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Ask the Top5 Expert – Short Sales 101

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By Paige Tepping

RISMEDIA, March 23, 2009-As the real estate market continues to spiral downward, real estate agents across the country are adapting their services to better help the millions of homeowners who are facing foreclosure and other serious trouble. Here, Rosemary West, The Rosemary West Team, RE/MAX Realty in Joliet, Illinois, discusses the short sale process and how agents can make it work.

Why are short sales an important option for seller’s in today’s market?

In the simplest terms, short sales are a last hope for people looking to avoid foreclosure. The market that we are experiencing today is full of homeowners who are truly hurting and they don’t know where to start or who to turn to. Short sales, although not an ordinary transaction, are a good alternative for sellers who are either in a foreclosure already, or are headed toward one. It is crucial that real estate professionals take the time to understand that these are real families on the verge of losing their home. It is our job to embrace these individuals and at the same time give back to the communities in which they live, and we work.

What are some advantages to offering short sales?

The biggest advantage to offering a short sale is that it helps the distressed homeowner avoid a foreclosure, which is crucial since foreclosures are one credit item that are almost impossible to repair. Foreclosures stay on your history forever and affect your credit score as well as your present employment and the hiring process for a new job.

What are some of the misconceptions people have about the short sale process?

Many people think short sales can be used as an alternative for homeowners who find themselves in trouble with their mortgage payments, but they are only an option for sellers who are either in a foreclosure already, or are headed toward one. It is important to understand the difference between dissatisfied homeowners- those who are simply upside down with their mortgage and are facing hardships- and homeowners who are in trouble.

What pitfalls do agents need to watch out for when working with short sales?

Before dedicating their time to help sellers through the short sale process, agents need to make sure the seller is 100% committed to the time frame of the process as well as being willing to work with them through the process.

A seller’s assessment sheet is an important tool to help save time and effort in pursuing a short sale. The assessment sheet is based on four criteria and each is graded on a 1-10 scale, with one being the lowest and 10 being the highest.

1. Expectation- The client has to have real expectations of the market and what is possible- both within value and market time.
2. Motivation- What is the client’s motivation to get out of the situation? If they aren’t motivated, they may become disinterested in the sale, and that will be a waste of the agent’s time, money and marketing.
3. Cooperation- Will the client work with you through the short sale process? Will they keep the property neat and accessible to show and be available when you need them?
4. Communication- The client has to be willing to communicate with their agent openly, honestly and on a regular basis. If the client isn’t being upfront, that is a huge warning sign.

What percentage of your time do you devote to short sales?

At this point in time, about 50% of my closings are short sales and repos. My business up until now was centered around corporate relocation, so I had to take a step back and look at my business in a new way. Working with short sales has enabled me to reset my goals and provide homeowners who are in trouble with the guidance they need.

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