Does anyone have any experience writing a declining market letter for the shortsale department? What kinds of things do you include?
Any advice, ideas?
gregg
Gregg,
Throw a bunch of statistical data at them - maybe a friendly realtor could help. Data I would consider presenting would be: the number of homes currently on the market in a given neighborhood\market area, the current “days on market” for these listings, the number of closed sales within a given time frame - such as 3-6 months to demonstate what kind of market your property in is. Example: number of current listings: 25, number of closed sales within the past 4 months: 11, number of closed sales within the past 6 months: 23. This would indicate that there is a current inventory of over half a year of homes currently available on the market (oversupply with increasing market times). Run a check on the number of sales so far in 2007 in your neighborhood, check their marketing times and maybe competing neighborhoods (average sales price and average days on market, then run the same test for homes in 2006 and 2005 in the same neighborhoods. Most markets in my area are trending downward (lowering average sales prices with substantially increased marketing times). Also run a check of recent expired listings and their days on market and the number of expired listings in 2006 & 2005. One market I was in recently had over a year of inventory currently on the market (very exclusive market $1,000,000+) 37 current listings and only 35 sales within the last year. You want to provide data that shows your current market in a negative light (oversupply, increasing market times, diminished sales activity). Hope this helps a bit - Mark. *I believe lenders are aware the market has been trending downward - let them know you know the same thing!
Unfortunately I think the lenders could care less about your stats. Those who will see your numbers will not even take the time to understand them. Every lender in the U.S. knows we are in a declining market with longer than average market times. Do not rely on these types of stats to get you a discount.
They care about how much you will net to them. Once they have a value for the property your market stats will mean next to nothing.
I would say to base your offers on solid comps, condition of the property and your goals for the property.
You may be right Bovine… The bank had received everything previously requested a couple months back after my initial offer and then counter offer, they requested this declining market letter. I think the deal is ready to go to closing. I think this declining letter may be procedural. I wrote the declining letter just stating the obvious in the re market(ie high inventory, price trends, expired listings)
This deal has taken quite a bit of time–started way back in October. I wish I hadnt worked as hard on this one. Small payoff of only 5 k…but I wont complain when it goes through
5 months for $5k???
You could earn more at Wal-Mart.
Why are you bothering?
I know, its ludicrous. It is my first shortsale deal, though, so I have learned quite a bit from it.
I will know a whole lot more on the next few deals that I do.
Its ridiculous to think that their first foreclosure date was back in mid december and has been delayed 4 times since then! They tell me that they are backlogged with a number of foreclosures. But, also the loss mitigation department has been diffcult to work with as they have lost paperwork and told me incorrect information on a number of occasions.
Gregg975-
What company are you working with?
5k … and since October? Walmart here I come … Just messing with you. I’ve been working on one since September and will not close on the property until April. Once I sell (2 months) I SHOULD net 30k. That learning curve is steep. Just keep chugging on.
Bovine,
The loss mitigation company that I am working with is called American Servicing (part of Wells Fargo).
I should have taken on more shortsales, but was uncertain if this is how I wanted to invest in real estate. I also was not sure how much time a shortsale would take up. Now that I know, I am going to try and handle about 5 at a time and see how that works.
Netting 30 k sounds like a very nice payoff. Hearing stuff like that makes me want to prospect like crazy for next week.
Gregg
What a small world. When you mentioned the above quote I immediately thought of ASC. I have been trying to get them to respond to my short sale request for the past 3+ months. It took numerous reapeated faxes before they had all of my paper work. Next they tell me " it takes 45-60 days before the file is assigned but we have been very busy". The reps are nice but they only thing they say they can do is to send a meesage to the supervisior. I think I’ve called about 20-25 times in this time period to no avail. In this time period the property was been broken into 3 times, suffered burst water pipes and now a homeless person lives there. I guess he’s not homeless now. When I mention the auction date is in two months the rep says ‘we still have plenty of time’. They have yet to even conduct a BPO. My guess/hope is that once they do the BPO it will be fast and furious negotiations.
Anyone else dealt with ASC? Any managerial contact numbers?
Gregg975- Short sales are not for everyone. I think of them as giving me first shot at making a deal. If this is the route you wish to go then increase your marketing and learn to recognize a good deal fast.
They have never talked to me about a declining market letter. All I do is send an ‘reo spreadsheet’, what this is I am trying to show the bank what they will net if they take the house to REO. Unfortunately, they still think they can get almost full price for the house I am working on currently.
steve
OK, I sent in the declining market letter last week, and today the loan adjuster contacted me to say that the shortsale had been approved!
…sweet
congrats! I had a bitch of a time with ASC too. I finally got told that Wells Fargo will NOT do a short sale on a property that has already been foreclosed, and is in redemption. THey SAID it was the investor’s rule (*in this case, Goldman Sachs) so who knows. I’m still gonna make a good fee on it if it goes thru, but a short sale would have been much sweeter. (*note: they didn’t say my offer was low, or anything like that, just that they did NOT to SS deals on properites in redemption.)