Presenting a Short Sale to a Homeowner

Well the economy has changed and seventy-five percent of the homes are upside down (term of art which simply means that the mortgage is higher than the market value of the home) and our locators run into homes that we can not purchase unless the banks will take a loss. So how do you get a homeowner to agree to take a short sale on a home?

One of our locators has had the opportunity to perform two short sales during the month of July both were signed by the homeowners. This article will focus on the basics of a short sale from the locators view and the packaging of the short sale to the homeowner.

What is a short sale?

A short sale (sometimes known as a pre-sale by the banks) is a loss mitigation technique for the banks that allows them to move the property without having to foreclose upon the property. Yes the bank will lose some money and may need to get permission from the insurer on the loan to allow a short sale, but the bank is looking at it as less money lost than would be if they were forced to foreclose and then sell on the open market.

In our first example the homeowner had listed her property on the market for $299,000.00 and had lowered to $270,000 130 days later. The listing had expired by the time it came into the system.

We first placed it in our system on July 20, 2006. Administration thought that the house had equity. Last sale of the house was in 1992 for the sum of $128,000.00 dollars. The same owner continued to own the property. It was placed in a route first visit was on July 22, 2006 at 10:30 in the morning. Locator met the homeowner and scheduled a presentation for Monday July 24, 2006 at 10:00 a.m.. Based upon the note of the locator more research was completed on the property ( an index and rehab budget). It was the position of administration that the property had a value of $265,000 fixed and that if it could be purchased for 156-165,000 it would be a good deal. The locator visited the home on the 24th and wrote the following note:

Visited 7/24/06; 10:15AM. Presented HO with Fresh Start Program. Secured release; faxed to Admin. HO indicated that she will be 4 months arrears @ end of July. Monthly mortgage is $1700. Principal due is $209K before fees. HO indicated that the furnace is defective and will need replacement. Current system is steam by oil. Oil tank is in the basement and appears in good shape. Basement is unfinished, stone foundation with cement floor. Basement was wet; not flooded. Difficult to photo because there were no lights that worked. Water is probably due to the failing/rotted bulkhead door. There is no inner door leading out to the bulkhead. Clutter everywhere. HO indicates that the roof was redone 5 years ago. No leaks were observed except around the primary entrance. Some damage due to a problem with the gutter backing up. Entire yard is knee deep in grass. House is surrounded by overgrown shrubs. Interior is primarily open living. Windows – sill rot. One bathroom – needs rehab. Kitchen – cabs are in good shape; gas stove; no overhead range. Don’t recall seeing a dishwasher. Wood floor is in good shape on main floor. Basically, two bedrooms with an oversize utility room that could be made into a third. All carpeted and will need replacement. Ceilings and walls in good shape. Addition is a huge room that needs new floor as well as paint. Deck appears to be in good shape. Above ground pool – liner intact, cover is destroyed. Not sure about the pump and filter. HO did indicate that the septic needed replacement. fireplace on the main floor is used regularly. Not impressed with the wood stove in the “Great Room”. Roof line between the Main house and the addition has a visible seem. Poor construction. Property has potential as a good starter home I suspect. Certainly a stretch to call this a “3 bedroom”. No clean way to set up a 2nd bathroom or a laundry room without major rehab. Could be wrong.
Based upon the note we now knew that we needed to purchase this property for under what is owed. We needed to do a short sale. On July 27, 2006 the documents were placed up on the site for a short sale at a pourchase price of $155,000 plus 10,000 in a bill of sale for the fixtures in the house.
The locators presentation was scheduled for the following evening at the homeowners brothers house. The locator spent at a minimuim of one hour preparing for the meeting and took portions of the short sale memorandum, the index to complete a package for the homeowner to review while he discussed the pricing f the property.

From our conversations with the locator he started with the purchase price of the home in excellent condition being $265,000.00 dollars. Once the homeowner agreed that was the purchase price he went through the list of things that needed to be fixed. (deferred maintenance) Septic system and the cost of replacement. Heating system and the cost of replacement, paint of the interior and exterior. Windows etc. The homeowner agreed that the cost of the rehabilitation of the property should reduce the selling price to a minimum of $225,000.00 dollars. With that and a brokers fee the homeowner would walk out with little to no equity.

The locator then explained our short sale procedure and what it would net the homeowner if we were able to get the bank to agree to the process. Here the homeowner would receive $10,000.00 dollars for her dishwasher, washer and dryers and other personal property in the home. Consequently, the homeowner signed the deal because it was netting her more money than a regular straight sale.

Buying Presents for Other People’s Children

Over the years, it can be startling how many presents you seem to buy for other people’s children, whether your friends children, your children’s friends, nephews, nieces or God children. We hope this guide will give you some food for thought.

Your friend’s children
When we were younger we got into the habit of buying Christmas and Birthday presents for our friends children. Then, as our own children got older, we started to realise just how much stuff children accumulate – all those little presents really add up. One of our friends suggested that we stopped buying for each other and although it seemed a bit mean initially we think she was absolutely right. Certainly, our children haven’t missed these additional presents and we’ve probably saved a fortune.

Your children’s friends
Children will generally get a present from every child that they invite to their party (although we were in awe of one parent who sent their child to one of our children’s party without one!). If you hold a party in the local sports centre and invite the whole class that’s about 30 presents. If you want to see what 30 presents x 10 birthday parties looks like you should see our daughter’s bedroom – and most of the time we only had 10 children or so at a house party!

Have a budget and stick to it if at all possible. Our budget used to be £5 but it has crept up to more like £10 over the last couple of years – more if you add in the card and wrapping paper too. This may not sound like a lot, however, £10 x 30 children is £300 worth of presents!

Ask your child what their friend likes, and just as importantly, what they don’t – this is generally very helpful. If possible, take your child with you to buy the present or sit them with you if you’re buying on-line. Children can often instantly spot what will be popular. Try to avoid buying things which they are likely to have lots of already. By the time they are 7 or 8 most girls will have a room full of cuddlies, diaries, ornaments etc. Our son is only 3 so we’re not sure what the equivalents are for boys yet!

Relations
Now the pressure is really on – it is a well known fact that Aunties and Uncles always buy the best presents! My Auntie and Uncle have bought fantastic presents for my brothers and I and now our children for the last 40+ years. They always seem to be able to spot something that isn’t readily available in the shops and is just that little bit different. And they managed to do it without having a wonderful resource like the internet so really you have no excuse!

Some ideas are:
Think of alternatives to toys – how about a swimming bag and matching towel for school swimming lessons; a really nice backpack, a lava lamp for their bedroom.

If you’re buying toys – can you get something to go with what they already have – an exciting bridge or tunnel for their wooden train set, shiny new vehicles for their garage, a playroom or nursery set for their dolls house. These can give some of their older toys a new lease of life.

You could buy them a music CD or computer game but these can be really difficult to get right unless you know the child really well. You could ask mum or dad if there is anything they are desperate for currently.

Buy an experience rather than a present. If their parents will allow, why not take them out to a local theme park or to see a musical.

OSRAM – The Five Components of an Effective Presentation – Part 2 of 5 the Speaker

How do you give an Effective Presentation? What makes the difference between an average presentation and an effective presentation? This is Part 2 of 5 focusing on The Speaker.

There are five main components of an effective business presentation. The acronym OSRAM should help you to remember them and help you to light up your audience. The five components are:

  • The Objective
  • The Speaker
  • The Room
  • The Audience
  • The Message

You should consider each of these components in turn to maximise the effectiveness of your presentation. Neglecting any individual component can ruin an otherwise successful presentation. Put them together correctly and you will turn on a light in people’s heads; brighten up their lives; get your audience to see and understand things, about which they were previously in the dark.

This series of articles looks at each of these components in turn and discover what needs to be done to ensure the success of that component.

The Speaker

That’s you! Like it or not if you are giving a presentation you will be judged. Knowing that you are being judged is often a major factor in why people are nervous about giving a presentation. It is a perfectly normal reaction. My advice is to recognize that you are nervous, tell yourself that it is okay to be nervous and that it is perfectly normal to be nervous before a presentation and then try to put it to one side and get on with the presentation.

The biggest factor in your success as a speaker is your confidence. If you are confident you will come across far better than if you are timid and nervous. One technique to improve your self-confidence before a presentation, is to say aloud the following statements, preferably before anyone else arrives in the room:

‘I am poised, prepared, persuasive, positive and powerful.’

‘I feel composed, confident convincing, commanding and compelling.’

Write these two phrases on your first Cue Card. Say them aloud to convince yourself that they are true and you are more likely to give a confident, effective presentation.

Confidence is all a matter of self-belief. You need to believe in yourself and you will be more confident, and come across as confident. Do not over do it though. Do not talk down to your audience they will never forgive you!

Eleanor Roosevelt said, ‘No one can make you feel inferior unless you agree with it’.

As perception is far more important than reality, looking confident can mask an awful lot of nerves that are bubbling up under the surface. The aim is to look like a swan gracefully gliding across the top of the water, keeping the feet, which are paddling like mad, hidden from view. Like the majestic swan, how you look and how you dress are very important in instilling that confidence in yourself and in your audience.

Look out of place because of the way you are dressed and it will affect how well your message is taken. Although many businesses have a dress down policy these days, if you are presenting to a business audience it is usually advisably for a man to wear a suit and tie and a lady to wear a suit or similar business attire. Shoes should also be polished, as it is surprising what assumptions are still made about a person in business, based on the state of their footwear.

When you are addressing a group of factory workers who are all dressed in overalls and you want to influence their behavior, then a more casual appearance may be beneficial. You may want to appear less like one of the managers and more like one of the team. Every situation is different but there is never an excuse for not worrying about it.

By wearing clothes that make you feel good, it will help to boost your confidence. Looking good is just part of it you also need to sound good. This means three things:

  1. Speaking loudly enough so that people can hear what you are saying.
  2. Speaking clearly enough so people can understand the words that you are saying
  3. Omitting unnecessary words, grunts and groans.

When you are projecting your voice, you use your diaphragm. This is completely different from shouting, which is achieved through muscles in your neck. It should not hurt to project your voice unlike it does if you shout too much.

Finally, the most comforting thought to have before a presentation is that your audience want you to succeed. From the very outset, they are on your side. It is very rare to have an audience who does not want you to succeed, after all why would they be there. Why would they want you to waste their time listening to someone who is a poor presenter or who does not have anything worth listening to. So go give it, with enthusiasm, emotion and energy.