You were recently certified as a certified distressed property expert (CDPE). What made you seek out this designation? How does it set you apart from other Realtors?
I got my CDPE because I saw that there were a lot of families in need of help. In these difficult times I realize that now more than ever people need someone that is more than just a sales person. They need someone who not only has experience in selling but also someone who is an expert in negotiations and consulting and is empathetic to their needs. They need a good problem solver and that’s always how I saw my career. Helping people find options. Working with distressed properties (and people) is a lot more work than regular sales and not all agents want to go the extra mile and do this type of work, especially when there are times we do not get paid for our work
How does a real estate agent with this designation have more success with avoiding foreclosure sales vs. somebody who has not been certified? What are some of the different approaches that are taken with a potential foreclosure?
A real estate agent who has this designation has more success because they understand what the lenders require and work with them to be sure the entire package is complete. This agent understands the stress that the lenders and loss mitigation departments have as well as the stress of the sellers. They understand how to consult the seller and be sure first that they are qualified (financially and emotionally) for a short sale before they get involved in this lengthy process.
You are also an expert in short sales, which you define as sales that allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. How “short” are financial institutions willing to sell property? Will they accept payments even at 25 percent below the mortgage?
Institutions vary in their requirements and in what they will do so it’s important to check with them for special requirements. They are not obligated to do a short sale; however, most of them will look at the hardship package and if it makes sense to them they will work with the sellers. Often they will accept a sale within 10 percent of the appraised value. The amount of the mortgage does not always matter. However, many lenders will ask that the seller take out a note with them, often at 0 percent interest. All this is negotiable as well.
Why don’t short sales affect a seller’s credit rating? Won’t financial institutions use it against these sellers in the future when they lose large sums of money?
Unlike foreclosure, there is no place for a short sale on the credit report currently. It may say settled or something to that effect. Many sellers can reestablish their credit within two years and be able to buy a home again. On the other hand, a foreclosure stays on their credit for years and often this could hamper their ability to get a job as this is often a question on the application. People with security clearance type jobs are also affected by foreclosures on their credit and could therefore lose their jobs.
How do financial institutions distinguish from legitimate sellers who have to sell short vs. people taking advantage of the system? After all, it seems as if a seller and buyer could conspire — one to get out of a mortgage and the other to buy property at a lower value.
There are always people who will try to take advantage of the system. Lenders take precautions by working with Realtors and so having good relationships is key.
We are all working together to solve problems and create win/win outcomes.
