I've talked with a lot of agents that have been trying to get short sale listings. I have also talked with distressed borrowers that are trying to find the right agent to help them. Based on feedback, what is the best way to market to this group.
Many agents have subscriptions to preforeclosure websites or research homes that are in lis pendins. Then they send them a mailer telling them how they can get their home listed. The problem is the distressed homeowner has received over 100 mailers so what are the odds they are going to choose yours. If you are going after homes in lis pendins, stop by their home in person. Provide them with resources and success stories on how you've successfully closed short sales in the past. The most successful realtors I've talked to, take this approach. However, many of them don't provide resources and visible information. If you provide this then you have a leg up.
Another approach to think about taking is getting the distressed borrower before they go into lis pendins. This is the marketing side of the equation. I have never met a real estate agent that does this personally but I read where a realtor in California is partnering up with HUD approved preforeclosure groups. These groups meet with distressed borrowers before many of them even go into lis pendins. Stop by an office and see if there is a way you can partner up with an individual in these groups. Chances are, they can send you business.
The number one thing to remember is to make yourself different. Provide informational resources and success stories to get the client.
Tuesday, November 27, 2007
Tuesday, November 13, 2007
FIRPTA and the Short Sale
An interesting issue arose on a closing we had recently with regards to FIRPTA and short sale. FIRPTA is a capital gains tax on foreign nationals who sell their homes. Those that qualify for the FIRPTA withholding are selling an investment property or selling their home for more than $300,000. The withholding is 10% which is forwarded to the IRS and then reimbursed back to the seller after a potential withholding.
FIRPTA gets tricky in the short sale. A short sale can only be approved if the seller is making no money on the sale. However, if there is additional money being held that would eventually be reimbursed back to the seller, the lender won't approve it (because the seller would eventaully get the withholding back). The lender won't deal with the withholding because they don't want the extra work in getting additional money back. So who sends the withholding to the IRS? In the closing we handled, the realtor fronted her commission in place of the withholding. This is risky on two fronts. First, the realtor could wait up to a year to get the money back and, secondly, they may not get all their money back.
Always, keep this in mind where helping a distressed borrower out with a short sale. If they are a foreign national, there may be nothing you can do.
FIRPTA gets tricky in the short sale. A short sale can only be approved if the seller is making no money on the sale. However, if there is additional money being held that would eventually be reimbursed back to the seller, the lender won't approve it (because the seller would eventaully get the withholding back). The lender won't deal with the withholding because they don't want the extra work in getting additional money back. So who sends the withholding to the IRS? In the closing we handled, the realtor fronted her commission in place of the withholding. This is risky on two fronts. First, the realtor could wait up to a year to get the money back and, secondly, they may not get all their money back.
Always, keep this in mind where helping a distressed borrower out with a short sale. If they are a foreign national, there may be nothing you can do.
Thursday, November 1, 2007
Foreclosure Activity Rises Again in Third Quarter
RealtyTrac, a data provider and an online marketplace for foreclosure properties, released its Quarter Three-2007 U.S. Foreclosure Market Report on Thursday, which shows the number of foreclosure filings jumping 30-percent between the second and third quarter—and nearly 100-percent when compared to last year.
When looking at the actual number of foreclosure filings—which include default notices, auction sale notices and bank repossessions—RealtyTrac says nationwide there were 635,159 foreclosure filings during the third quarter involving 446,726 individual properties.
“August and September were the two highest monthly foreclosure filing totals we've seen since we began issuing our report in January 2005,” said James J. Saccacio, chief executive officer of RealtyTrac. “Although not all areas are being hit as hard as others, the rise in foreclosures is quite widespread, with 45 out of 50 states documenting year-over-year increases in the third quarter. Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets.”
A regional breakdown from RealtyTrac indicates that the states of Nevada, California, and Florida topped the firm's list of states with the highest foreclosure rates for the third quarter. Meanwhile, California, Florida and Ohio ranked the highest in the nation for having the most foreclosure filings during the third quarter.
Source: DSNews.com
When looking at the actual number of foreclosure filings—which include default notices, auction sale notices and bank repossessions—RealtyTrac says nationwide there were 635,159 foreclosure filings during the third quarter involving 446,726 individual properties.
“August and September were the two highest monthly foreclosure filing totals we've seen since we began issuing our report in January 2005,” said James J. Saccacio, chief executive officer of RealtyTrac. “Although not all areas are being hit as hard as others, the rise in foreclosures is quite widespread, with 45 out of 50 states documenting year-over-year increases in the third quarter. Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets.”
A regional breakdown from RealtyTrac indicates that the states of Nevada, California, and Florida topped the firm's list of states with the highest foreclosure rates for the third quarter. Meanwhile, California, Florida and Ohio ranked the highest in the nation for having the most foreclosure filings during the third quarter.
Source: DSNews.com
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