LawsonGroupMediation

During the last week of July, congress passed legislation expanding a program aimed at allowing homeowners to rent the homes post-foreclosure.  The lenders prefer foreclosure over short sales (see prior blogs), so they will be strongly promoting this program as an alternative for homeowners.

What they will fail to emphasize, or perhaps even disclose to the homeowners, is that they still will have a foreclosure on their credit report.  More importantly, since applications for new loans must meet Fannie/Freddie standards, they will be asked if they have ever had a foreclosure or a deed-in-lieu.  The result is worse than the negative credit impact, and may prohibit these homeowners from puchasing a new home in the future, perhaps even for the rest of their lives!

In addition, even if they do not care about the negative impact on their possible future purchase possibilities, landlords may often rent to homeowners who go through foreclosure, however, since the banks most likely will not provide a credit reference, landlords might not rent to them after renting from the lender who will not provide a credit reference.

It is vital, when discussing with homeowners the alternatives, that you help them to understand that congress really did not do them any favors in this legislation.  This legislation will help some homeowners in low income housing who do not need credit references to rent slum-housing….er low income housing.

Ken Lawson, JD

TheLawsonGroup Mediation Services

www.LawsonGroupMediation.com

Short sale Realtors all have the same in common:  the length of time it takes to obtain approval adds a lot of stress to your life.  This stress affects your health, your marriage, and your overall quality of life.

This blog is intended to provide some recommended steps you can take to reduce that stress, strengthen you relationships, and help you avoid the negative impacts of stress on your health.

Step one:   Accept multiple offers.  A lot of agents are taking the property off the market when they get their first offer to submit to the lender.  This is a problem for two reasons.  First, if the net to lender is below their minimum threshold, the proposal will either be rejected or the seller requested to sign a promissory note for the difference, which the seller may reject.  Secondly, with short sale approval taking so long, many buyers drop out and it may be too difficult to find a replacement buyer in time.  The agents working with us have been having great success in those MLS boards that permit multiple offers.  Remember, the lenders will approve only one offer, so accepting multiple offers by the seller is not a liability risk.

Step two:   Determine the number of short sales you must list to provide the income you need.  In one large metropolitan area, the agents have a 27-30% success rate in closing short sale properties.  Our agents have a much higher rate. There is a certain amount of gambling in short sales.  First, you can’t know the net to lender minimum threshold, a certain percentage of buyers back out of the deal, or other reasons that prevent closing on the properties.  Some short sale agents and companies limit cases only to those having a high likelihood of success, but they also do not care about the people involved.  Regardless of the reasons, you should determine your success rate and project the number of cases you must close over a year’s time to produce the income you need.  Then conduct those activities that will provide you with that number of listings.  BE CAREFUL THAT YOU DO NOT OVERESTIMATE YOUR RATE OF CLOSINGS.

Step three:   Learn time management.  There are many good time management courses available.  Also, I will blog the basic techniques soon.  Managing your time is critical so that you can do everything you must do to make your real estate business successful and still have time for your marriage, family, health, and recreation.

Step four:   Exercise.  Aerobic exercise has proven to reduce the affects of stress on a person’s health.  Even if this amounts to an early morning walk for 30 minutes, this will have a profound effect.  Take your dog, take your spouse if you can, or go alone.  The quiet time or conversation with your spouse mixed with the aerobic exercise reduces the affects of stress.

Step five:   Journal.  It has been demonstrated that the process of journalling has an impact on the effects of stress.  The time it takes to handwrite your thoughts, your feelings, your hopes, and your fears over the day’s events lowers blood pressure, drains stress, and increases seratonin levels in the brain.

Step six:   Pray.  Prayer has been shown by nonreligious researchers to have a strong effect on stress.

I often encounter people who are suffering from the effects of stress.  I began my life career many years ago in the pastoral ministry, and my caring spirit toward people has never left me.  I have many conversations with agents about increasing the quality of their lives, and the majority of the time, one or more of the above steps is missing.  Even lacking one of the above steps can overcome an agent with stress, but accumulation of affects can be devastating to health, marriage, and quality of life.

If any of you need guidance concening any of the above steps, please contact me either by email or by phone.  My email address is KenLawson@lawyer.com, and my phone number is (208) 360-8689.

Ken Lawson, JD