Short Sales vs. Foreclosures
There’s a lot of buzz going around these days where the words “short sale” and “foreclosure” are being tossed around, but I’ve noticed a disturbing trend in some of the people I talk to who are confused about these terms. Many don’t really know what they mean, or worse, they think they’re the same thing. Given the state of the economy today, this is worth a little clarification.
Simply put, a short sale is when a lender will accept less than the amount owed on a mortgage when a property is sold. Why would they do this? The truth is banks are in the money business, not the real estate business. If it can be shown that they will end up with a piece of real estate falling into their laps if they don’t take steps to allow its sale, they’ll most likely do it and cut their losses.
If for whatever reason the value of the property is less than what is owed at the moment a homeowner needs to sell it, a short sale is the most likely strategy. When this happens, the homeowner ends up getting nothing from the sale except the opportunity to preserve their credit and a perhaps little pride.
Homeowners end up in this situation in a variety of ways. A common scenario is one where they default on a mortgage and end up owing back payments, late fees, property inspection fees, attorney fees and so on, quickly eating up whatever equity they might have had on the property.
If they are unable to bring the account current, the lender will have no choice but to foreclose, which is a process by which they repossess the property due to the lender’s inability to comply with their agreement. At that point, the lender will most likely try to sell the property at an auction to recoup their losses.
As sad as this scenario can be, it presents some great opportunities for investors who are trained in executing short sales or transactions at the pre-foreclosure or foreclosure phases. There are also opportunities for Realtors® who are trained in dealing with bankruptcy specialists and loan mitigation representatives. Lenders will often prefer to work with real estate professionals in negotiating short sales for clients. Short sales expert Will Weaver of Royal Oak, Mich., explains why:
- They’re licensed by the state.
- They adhere to a code of ethics.
- They carry errors and omissions insurance.
- They have too much at stake to cut corners. As licensed professionals, they aren’t likely to commit fraud that could put their entire careers at risk.
It’s Only Fair
If there was ever any doubt in my Dad’s mind that his six-year-old daughter would grow up to be a successful entrepreneur with a fierce sense of justice, equity and fair play in business, they were erased when he received this scathing letter she wrote to the tooth fairy.
My Dad recently found this tucked away in an old cummerbund he dug out to wear to a church function, and thought it would be worth scanning for me. I was roaring when I saw it in my inbox, as was my husband when he found it in his.
“Some things don’t change,” he said, chuckling.
“Well, hey… I lived up to my side of the bargain!” I replied.
He’s right though. Nothing gets under my skin more than unfair business practices, whether I experience them in everyday life or see them in the news. There’s no reason not to conduct business with honor and integrity. What goes around comes around, and you only go around once, so you might as well do it right and make it count.
I have to admit though, it’s pretty funny finding out I felt like this at six.
Home Office or Not…
When Keller Williams Maui started offering offices and cubicles to team members for a monthly fee, it was a godsend to many agents. I even considered signing up because I thought I might get more referrals if I spent more time at the office.
The thing is, I have a pretty nice office set up at home, where I’m not distracted by office politics or other agents, and I have the flexibility to do a lot of different things. I can practice my scripts and do my daily affirmations without feeling self-conscious, and if my office is a mess, no one really cares.
When I set up my office at home, I decided not to take one of the bedrooms. Unlike my husband Peter, who treasures his own little space, I decided I would feel isolated, so I set up my office in a corner of our living room. I like open spaces and the feeling of being outside when I look out the windows at our beautiful island view.
It works great most of the time, but it does have its drawbacks. For instance, Peter comes by occasionally and starts a conversation with me on his way to the kitchen, which I only half-listen to, and then have no memory of, which often results in confusion later — “But we talked about this the other day!” If I stop and give him my full attention, I lose my train of thought or the flow of what I’m doing and have to start over.
The inability to close a door to control the traffic through my office has other downsides. Widgit, my cat, likes to “help”, and my clean (or not so clean) desk is often her favorite place to sleep. Moosh, my other cat, is convinced that when we’re on the phone, we’re talking to her, so she jumps up onto my lap and starts meowing incessantly. She also likes to lay on top of my hand across the keyboard, and reach out from that vantage point to attack my mouse hand until I start petting her with it.
A home office has its pros and cons. I could do without the distractions, but in a way, they remind me of what life is really about, and why I gave up office life to begin with. And at the end of the day, the view outside transforms into a sunset. How many of those have I missed over the years, being stuck in an office?
