The Porch

Short Sale and Foreclosure and Disclosure

Should foreclosure be disclosed?

Foreclosure means the lender has started a legal procedure to have the property on which it holds the mortgage to be sold at auction.

This may be a short sale, and it also may not be a short sale. A short sale is not a foreclosure but obviously the two situations can be related.

 

Say a property on Adams Avenue “under foreclosure” is presently worth $375,000 and the mortgage balance due is $300,000.  Perhaps the seller lost his job…or a divorce has caused the mortgage payments to go unpaid.  If the property is sold for $375,000 or is sold for any amount that exceeds $300,000 plus costs of the sale, there is no need to disclose that the property is in foreclosure as it not a “material fact.”

What is confidential here?

It does not affect the seller’s ability to perform on the proposed purchase contract and it is a confidential situation.

 

-----------------------

 

If loans on a property on Maples Street total $430,000 and Maples Street is presently worth less than $430,000, then the property and the situation can be considered a short sale.  In this situation, there is a “material fact;” the seller’s potential inability to perform.  This fact needs to be discussed with seller, consent obtained from the seller, and probably disclosed to the transaction.

Confidential information cannot be disclosed without your client’s consent.  If it’s not confidential information…just go one more step and get consent for disclosure for all matters in writing anyway.

 

---

 

This is a discussion of market conditions and various real estate, lending, and legal procedure.  I’m not offering legal advice.  I’d suggest legal assistance if you have questions about the legal stuff. 

In Utah, an attorney is required to obtain a real estate license if she or he regularly processes real estate transactions on behalf of clients.

 

from The Porch…

 

 

 

Mike B. Class Star®

With Just a Smile

There’s a section in most marketing and consumer behavior texts on subliminal perception.  For years I’ve taught what the “experts” say about it; that it generally can’t be proven to work.  The technique was used in attempts to manipulate consumers with subliminal messages flashed onto movie screens…and even inside television programs that invite the viewer to “eat popcorn,” “drink Coke,” and “sign the REPC.”

I’m just kidding about “sign the REPC,” but what if it was possible to evoke automatic responses from customers that do not involve conscious thought—as the technique theorizes it can?

Well, in my classes I’ve repeated the findings by experts that they can’t make it work—and so the technique has generally been discredited.  But I just read this article on the Discovery News web site that may be of interest—as some recent experiments are generating results that appear to support the original theories.

Here’s the link:  Discovery News Article on Subliminal Perception.

The studies have a slant toward explain intuition.  Intuition has come in quite handy when attempting to read our client’s minds, don’t you think?  ;-))

For example, a poker player who somehow always knows when to fold or call a bluff may be picking up on telltale signals from his opponents, using a part of his brain unrelated to conscious thought.

Sometimes we actually can sense what we need to do…or what the client will say…so, then, perhaps we can help the client say it?

Being a male, however, there are two things that women do that are remarkable (and thanks to Jimmy Buffett and Glenn Frey of the Eagles for pointing them out):  Women always know before we tell them, and, they can open a door with just a smile.

from The Porch…

 

 

Mike B. Class Star^®

 

Some Ideas for Selling in a Soft Market – 3

Offer Home-Buying Incentives, Rather Than Throwing Goodies at the Deal…

There are very effective ways to do this…and not some so effective methods. Although a flat-screen TV is appealing, or leaving the car in the garage are certainly eye-catching …not all of your sellers can do afford these maneuvers and they can be counter-productive.

The buyers are trying to decide upon a house to buy. Help them buy the house your clients are trying to sell. 

Use closing costs as incentives. Cash-strapped buyers may tend to favor your seller’s home over others when your seller offers to help with closing costs. I’d suggest this is far more appealing that a flat screen TV.

Your sellers can also offer to pay for an interest rate buy down. Pay a point or two…when we’re talking about moving a $300,000 property and it’s urgent; a “point” costing the seller $500 to $1000 or so can be fairly enticing to the buyers when they see their proposed mortgage interest rate drop and their monthly payments reduce. I think a “normal” buyer would opt for the interest rate reduction and lower monthly payments far more readily than a big television screen. 

The foregoing costs less as incentives than perhaps leaving the piano or buying plane tickets to Maui for buyers…and these items help with the home buying decision-making where it makes a big difference— a big enough perceived difference to persuade the buyers to purchase your property rather than moving on to the next dozen or so down the street.

 

 

----

Here’s a link for some help on fixing up stuff in the place you want to market:

www.naturalhandyman.com

 

from The Porch ...

*

*

*

Mike B.  Class Star^®

*

*

 

Some Ideas for Selling in a Soft Market – 2

How Does The Home Look?

Fix it up first: Fixer-uppers tend to be ignored in slow real estate markets. Buyers can find good deals without buying a place that needs to be stripped of textured wall paper. 

errrr….am I the only one that doesn’t like that job? 

Curb appeal is critical:  There are so many options that if the place isn’t attractive from the street, a prospect will drive past it without even stopping.

There are so many others places that are looking good …

--

• Put mulch in the flower beds and around trees

• Mow and trim the lawn.  It’s greening up now.

• Replace damaged or ugly window screens

• Yellow flowers by the front door will make it memorable.  People remember yellow.

*

*

     • Change the doorknobs and update the doorbell ringer buttons.

*

*

*

*

*

*

from The Porch…

*

*

*

*

Mike B.  Class Star^® 

*

*

*

Next time … some financial maneuvers for a soft market.

*

On Innovation: Lessons of the Square Watermelon

This article is from FinancialHack.com.

Japanese grocery stores had a problem. They are much smaller than their US counterparts and therefore don't have room to waste. Watermelons, big and round, wasted a lot of space. Most people would simply tell the grocery stores that watermelons grow round and there is nothing that can be done about it. That is how I would assume the vast majority of people would respond. But some Japanese farmers took a different approach. If the supermarkets wanted a square watermelon, they asked themselves, "How can we provide one?" It wasn't long before they invented the square watermelon.

The solution to the problem of round watermelons wasn't nearly as difficult to solve for those who didn't assume the problem was impossible to begin with and simply asked how it could be done.

Read the rest of the story here.

*

from The Porch…

Mike B.  Class Star^® 

Some Ideas for Selling in a Soft Market

Hi, All:

Price:   Don’t start with a high price.  In this market, agents may not even bother to show the property.  Then if the old familiar “Price Reduced” rider is placed on the yard sign (which I think should never be used anyway), you’ve indicated to the public and other agency that a bit of desperation has entered into the situation.  Don’t advertise desperation.  It doesn’t work well.

The right price to ask, and to start with, is the low end of the comps.  It must be a bargain to get sold in current market conditions.

Watch comps.  If prices continue to drop, your listing must still compete with the dropping prices. Comp prices from a year or two ago have no effect.  Price for the current market.

Again, don’t use the “Price Reduced” rider.  “New Price” is much more effective.

---

If the property is attracting showings but no offers, then the home itself is likely to the place to look next. And that is the subject of my next blog post on the front porch.  Stay tuned.

--

from The Porch ...

*

*

*

*

Mike B.  Class Star^® 

Steal This Idea

Hi, All:

When you place your expertly crafted real estate for sale adverts, brochure, flyers, and printed materials, always think of your readers as 55 or older.  Use the type size that is kind to their eyes.  Your younger readers won't mind it...and won't even notice.

Use serif type.  Always.  No exceptions.  The words you are reading now are in serif typeface, which has serifs (squiggles and feet and hats and fat and skinny parts).  Serif means that the letter is written or finished off with little feet or hats that give the eye a place to stop and rest--and absorb.

Sans serif type face seems to work okay on computer screens, but look at newspaper or a book and you'll see serif typeface.  It is easier to read, faster to read, and has a higher comprehension rate.

We want our prospects to read our stuff...and not just glance at it...don't we?

--

A couple of years ago I recommended to the Attorney General's office when the REPC was under revision that all the type face be changed to serif type--as it was in Sans Serif at the time.  I've seen the change-over recently.

Check it out...put a REPC in both typefaces side by side and ask someone else not familiar with the contract to read the first page.  Test the speed and the comprehension.

You'll never go back  ;-))

More Steal These Ideas postings on the way, and a tip of the Class Rat hat to Steve Cone for his incredible book "Steal These Ideas!"

*

from The Porch

*

*

*

Mike B.  Class Star^® 

*

*