This article is meant to
serve two purposes:
Purpose #1 -
To develop a roadmap; where real estate agents and realtors will learn how
to earn profits from listing short sales. I will show you how to
literally have investors lining up at your doorstep giving you their
listings. Not once but twice! That's right; can you imagine getting paid
commission twice on the same property, within the same year? Listing
agents will benefit the most from this information which is evident by the
articles' title.
Purpose #2 -
To give the short sale investor an idea of
the level of competency, character, and skills they should look for in a
real estate agent or realtor. Choosing the right agent is an extremely
important part of the short sale process.
Let's be frank. If you are
a licensed real estate agent your primary goal is and always will be to
prospect for listings and buyers. Not only am I a real estate investor I
am also a licensed real estate agent. In addition, I work with a handful
of other real estate agents who would find it hard to replace their income
if I stopped giving them my business.
Did you know that a
mortgage lender who holds title to a property that is in danger of
foreclosure will often allow up to a 6% commission to be paid to a real
estate agent if it is sold through a short sale? There is a huge market
for agents who truly understand the short sales process and can handle the
various tasks involved in order to assist the investor.
As an agent, I would
suggest that you communicate with your broker before you attempt do pursue
a short sale listing for the first time. Make sure that you are in line
with the company and office guidelines and that you are not jeopardizing
any terms of your license agreement. It will also be a wise to find out
if any other agents in your office have had success listing short sale
properties. Don't be surprised if your broker is not too familiar with
the short sale process. I've found that many are not.
There are several items
that are necessary for the process to work. First, you must be able to
convince a short sale investor that you are capable of doing all of the
following:
1. Pulling accurate comps
that justify the amount of the short sale.
2. Writing up a sales contract.
3. Filling out a net sheet for short sale transactions.
4. Negotiating the terms of the agreement with the lender if needed.
5. Showing the property to prospective buyers.
6. Flexibility on terms of a traditional listing agreement.
7. Marketing the property.
8. Providing referrals and recommendations of a valid service provider.
Your responsibilities will
not be limited to the list above. There is a still a vast amount of hard
work and dedication needed to become a known as a preferred agent for
short sale investors. However, the reward is well worth it.
Once you feel confident and
knowledgeable on the short sale process you are now ready to market your
services to investors. Short Sale investors who are being proactive and
finding his/her deals before the foreclosure process starts will
usually have the most need for your services. Agents that I work with
spend more than 60% of their time matching my properties up with buyers,
pulling comps, and filling out net sheets. I would say they spend
approximately 6-8 hours on each deal and receive an average of 4.5% in
commission that I almost always have already pre-negotiated with the
lender. The real bonus is that if I decide to put the property back on
the market immediately after the first closing I will 9 times out of 10
list it with the same agent. Now they have the opportunity to re-list the
property and make another commission. Because of this arrangement, I
always agree to pay a discounted commission. Once the property is
re-listed, it typically sells quicker than the average listing; mainly
because it is below market value which makes it an excellent purchase for
another investor or a homebuyer looking for a steal of a deal.
The agents that I work with
are capable of handling the short sale process from the moment I submit my
package to the lender. Based upon my knowledge of certain lenders
processes, I determine whether it's best for me to take on the
negotiations as an investor, or if I would rather quarterback the deal and
let my agent be the main point of contact. I always have that option. No
matter which route I take I still make sure that the lender pays a
commission. So it's a win-win situation for everyone involved.
I hope that you are not too
confused at this point. I will do my best to explain more on this topic in
part 2 of this article which you will be available in the next.
Until then happy investing!
Best
Regards,
D.C. Fowler, Real Estate Investor/Educator
Next Time: Part 2 - Real Estate Agents: How to Get Short Sale Listings
Making Money with Short Sales
is a step-by-step guide to acquiring property pre-foreclosure. The
comprehensive program includes two exclusive bonus offers.
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