Marketing Tips for Short Sale Listings

Consumer-centric marketing was especially critical for capturing short sale listings.  Here are several factors that drive this focus:

• Many homeowners don’t know they are “underwater” because they think their home is worth more than it is.
• Many owners who are at the end of their rope don’t know about a short sale option, or the difference between a short sale and foreclosure.
• Many prospective short sellers are private and guarded because they are embarrassed, hurt, scared, humiliated.
• Many prospects begin with information gathering: 1) to gain trust in the real estate agent, and, 2) to educate himself or herself before meeting with an agent.
• Rainmakers who specialize in distressed properties appreciate informed clients because working with an educated consumer greatly reduces counseling time and problems later in the process.
• High-value information is key to incubating short sale inquiries until they are ready to step forward for a personal appointment.

At the first appointment, when the prospect learns they will be “leaving money on the table” if they don’t do a short sale, Rainmaker real estate agents ask if it is “still important for them to sell.”   Commitment at the front end avoids hassles later.

What have your found that is effective to earn the trust of short sale homeowners?

Yesterday the U. S. Department of Housing (HUD) issued a press release clarifying the status of the up to $8,000 federal tax credit in use with Federal Housing Administration (FHA) loans.

Here are some of the new guidelines for homeowners using the $8,000 tax credit:

• State Housing Finance Agencies and certain non-profits can "monetize" the tax credit up to the full amount of the tax credit (depending on the amount of the mortgage) to allow borrowers to immediately (rather than waiting for their federal tax refund check) apply the funds toward their down payments.

• Buyers financing through these state and non-profit organizations will be able to use the tax credit for their down payments via a short-term loan provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the down payment. (Remember that individuals can gift up to $13,000 per person per year tax-free.)

• Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5% of appraised value or their closing costs, which can help buyers achieve a lower interest rate. Buyers cannot use the tax credit amount as part of their 3.5% down payment, but can use any or all of the funds as additional down payment.

In light of these changes, what does this mean for the first-time buyers you are working with? The news is brand new – have you told them yet through your many marketing methods?

In addition, the National Association of Home Builders predicts that the tax credit will fuel 160,000 home sales in the U. S. What portion of the 160K homes that are sold by November 30 will you have a part in?

Remember the date: the first time home buyer tax credit applies to purchases closed/settled on or before November 30, 2009. Don’t lose the opportunity to inform your buyers and get their business before time runs out for this federal tax credit.

No question today’s market is a great time to buy a first home. Rates down. Wide selection. FHA easier. Bigger first-time buyer tax credits. Prices marked down. Affordability up. Bank-owned, short sale, and under-valued bargains to be had.  (See Gooder Group brochures for titles to educate and inform these buyers.)

So where do Rainmakers find the first-time buyers today? Living at home with their parents. Yes, some are renters of regular apartments or houses. But stunning new 2008 Census findings report that 20 million young people between 18 to 34 – the prime first-time buyer group – live at home with their parents. Even more striking is that 20 million is 30% of the entire age group! That’s right. Almost one third of first-time buyer prospects live at home. Rainmakers are discovering their customer database, sphere and contact list of homeowners — that they work by mail and phone for new listings — is also delivering a bumper crop of stay-at-home first-time buyers.

Did you know the number of twenty-somethings living with their parents has increased by 50% since the 1970s, according to the researchers for the Network on Transitions to Adulthood, a group financed by the John D. and Catherine T. MacArthur Foundation? What’s more, of the kids who moved out by age 22, 16% returned home before they turned 35. The recession, long job searches for new grads or loss of jobs for working children are forcing adult kids to turn back to their parents or grandparents for financial help.

What’s new about the boomerang generation this time around is that everybody has to pull his or her own weight. The parents are often as interested in helping the kids move on as the kids are. Some kids pay rent. Some contribute to expenses. Others have an agreement with a timetable for moving out.

At kitchen-table qualifying meetings, Rainmakers say they often talk to both parents and kids about the new $13,000 limit on tax-free gifts in 2009 — no gift tax for the donor, no income tax for the gift recipient. The total gift can add up to $104,000 if each of four parents give the $13,000 maximum to two kids separately (4 x 2 = 8 gifts x $13,000 = $104,000). The next tax year they can repeat the gift.

Now is a great time to work your database for new listings – and first-time buyers. Plus suddenly larger inter-generational families are a natural market for move-up buyer prospects as well.

Not everyone knows that FICO was short for Fair Isaac Corporation.  Now Fair Isaac Corporation, the company that develops the credit scoring system that is widely used, decided to go with FICO as their formal company name as of March 10.

Read their entire press release here .