Realtors® Help Buyers, Sellers Navigate Short Sale Transactions

WASHINGTON, May 15, 2009

A short sale can be a good alternative for homeowners who can no longer make their mortgage payments and hope to avoid foreclosure; however, navigating these long and often confusing transactions can be challenging for even the seasoned real estate professional.

Realtors^® attending the Housing Opportunity Forum yesterday at the Realtors^® Midyear Legislative Meetings & Trade Expo gained insight on how to better assist both buyers and sellers through short sale transactions.

“Realtors^® add value to the real estate transaction and can help home buyers and sellers solve problems and effectively negotiate short sale transactions,” said National Association of Realtors^® President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “The new incentives as part of the Making Home Affordable Program that the federal government announced yesterday are an important step in streamlining the short sale process, and Realtors^® stand ready to help.”

A short sale is a transaction in which the homeowner’s mortgage lender agrees to let the owner sell the house for less than is owed, and the bank forgives the borrower of the difference. The benefit of a short sale is that the lender often receives a higher amount of the remaining loan balance than if the home went into foreclosure; short sales also help homeowners reduce the damage to their credit. Foreclosures are much more expensive for lenders than short sales, and Realtors^® are critical to the success of those transactions.

Forum panelists were Marcel Bryar of Fannie Mae; Rod Luckhart and David Knight of Wells Fargo; Realtor^® Boyd Campbell from Lanham, Md.; and Michael and Stacy Spickes, America’s Home Rescue. Realtor^® Bonnie Boyd, 2009 chair of NAR’s Housing Opportunity Forum, moderated the panel.

“Homeowners need Realtors^®,” said Bryar, vice president and deputy general counsel, Fannie Mae. “They need you to be honest with them, to provide them with a fair assessment of value, and to partner with them and champion them through the short sale process as their trusted adviser.”

One common short sale challenge is obtaining the accurate value assessment of short sale properties. Bryar said Fannie Mae has forged partnerships with local Realtor^® associations and multiple listing services across the country to access the most current home price data and improve home value assessments. In addition, streamlining the short sale process will help increase the speed and success of short sale transactions, as would a greater effort to bring investors and processors to the table, he said.

Realtors^® can help their clients take advantage of a variety of government programs designed to help keep homeowners in their homes, according to Rod Luckhart, national vice president of government and industry relations for Wells Fargo Home and Consumer Finance Group. Available programs include Hope for Homeowners, Hope Now, Homeowners Affordability and Stability Plan, and the Make Home Affordable Program.

NAR supports Realtors^® with a wealth of short sale resources, as well. NAR and Wells Fargo developed the Realtor^® Short Sale Guide, a primer for Realtors^® and their clients on the short sales process. Realtors^® looking for additional education on short sales can sign up for the Real Estate Buyer’s Agent Council’s one-day course, Short Sales and Foreclosures: What Buyers’ Representatives Need to Know. The course outlines the foreclosure process and offers advice on educating buyer-clients to prevent foreclosure, tips for getting involved in the foreclosure market, and guidelines for working with real estate owned properties.

REALTOR^® magazine offers a free Webinar on short sales called Short Sales: Finding Income in a Tough Market. During the hour-long Webinar, short sale expert Scott Thompson of Mortgage Resolution Services helps participants learn the basics and best practices for handling short sales from both the listing and selling side. NAR also partnered with Freddie Mac on a Webinar presentation, Introduction to Short Sales for the Real Estate Professional.

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