0
0
0

The Golden Rules of Communication When Working on Distressed Properties, Pt. 1

by Chris Michaud

chris-michaud-acceptance-group

Chris Michaud is the owner of Acceptance Group LLC and ChrisMichaud360.

The following is part one in a two-part series

Here are some rules to live by when working on foreclosures and short sales. Some are more applicable to one or the other, but most are valid for both. They certainly aren’t the only ones, and you should seek the advice and counsel of your attorney and broker before adopting them.

1. Disclose! Disclose! Disclose! – My business partner and I created a much-emulated property and process disclosure that we made sure every buyer and buyer-agent signed when submitting offers. With distressed properties especially, buyers need to know what “as is” means. They also need to know the difference between “marketable title” and “insurable title,” and they should procure the services of an attorney before they submit an offer.

We spell out that all due diligence is the buyer’s responsibility. There are no warranties expressed or implied, and many customary processes done by a conventional seller will not be done by the lender(s) or lien-holders.

That document saved us and our clients a huge amount of time, expense and minimized our liability.

2. Know to Whom You Speak – Before you write the offer, know who the lien-holders are and their decision maker(s). Speak to them all about what you are trying to do to help gauge your prospects for success. In a short sale, the wise agent utilizes the services of a professional “short sale negotiator,” often a well-versed attorney who specializes in the field. Most lenders allow both a professional negotiator and a real estate agent to get paid from the proceeds of the transaction.

3. Communicate to Everyone All the Time! – Distressed properties often involve several parties besides the typical buyer, sellers, their respective agents and attorneys. There can be more than one lien holder or mortgagee whose payback terms are already in default, or in danger of becoming so soon. In addition, there may be utility services, municipal liens or compliance issues that are unresolved. Several parties to the transaction may receive only a percentage of what they are due, especially those that are subordinate to superior lien holders.

The more parties involved with a transaction – and with limited resources to distribute to satisfy debts – the more challenging the transaction. Therefore, it is imperative that everyone communicates fully, and that there is a demonstrated trust and good-faith effort to get the transaction completed to the best of your ability. Failure to communicate in good faith with full disclosure will result in failure nearly 100 percent of the time. A clear resolve to inform all parties every step of the process, and with appropriate permissions from the parties to do so, will improve your chances of closing.

Being known as the agent who can get challenging transactions done sets you apart as the expert in distressed property sales. Word gets around, and when attorneys, accountants and lenders you work with are asked, “Who can help me sell my house,” you are likely to be one of their top agents to get referred that business.

4. Get the Property Sold to the Best of Your Ability – The seller(s), buyer(s), agents involved and all the lien-holders have different motivations and challenges they face in the transaction. Stay on track. Keep emotion out of the transaction. Facts and logic will keep the transaction together a lot better than allowing personal, biased judgment and emotions to rule with the process.

5. Getting Reimbursed for Expenses – Short sale lien holders will spend nothing for repairs or maintenance. Lenders for foreclosures are usually required by local statute to pay for health, safety, hazardous conditions and utilities to maintain a property during the foreclosure process. Most require agents to advance funds to pay for these expenses, and have specific billing processes to get reimbursed for them. It can be quite challenging to fully recover all expenses made on their behalf.

Get all expense requests and approvals in writing in advance of expending any funds for maintenance or utilities, and fully understand the reimbursement procedures for the same. Once the closing occurs, you will be hard pressed to receive any expenses not already authorized in writing, and even then there is usually a very limited time frame for submission of outstanding bills. I know brokers who have lost tens of thousands of dollars in uncollectable expenses.

Stay tuned for part two, which will look at cooperative agents, lender rules, multiple-offer disclosures and treating all buyers the same.


Chris Michaud is the owner of Acceptance Group LLC and ChrisMichaud360, which offers real estate, consulting and educational services to private and industry clients. He is the co-author of a soon to be released book (in early 2015) about the ill-fated government policies that affected the financial and real estate markets, which were designed more for social purposes and political gain rather than economic growth and sustainability.

Chris is an accomplished real estate investing expert, and has served clients for more than 30 years throughout most of New England with real estate consulting services, brokerage, training and development. He has owned, operated or managed several major real estate franchises, including ERA, Coldwell Banker, Century 21 and World Properties International.

Read More Related to This Post

Comments

  • I simply want to tell you that I’m very new to weblog and definitely loved your web page. Probably I’m likely to bookmark your blog . You really come with superb articles. Kudos for sharing your blog.

  • Good day! Would you mind if I share your blog with my facebook group? There’s a lot of people that I think would really enjoy your content. Please let me know. Thank you|

  • Unquestionably believe that which you stated. Your favorite reason seemed to be on the web the easiest thing to be aware of. I say to you, I definitely get annoyed while people think about worries that they just do not know about. You managed to hit the nail upon the top and defined out the whole thing without having side effect , people could take a signal. Will likely be back to get more. Thanks

  • Attractive section of content. I just stumbled upon your weblog and in accession capital to assert that I get actually enjoyed account your blog posts. Any way I will be subscribing to your feeds and even I achievement you access consistently rapidly.

  • I think this is among the most vital info for me. And i am glad reading your article. But wanna remark on few general things, The website style is wonderful, the articles is really great : D. Good job, cheers

  • I’m extremely impressed with your writing skills as well as with the layout on your weblog. Is this a paid theme or did you modify it yourself? Either way keep up the nice quality writing, it is rare to see a nice blog like this one nowadays..

  • I like what you guys are up also. Such intelligent work and reporting! Keep up the superb works guys I¡¦ve incorporated you guys to my blogroll. I think it will improve the value of my website 🙂

  • I am now not positive the place you’re getting your information, but great topic. I must spend some time studying more or understanding more. Thank you for wonderful information I used to be looking for this info for my mission.

  • Train Travel says:

    Wow! Thank you! I continuously wanted to write on my blog something like that. Can I include a fragment of your post to my blog?

  • I delight in, result in I discovered exactly what I used to be taking a look for. You have ended my 4 day long hunt! God Bless you man. Have a great day. Bye

  • I think other web site proprietors should take this website as an model, very clean and fantastic user genial style and design, let alone the content. You are an expert in this topic!

  • Good ¡V I should definitely pronounce, impressed with your web site. I had no trouble navigating through all the tabs and related info ended up being truly simple to do to access. I recently found what I hoped for before you know it in the least. Quite unusual. Is likely to appreciate it for those who add forums or something, website theme . a tones way for your client to communicate. Nice task..

  • oak flooring says:

    Definitely believe that which you stated. Your favorite reason seemed to be on the internet the simplest thing to be aware of. I say to you, I certainly get irked while people consider worries that they just do not know about. You managed to hit the nail upon the top and also defined out the whole thing without having side effect , people could take a signal. Will probably be back to get more. Thanks

  • Hey There. I found your blog using msn. This is a really well written article. I will make sure to bookmark it and return to read more of your useful info. Thanks for the post. I’ll certainly return.

  • gadget news says:

    Great blog here! Also your site loads up very fast! What web host are you using? Can I get your affiliate link to your host? I wish my web site loaded up as quickly as yours lol

  • Great ¡V I should definitely pronounce, impressed with your website. I had no trouble navigating through all the tabs and related info ended up being truly easy to do to access. I recently found what I hoped for before you know it in the least. Reasonably unusual. Is likely to appreciate it for those who add forums or anything, web site theme . a tones way for your client to communicate. Nice task..

  • Attractive section of content. I just stumbled upon your website and in accession capital to assert that I acquire actually enjoyed account your blog posts. Anyway I’ll be subscribing to your feeds and even I achievement you access consistently quickly.

  • I¡¦ve been exploring for a bit for any high-quality articles or blog posts in this kind of area . Exploring in Yahoo I at last stumbled upon this site. Reading this info So i am happy to convey that I have an incredibly excellent uncanny feeling I came upon just what I needed. I such a lot certainly will make sure to don¡¦t overlook this site and provides it a glance regularly.

  • that’s good, thanks for sharing,.. I think this is great blog

  • I was suggested this web site by my cousin. I’m not sure whether this post is written by him as no one else know such detailed about my trouble. You are amazing! Thanks!

  • Glass Door says:

    Good site! I really love how it is easy on my eyes and the data are well written. I’m wondering how I could be notified when a new post has been made. I’ve subscribed to your RSS feed which must do the trick! Have a nice day!

  • What i don’t realize is in reality how you are no longer actually much more neatly-appreciated than you may be right now. You’re so intelligent. You recognize therefore considerably in terms of this subject, made me for my part imagine it from a lot of numerous angles. Its like women and men don’t seem to be involved except it is something to do with Lady gaga! Your own stuffs excellent. Always care for it up!

  • This is very interesting, You are a very skilled blogger. I’ve joined your feed and look forward to seeking more of your magnificent post. Also, I’ve shared your website in my social networks!

  • Hello, Neat post. There is an issue together with your site in internet explorer, could check this¡K IE nonetheless is the marketplace chief and a big element of folks will miss your magnificent writing due to this problem.

  • SEO Agency says:

    Thank you for the auspicious writeup. It in fact was a amusement account it. Look advanced to more added agreeable from you! However, how could we communicate?

  • I am really impressed with your writing skills and also with the layout on your blog. Is this a paid theme or did you customize it yourself? Anyway keep up the excellent quality writing, it is rare to see a nice blog like this one nowadays..

  • that’s good, thanks for sharing,.. I think this is great blog

  • I would like to express my affection for your generosity in support of persons who require help with that idea. Your very own dedication to getting the solution up and down had become exceptionally informative and has in most cases enabled somebody like me to get to their ambitions. This warm and friendly help and advice implies much to me and additionally to my peers. Regards; from each one of us.

  • Very efficiently written article. It will be valuable to everyone who utilizes it, including myself. Keep doing what you are doing – i will definitely read more posts.

  • I have been browsing online more than 3 hours lately, but I by no means found any attention-grabbing article like yours. It¡¦s lovely worth enough for me. In my view, if all site owners and bloggers made just right content as you probably did, the internet will be much more useful than ever before.

  • that’s good, thanks for sharing,.. I think this is great blog

  • Hi! I just wanted to ask if you ever have any issues with hackers? My last blog (wordpress) was hacked and I ended up losing a few months of hard work due to no data backup. Do you have any solutions to stop hackers?

  • Diet program says:

    that’s good, thanks for sharing,.. I think this is great blog

  • that’s good, thanks for sharing,.. I think this is great blog

  • that’s good, thanks for sharing,.. I think this is great blog

Join the conversation

Oops! We could not locate your form.