Process • Step 7: Negotiation Phase, cont. Truth Successful short sale agents have different views about whether to take on short sales with more than two lien holders. Some say it’s too hard and time consuming. They refer this business. This is an individual agent’s business decision. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 66

Chapter 6 Listing Short Sales The Short Sale Process • Step 7: Negotiation Phase, cont. – Outsourcing pros and cons • Pros—leverage your time; increase capacity; control staff costs • Cons—not knowing the details; fee problems; negotiators don’t know market; close rates no better than yours SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 67

Chapter 6 Listing Short Sales The Short Sale Process • Step 8: Appraisal – Ordered appraisal a sign things are moving Truth The critical factor in price agreement is any gap between your CMA and the appraisal (or BPO) done for the lender. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 68

Chapter 6 Listing Short Sales The Short Sale Process • Step 8: Appraisal, cont. – Meet the appraiser—control access – Be aware of new “arm’s length” appraisal standards – Appraisals can be appealed SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 69

Chapter 6 Listing Short Sales The Short Sale Process • Step 9: File Approved by Lender – Watch for deficiency judgment loopholes – Check • • Closing date Liens settled Commissions unchanged Who is paying what costs? SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 70

Chapter 6 Listing Short Sales The Short Sale Process • Step 10: Deal Closed – Avoid last-minute fee negotiation disappointments – Seller brings no money – Seller need not attend – Know the “wait and hurry up” syndrome (long negotiations, short closing timelines) SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 71

Chapter 6 Listing Short Sales The Short Sale Process • Lender Rejects the Deal? – Their net was not met – Too little time left – Missing information – Internal job transfers – New lender/loan sold – You can dispute and appeal SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 72

Chapter 6 Listing Short Sales The Short Sale Process • If Buyer Walks Away? – Get active in MLS, ASAP – Post as “lender pre-approved short sale” on MLS if the deal failed over something other than price • Know about FHA, VA Short Sale Policies (see your guide) SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 73

Chapter 6 Listing Short Sales The Short Sale Process • Exercise: Do You Know the Ten Steps to a Short Sale? SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 74

Chapter 7 Listing Short Sales Lead Generation • Lead Sources—There Are Many – – Other agents Your database Your current clients Your ongoing listing appointments Truth Always ask three questions: Are circumstances threatening your home ownership? Have you missed a payment? Is your home worth less than you owe? SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 75

Chapter 7 Listing Short Sales Lead Generation • Lead Sources, cont. – – – – Farming Expired listings Expired short sale listings FSBOs Notice of default lists Public Notices of Auction Delinquent property tax lists Title companies SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 76

Chapter 7 Listing Short Sales Lead Generation • Lead Sources, cont. – Media marketing and promotion – Relationship marketing (lenders, divorce attorneys, classes) Truth Top agents in distressed markets are almost all great communicators. They have learned to step up their expertise and then share it by educating sellers, buyers, and buyer agents. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 77

Chapter 7 Listing Short Sales Lead Generation • Exercise: Do You Have More Lead Generation Ideas for Short Sales? SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 78

Chapter 8 Listing Short Sales Evaluate Listing Short Sales and You • Is There a Fit? What Is It? – Personal demands • • Persistence, patience, and organization Leverage help of others Systems oriented Learning based SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 79

Chapter 8 Listing Short Sales Evaluate Listing Short Sales and You • Is There a Fit? What Is It? , cont. – Business demands and options • • End-to-end short sale agent Negotiator for others Referral only Multiple businesses—short sales and REOs; distressed and traditional business side-by-side, or in separate units SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 80

Chapter 8 Listing Short Sales Evaluate Listing Short Sales and You Truth The choices are yours. Evaluate them. Get some coaching or mentoring. Make a choice, and take action to bring it to life. SHIFT Tactic 11: Distressed Properties V 3. 4 © 2009 Keller Williams Realty, Inc. 81