To You the Seller – You will be able to avoid foreclosure and sell your home at no cost to you.

To the Mortgage Company – They are not in the real estate business, they are there to lend money, so they really don’t want your house. They are minimizing their losses therefore they want to help bridge the gap.

To the Buyer – They get a good investment on a home. These are not typically good deals for investors because of the loan and property ownership limits imposed by regulatory agencies such as FHLMC/FNMA.

With that being said, just because someone is a real estate agent does not mean they know how to successfully handle a short sale transaction, and this can be disastrous. A Realtor is required by the lender in handling a short sale, but the knowledge of the Realtor regarding short sales is critical and few actually know how to take it all the way through. You do not want someone “feeling” their way through. Make sure you retain a professional.

Following are 5 keys to a successful short sale:

Know the process involved in shorting a loan, not just part of it. Anything that is out of place can cause long delays and ultimately cause the deal to fall through, leaving you back where you started, only in worse shape and frustrated.

Know what the lenders require for different types of loans such as FHA or Conventional and put it in a format that will get their attention. Lenders receive thousands of requests for short sales, and if the packet is in any way incomplete, it goes into the big stack of files to be dealt with if there is enough time. Whereas, if the packet is complete and in their format, it goes into the small stack that gets dealt with quickly.

Know what the banks have to “net” on the sale. There is a way to know exactly what they will take or not take on the loss, not just sending them an offer and hope they take it. This may work on actual foreclosures, but not on short sales. There is a formula, and if your Realtor does not know it, your house will not be priced right and again, there will be much frustration.

Know what the banks will approve in the purchase offer. Will they pay closing costs, repairs, etc.? Again, if you submit something to them they will not allow, it goes back into the big stack. Have an established alliance with the loss/mitigation representatives. Knowing which representatives will get the deal done and not drag it out can be invaluable. These agents are often paid per file, so they obviously like the files that are a “slam-dunk” for them and will get them out faster.

One last thing you should know would be the three stages of the Pre-Foreclosure period. Default: this can be as little as a month, but typically 3 to 5 months. You will be getting letters saying “you are late, please pay.” Acceleration: this is usually a 20 -30 day stage, and you will get a letter called an intent to accelerate. This basically says to pay all your late pays or we will accelerate. Foreclosure: this is the final stage. It is 21 days long. The foreclosure can be stopped with a short sale, but the longer it goes, the less likely it is to happen.

In summary here are the things to know: Timing is critical; don’t procrastinate hoping things will change. You are not alone. Get someone with short sale training to help you. If you find yourself in this situation and have more questions, I will be glad to consult with you. If you abide by these rules, you stand a much better chance at a safe landing.

As you walk in, you are sure to be greeted by either the owner or one of their sons.  After exchanging a few barbs with either of them, make your way past the art laden cigar lounge and the walk-in humidor to a private locker to pick out a cigar for the day. You may choose to buy a soda or engage in a draft beer or scotch. Both are available to cigar club members at no charge (contributions are appreciated). Then plop down in one or the leather chairs, greet your buddies and check out ESPN or Fox News on the 50” plasma television in the lounge area to discuss what will make the world right for today. If you need to catch up on email, complimentary WiFi is available to members as well. Speaking of the cigar club, did I mention the best part? It’s Free! How good is that? There are guys there from every walk of life from truck drivers to attorneys and all seem to share a common bond, fine cigars. There is the occasional celebrity in the cigar world stopping in to say hello from time to time as well such as Kinky Friedman, the Padrons and Avo Uvezian.

If you are in the area, stop by and see Bill or Adam in Rockwall or Gary and Eric in Rowlett, mention you read about them on my website and they will give you their David Ray special which is buy 3 cigars and get the fourth free.

You may have a favorite story about your experience at the Tobacco Box. If so, please feel free to leave your comments in the space below to share with others.

Slow Down
Even though we have so much technology in place to help us, it seems as though we are always in a hurry to complete one project and move on to the next. What happens is that we get so caught up in what we are planning, that it is so simple to have a careless error in what we are doing right now. When we make an error like this, it is so aggravating to think we could have avoided it by simply slowing down and doing what we knew to do.

Read – Don’t Assume
You are reading over a document that you are so familiar with, that you fail to read something that was added in. You have heard the expression, “read the fine print.” That’s because all of us tend to skim through things. When you get that new item that has some assembly required, do you just start putting it together, or do you follow the step by step instructions? How much time could we have saved on Christmas Eve had we only followed those directions.

Understand What You Read
Don’t assume! Don’t just read something; take the time to make sure you understand what you just read and how it relates to what you are doing right now.

Admit You Don’t Know
Oh, this is a tough one! No one likes to admit they don’t know something. Have you heard this one? “If you can’t dazzle ‘em with brilliance, baffle ‘em with bull.” The fact is, there may be at least a couple of things we don’t know, so it’s ok to admit it. When I first got into real estate, I did not want anyone to know I was brand new and had a lot to learn, so I spent many hours studying every detail until I learned it.

Ask Questions
In sports when it gets down to the final minutes and you need a score, you need a “Go To Guy” that you can rely on. My daughter tells the story about overhearing my granddaughter playing with her dolls one day. She was saying, “What will we do; this is really hard. We need to call someone really smart. I know, we’ll call Papa.” Of course that boosted my ego just a bit, but it does illustrate the point. When you admit you don’t know something, go to someone that you have confidence in that will give you good advice.

Follow Through
Once you get your answer, follow through, don’t procrastinate and let something slip by. One of the best ways to do this is to have a checklist. It sounds tedious, but the time you spend making one will be more than doubled in return for less mistakes. In my business, I have a very specific checklist I follow to make certain every base is covered and nothing is left out. By doing this, I don’t have to stop and think to see if I did everything I was supposed to. I can concentrate on the task at hand efficiently.

Trust Your Gut
Where does that gut feeling come from? One good answer is from past experience. The easiest way to spot a counterfeit is to know the real thing perfectly. So, when you come across a situation that just doesn’t “feel right,” it probably isn’t, and you should follow your gut feeling. You will be right far more than wrong.

OK, you goofed, now what? Here are three things that will move your forward after any mistake.

Relax
Don’t panic or hide from the problem, but face it head on. Early in my business life, when I would make a mistake that could cost the company money, I would get unsettled about what was going to happen. My dad gave me some good advice. First, think about what is the worst that could happen, get settled with that and then face the problem. Most of the time it doesn’t turn out worst case scenario, so you can easily cope with what you have to do.

Be Nice
Be humble and up front to the person that you may have caused a problem with, and they are usually understanding and willing to work with you.

Make it Right
Do what you have to to correct the issue, apologize if necessary, but take it one step farther. Share your experience with others so that they can profit from your mistakes. Those of us who have raised children wish they would have listened to us because we made the same mistakes they are making (I just wish they would have listened better).

Interest in foreclosures is on the rise. The amount of searches conducted for foreclosures have more than tripled in the first quarter of 2008, rising by 214%. The survey was conducted in late April of 2008 and shows that over half would consider purchasing a foreclosed home.

Do buyers feel there are negative aspects in purchasing a foreclosed home? Yes, 69% of those surveyed said they believed there were with the negative aspects believed to be 69% cited hidden costs, 35% considered the prospect as risky and 33% mentioed the possibility of the home losing it’s value. These are all valid concerns and should be addressed. The following list of guidelines should help.

Prioritize your needs Make a list of what you consider to be the things your new home must have. Just because you got a great deal on the home, if it’s not what you really want, it’s really not such a great deal. Over a period of time, it is much easier to pay for something you like than something you just settled for.

Talk to experts Consult an agent who is well versed on all aspects of the process to help eliminate those hidden costs and risks involved.

Be current Look at the neighborhood data comparing current data to last years to see what direction the market is moving. This can help ease the concern of the property losing it’s value. Although no one can predict the future, you can still make an educated decision by using this data.

Aim high By purchasing a deeply discounted home, you may be able to move to a neighborhood that you previously would not have been able to.

Get a home inspection Home inspectors are licensed by the state of Texas and will give you a comprehensive list of what is right and wrong with the home. Your agent should be able to give you names of reliable home inspectors and the price you pay for this inspection could potentially save you thousands in unexpected repairs.

Buy at the right time The best foreclosure deals are often situations where the home has been on the market for longer than 60 days. The banks are not in the real estate business and have no desire to carry these listings on their books any longer than possible. Not only does it affect their financials, it also affects how much money they can loan because they are still carrying a non-profitable loan on the books when it could be replaced with one that is.

Buy at the right price After considering all the aforementioned items and know what the value of homes in the neighborhood is and what your repair costs will be, does it make sense? If after spending additional funds for repairs and cosmetics such as replacing carpet and flooring and painting, did you save money? Your time and stress level are worth something and if you don’t show a significant savings after all is said and done, you didn’t get a good deal.

1. Light
   Show your home in its best light, literally! Entering a home that is dark with no lights on and the blinds drawn is depressing. You goal in all this is for the prospective buyer to feel like they have truly found “home”. With somewhat high energy bills, you may not want to spend the extra dollars for leaving the lights on while you are out, but it makes all the difference.
2. Clean House
   Always keep the beds made and everything picked up and neat. A prospective buyer entering a messy house will get the impression that the house has not been well maintained besides the obvious turn-off.
3. Music
   Have some music playing softly in the background. A radio station, CD, or a television music station is the easiest way. You want something like smooth jazz or an oldies station to set the tone. It may seem very subtle, but when shopping new homes, they always have music going in their models. You should too.
4. Candles
   This should be done only when you will be out of the house for a short time! Scented candles such as cookies baking or apple pie appeal to the senses. Obviously, you do not want to be gone for a long while and leave a candle burning, but it is the icing on the cake.
5. Privacy
   Get out of the house. Buyers need to look in closets and cabinets, and they do not feel comfortable doing the things they need to do or making comments with the current home owner present. Often times if they have concerns, their real estate agent is able to address them.

In doing these simple things, you will appeal to the senses and help get your home at the top of the buyer’s list.

Here are three things to consider:

Percent of Net Loss/Gain
Let’s say for argument’s sake, that if you were to sell your home in today’s market, you would take a 5% loss over what you desire to receive. We are all playing on a level playing field, so we would also have to consider that the seller of your move-up home would also take a 5% loss. Base on your existing home value of $150,000 less 5% we are looking at $7,500. On the surface, that is not a loss you would want to take, but if the prospective home’s value is $300,000, the net loss to the seller would be $15,000, yielding a $7,500 net gain to you. The converse is also true. If the market is up, you may gain $7,500 on the sale of your home, but lose $7,500 on the transition.

Good Selection
The primary reason we see sales prices of homes being less at this time is the old “supply vs. demand.” What this means to the buyer is that there is plenty of inventory in all price ranges to choose from. Through my experience, there is really no such thing as the perfect home, but you can get a lot closer to what you desire than you would be able to in a “Seller’s Market.” In times past, you may have been reluctant to sell before you had located you next home. In today’s market that simply is not necessary with the larger inventory.

Interest Rates
The interest rates continue to hold in a very favorable area for the borrower. They have not risen significantly, and though they probably will not go down much, when the market gets stronger, we could see a rise which would also cost you money every month. Again, the news reports how bad the mortgage industry is, and yes they do have issues, but they are still lending money to those who have good credit. What got them into trouble was lending money that should have never been lent. By the way, FHA loan limits have been raised to over $270,000 and dropped a lot of the restrictions that previously made them a little less desirable.

Timing is everything, and if you are considering making a move, this truly is a great time to do it.

Do What You Enjoy
This is probably one of the earliest lessons I remember. He said, “If you are doing what you enjoy, you will be happy and successful.” It had not been until years later that I really understood what he meant. Dad would spend countless hours making sure everything was done right in his business, and I couldn’t understand how anyone could work that much and enjoy it. Well, he did; it was his passion. If you are passionate about what you are doing, it seems a lot less like work. You will strive for excellence because you value and love what you do.

Learn to Listen
We all love to talk about ourselves and what we like or don’t like and tend to not hear what others are saying. In a service oriented business, what we prefer is not always what those we are doing business with would prefer. It’s true! I know it’s hard to believe, but learning to listen and actually hear what others are saying is harder for some than others. It is a talent that is imperative to being successful.

The Client Likes to See you on the Job
I worked in construction with my dad for those 25 years, and it was our job to see that all the sub contractors were there and things were done right. Even though for the last 15 of those years I did not actually do a lot of the actual construction the clients like to see you involved and know you care. I have carried this over into my real estate business with my “hands on” approach. I make sure that my clients are informed throughout the entire process and can concretely see the value I bring to a transaction.

Always be Honest and Upfront
There are so many opportunities we all face that if we bent the rules a little, could possibly help gain an edge on the competition. It’s not right. In construction when bidding a job, you could estimate it low, knowing that later there would be change orders you could make it up on. In real estate you can over-value a home during a listing presentation knowing if you get the listing you can get a price reduction later. The words, “It’s better to be honest and lose one than to have to worry about how to cover your tracks” still rings true to me.

These are some values that I believe work for us all and if followed can lead to a much happier life.

I would like to share a video of someone who has gotten their perspective right and is very inspirational by Randy Pausch. To view video click here.

All you have to do is submit your name, email address and what you like about Rockwall in the COMMENT AREA below. The winner will be announced via email on Sunday, April 13th.

Note: If your property is listed with a Realtor this does not constitute a solicitation of your property or listing. Your submission will also add you to the online David Ray Real Estate Magazine.

One of the things that has helped make Rockwall schools what they are is the fiscal responsibility of the school district. In a recent article written in Texas School Business magazine, the path to financial freedom has been recounted. Rockwall ISD received an award for Distinguished Budget Presentation, an award bestowed on only 16 districts in Texas and 61 in the nation. This has allowed the district to include programs and tools necessary to providing a quality education. I am extremely proud to be a part of this community and wanted to share this not only with those who may be considering relocating to this area, but the existing homeowners need to know what we have as well and know that their tax dollars are being well spent. I would encourage you to click on the link above to read the article and on the link below to learn more about the schools and programs offered.

www.RockwallISD.com