Real Estate Information Archive


Displaying blog entries 1-10 of 12

Do Disclose Short Sales in the MLS and Advertising

by TeamForYOUrDreams

The fact that a property will be a short sale has to be disclosed in the MLS.  The simplest way to disclose a short sale is to say something like “the sale is contingent on lender approval of a short payoff of the existing loan.”   There are also all sorts of other phrases to disclose this. 


What about commissions?  Since lenders frequently try to cut the commission, how does the listing agent deal with that possibility?  If you specify a certain commission to be paid to the agent for the buyer, you will have to pay that amount at closing, unless the buyer’s agent voluntarily lowers their commission.   If you want to be able to adjust the commission, specify in the listing that the commission is subject to the lender’s approval and may be renegotiated.   The listing agent can also specify that the commission to the buyer’s agent will be 50% of the total commission approved by the lender. 


Some Realtors feel that the fact that a property will be a short sale should be put in advertising.  There is not enough room in most ads to put in every material fact about the property, so I do not see how that should be required.  You do not have to put all the required disclosure statements in your advertising, so you should not be obligated to say it is a short sale. 


Most short sales are sold “as is” because the bank wants to get the amount shown on the closing statement (HUD) that is presented at the time the lender approves the sale.  Since the seller usually has no money, any repair costs would come out of the proceeds of the sale, reducing the payment to the lender.  Do you have to put “as is” in the MLS and the advertising.

To set the proper expectation, you need to disclose that the house is a short sale.  It does not make a pleasant surprise.


For a more detailed discussion on this topic, please go to

Rule #1 No Hostile Emotions

by TeamForYOUrDreams
In my upcoming book Create a Great Deal, Rule Number 1 is No Hostile Emotions. One of the functions of a real estate agent is to be a shock absorber, to keep the emotions from your client from agitating the other side, or vice versa. You also need to prevent any hostile feelings from poisoning the interaction. When you are negotiating over a home, both the buyers and sellers are under stress. The sellers are giving up what has been the center of their world, and the buyers are trying to establish a new place that will reflect their status, values and ego. At some stage, the personalities of the parties may not mesh and the contentions will create a charged atmosphere. You need to have grace under pressure. Concentrate on the sale and the issues in the sale. Then, try to deal pleasantly with the personalities involved. The personalities are a temporary problem, while buying or selling the house is the long-term result. There are 14 rules to guide your negotiating in my book Create a Great Deal. For further information on this topic, please go to

First Time Homebuyers Shouldn’t Buy Without A Buyers Agent

by TeamForYOUrDreams

Anyone who buys real estate should consider having the assistance of a real estate agent. This is especially important when you are buying your first home.  Actually, it is almost a necessity for a first time homebuyer, because they have no experience to guide them.  Not being represented by a buyer's agent can cost the first time home buyer a great deal, because errors in judgment can lead to an expensive education.


Keep in mind that when a buyer enlists a real estate agent to help buy a property, they are really hiring a real estate firm along with all its agents. Of course, the buyer’s main contact is the specific agent they signed with, though other agents within the firm might help as needed. If a Buyer Agent is hired to represent you, they must promote your best interests; be loyal to you; follow your lawful instructions; provide you with all material facts that could influence your decisions; use reasonable skill, care and diligence; and account for all monies they handle for you.


As part of this agreement, a Buyer Agent cannot pass along any confidential information about you to sellers or their agents thereof without your permission, while they represent you.  If you sign a buyer's agency agreement, your agent works for you.  If you do not sign a buyer's agency agreement, the agent works for the seller. 


Buyer's agency is an amazing consulting relationship.  The buyers agent has to use every skill available to represent you, dig out all the material facts you might want to know, give you the best advice, and you do not get to pay the agent.


For a more detailed discussion on this topic, please go to

Special Military Benefits Make Short Sales Easier

by TeamForYOUrDreams

One of the causes of financial distress is relocation.  Being in the military is a frequent cause of relocation, so it makes sense that there are special programs for short sales and other assistance for the military.  Members of the Armed Forces do so much for our country that it is important for real estate agents to provide special service to them. 

Military personnel and federal employees who are “under water” with their mortgage can benefit from a program by the Department of Defense that is administered by the US Army Corps of Engineers under the Base Closure Act known as HAP (Homeowner’s Assistance Program).   This program was extended under the American Recovery and Reinvestment Act of 2009.

The website says that “HAP provides assistance in four ways. For eligible applicants, the Government may:

  1. Reimburse you for part of your loss from selling your home.
  2. Assist you, if you don’t have funds from the sale of your home to pay-off your mortgage.
  3. Purchase your home by paying off the mortgage.
  4. Help, if you default on your mortgage.“

For short sales,  the private sale reimbursement program is the most applicable.  Under that program,  the military member or qualified government employee sells their home and gets reimbursed for some of the losses on the sale of the home. 

So, the home is sold with a short payment to the lender, but with an agreement to reimburse the lender later when these benefits come in.   This is an excellent use of the short sale process, as it gets the seller moved gracefully and may get the lender fully paid. 

So, if your seller is in the military or a qualified federal employee, look into these special benefits.  The members of the Armed Forces deserve to get every benefit allowed, as they have definitely earned it.

For a more detailed discussion on this topic, please go to

Steps to Guide Your Decisions

by TeamForYOUrDreams

You need to develop certain principles that work for you in negotiating, and then follow them nearly every time.  Negotiating is an art, with a little science that is mostly probability, so you need to know when to apply a principle, and when to shelve it. Here are four main principles but there are more:


1. Your Clients’ Interests Are Paramount


Your clients’ interests come way in front of yours. Do not let your client miss buying the home of their dreams just because you want to do some fancy negotiating. If they think it is worth the price, be sure you give them your advice, but if they want to proceed, it is their life.   In the same manner, if it is going to take forever to negotiate a deal on the property they love, your obligation is to proceed and take the time required to get the best deal.  Another instance where your client’s judgment is paramount is the success of the negotiations. You might think it went extremely well, but if the client is not happy, there goes your repeat and referral business.


2. Let the Other Side Feel that They Won


Forcing your counterpart to recognize that you are victorious is counter productive. If they feel that they won, they will do everything possible to close the sale smoothly. If they feel that they lost, they will do everything possible to have a victory before the sale closes.


3. Don’t Push: Present Choices


I have yet to meet anyone who says they like a pushy salesman. We help people make decisions.  This principle is particularly appropriate for listing presentations. You discuss with the potential sellers that they can (1) Decide not to sell (2) Go For Sale By Owner (3) Use a discount firm or (4) Use my Team. Present all the advantages and disadvantages of each choice, and if you are the right choice, they will come to it. The first advantage of this technique is that you get clients who really support the decision they made. The second advantage is that you avoid clients who are not right for you. There are some listings that you do not want.


4. Present with Confidence and Conviction


According to President Lyndon Johnson, “Nothing convinces like conviction.” If you believe in your position, exude conviction.


In law school, they teach the future lawyers that 10% of the effect is the words you say, and 90% is how you say it. Be confident in what you are presenting. Don’t say this is your initial offer, that you want to run it up the flag pole, or that this offer is a good start. Each one of those phrases tells your counterpart that you are not serious about this offer. Present the offer as being a good offer.


For a more detailed discussion on this topic, please go to

Is This The Right Time To Buy Your First Home?

by TeamForYOUrDreams

 The old saying “Buy Low, Sell High” sure sounds like obvious advice.  How can a first time homebuyer tell when to buy real estate?  


There are two fundamental considerations, for all buyers:

-          Can you afford the home now?

-          Will you stay in it long enough to justify the initial costs?


The first point includes consideration of mortgage rates.  This point also means you need to consider your income, assets, and other debt – can you make the commitment to buy and maintain a home now?


The second point recognizes that there are some significant one-time costs when you buy, and when you sell, so doing both quickly is a bad idea.  It is typically recommended that a buyer feel sure they will stay in the home 2-3 years, minimum, but situations do vary. 


First time homebuyers have two huge advantages right now:

-          You don’t have to sell another home first!

-          You can get up to $8,000 from the government!  Not a loan, but free money!


We are in a slower market than we are used to, meaning there are more homes for sale now than usual, and fewer qualified buyers.  That, combined with the low interest rates available, defines this as a Buyers Market.  As a non-homeowner, that means you get the benefit of buying in a Buyers Market without the penalty of selling in one too.


So, if you can buy now, should you?

-          Larger than usual inventory of homes for sale means more to choose between

-          Low interest rates mean you can get more home for the same money

-          A Buyers Market means you have more clout than in a Sellers Market

-          The government’s $8,000 gift expires Dec. 1


That adds up to making this an unusually good time to buy a home anywhere from Cary to Wake Forest or any other part of the Triangle in North Carolina.


For a more detailed discussion on this topic, please visit

Don’t Let the Buyer Misunderstand a Short Sale

by TeamForYOUrDreams

Many Realtors have never done a short sale.  If they represent buyers, they do not know what to tell them to explain the short sale home buying experience.  If you are listing a short sale, be an information resource for the buyer’s agent. 

The first point to explain about a short sale is that you do not know how long it will take the lender to review the sale.  You may have some experience with the same lender, but that does not mean they will be as efficient this time as they were last time. 

The second point is that negotiating on a short sale is different.  The sellers might sign anything at any price, because they want to get rid of the house, out of trouble and possibly avoid foreclosure.  You do not have a deal that can close until the lender approves it.

The third point is a short sale is not a sure thing.  The lender may not approve the short sale, or if the seller cannot pay the mortgage, the lender may foreclose. 

The fourth point is that the house stays on the market in a short sale.  The buyer needs to know that the house is still for sale until the contingency for lender approval is eliminated, and the buyer may have to outbid the other offers. 

The fifth point is to tell the buyer not to spend any significant amount of money on the short sale until the lender has approved the short payment.  

A sixth expectation for a short sale is that the lender is going to try to negotiate to get more money. 

A short sale is a different type of transaction altogether, so you need to explain the differences to the buyer’s agent and the buyer so that they have a home buying experience that is as pleasant as possible.

For a more detailed discussion on this topic, please go to

Negotiating Style Killing Your Deals?

by TeamForYOUrDreams

If you change your style of negotiating, you can have less stress, happier clients and create great deals. Most of the Realtors you negotiate with try to win by making you lose, which is why it is called Win-Lose negotiating. Some commentators call it Zero Sum or Distributive, but win-lose gets the point across better. The other type is Collaborative negotiating, also called Win-win. If you can practice Win-win negotiating, you will be a much more successful Realtor, not to mention more popular in the profession. Here is the difference between the two.


Win-Lose Negotiating


In this style of negotiating the parties view the transaction as having a fixed amount of something, and the more one party gets, the less the other party gets. In this type of negotiating, you “play your cards close to your chest” and do not disclose anything important about your situation.


Win-Win Negotiating


You will live longer if you learn Collaborative Negotiating. It is frequently called Win-win, a term that is used way too much, because it implies that everybody wins equally. This type of negotiating is characterized by questioning and listening, creating trust, avoiding hostile emotions and concentrating on ways to get mutual satisfaction. The first stage of this type of negotiating is for the parties to cooperate and exchange information, so they can create more value in the entire deal. The second part of this style of negotiating is for the parties to claim their share of the value.


To engage in this type of negotiating it is important that each side provide useful information about their circumstances and explain why they want to make a deal by discussing their real interests honestly. You concentrate on satisfying your counterpart’s needs. This style is different from Win-Lose negotiating, where the concentration is on what you can take from your counterpart.


For a more detailed discussion on this topic, please go to

How Much Cash Does a First Time Homebuyer Need?

by TeamForYOUrDreams

True or False? First Time Homebuyers can’t get 100% financing.
True or False? First Time Homebuyers pay 20% down or pay Private Mortgage Insurance.
True or False? 100% Financing means you don’t have to pay anything up front.


You may be surprised, but the answer is all three statements above are false. And there is no “one size fits all” answer to how much cash is needed – it depends on a lot of things including:


-          Loan programs vary in their down payment requirements. Talk with your Realtor and several lenders to see what will work best for you.


-          Closing costs vary. When you buy a home there are a variety of fees that must be paid. Your lender can provide a Good Faith Estimate that will list most, but perhaps not all of those fees and costs, so talk to your Realtor too.


-          Mortgage Insurance requirements vary. Some loan programs require the buyer to pay for insurance for the loan. It insures the lender, not you. On FHA loans, it is called Mortgage Insurance Premium, or MIP. On conventional loans, it is called Private Mortgage Insurance, or PMI. FHA loans will have an upfront MIP fee and a monthly MIP charge.


-          Don’t forget your earnest money. If you write a check for an earnest money deposit when you submit the offer to purchase, that money is available for your use at closing. While rare, it is possible, such as when the seller pays all closing costs and you borrow 100% of the purchase price, that you can even get some or all of it paid back to you at closing!


For a more detailed discussion on this topic, please go to

Don’t Have Short Sale Moving Problems

by TeamForYOUrDreams

In a real estate short sale, you have a seller with no money who needs to move out of the property. Understanding how moving costs money and having a plan for the proper thing to do is a very important step to understand.

The best answer occurs when the home mortgage lender allows some payment to the seller at the closing of the home sale that can be used for moving expenses.

Some short sale agents tell the buyer to pay money to the seller outside of the closing, or outside of escrow, so it does not show up on the closing statement.  One of the requirements for short sales is that all parties have to certify to the lender getting the short payment that the seller is not getting anything out of the sale.  Be careful who you listen to,  they may get you in trouble.

There is another seminar leader whose Realtor training is to pay the seller $2,500 for work the seller is doing as a part of selling a home.  The examples given are that the seller does the open houses and other work that the agent would otherwise have to do to market the short sale home.   It could be argued that this may have some merit, because it is a payment for services rendered and the mortgage lender may see that there is some way that the payment can be justified, so they may choose not to challenge it.  However, this a risky way of selling a home.   

So what do you do to avoid lying to the home mortgage lender?  There should be no problem if you want to take the idea above and pay the seller for work done, and pay a reasonable amount for whatever service the seller provides in a field that does not require a real estate license. 

This is a recurring problem and there are solutions that will not get you in trouble.  For a more detailed discussion on this topic, please go to

Displaying blog entries 1-10 of 12

Contact Information

Photo of Team For Your Dreams, Inc. Real Estate
Team For Your Dreams, Inc.
REMAX United
7721 Six Forks Road, Suite 110, Raleigh, NC 27615
Raleigh NC 27615
Fax: 310-347-4041