Don't Be Scared...of Short Sales

The latest in horror shows....The Short Sale!

   If you were to read the press and speak to some real estate agents or buyers, you would hear exclamations of fear and trepidation.

What is a Short Sale?  

 The sale of a home by a party that needs to move that owes more on the home than the present market(buyers) will pay for the home

Yet, no home purchase or home sale needs to be a "fearful" venture.  Though no two home purchases/sales will ever be the same, it is true that a Short Sale brings extra wrinkles to the process.


The biggest wrinkle is that the Bank(s) holding the mortgage liens must approve the sale price and terms that the ready and able buyer and the ready and able seller agree upon.  A second wrinkle is the seller's lack of funds to do any repairs; home is sold "as is".  Typically, a home inspection is allowed but only as a "check point" for the buyer as no repairs will be completed.

Thus, a buyer or seller must be prepared for:


    A:  Probable slow response for the bank's approval of the contract
    B:  Additional forms or submissions of documents at the
             time a contract is ratified by the buyer and seller.
    C:  Conflict between 1st Lien Holder and 2nd Lien Holder(s)
    D:  Contract falling through due to home inspection noting
             major system faults in home or the buyers/sellers 
             unwillingness to accept bank's terms of sale.

Recognition of these factors plus proactive steps by a buyer or seller will relieve much of the stress and "pain" of the transaction.


Steps the Seller can take:
     1.   Contact Bank immediately for Short Sale package, gathering 
               all the information required.
     2.   List your home with an SFR(Short Sale and Foreclosure 
               Resource) certified Realtor. 
     3.   Be honest with Realtor regarding mortgage(s) owed so that
               a "possible short sale" can be recognized and addressed.
     4.   Contact and secure the services of a Real Estate Attorney
     5.   Consult with your accountant regarding the tax implications
     6.   Assist in all matters that any party requires in a timely
               manner.


Steps the Buyer can take:


     1.  Search for homes with an SFR Realtor.
     2.  Recognize that Short Sales will require a longer than
            normal closing time.
     3.  Recognize that Short Sale doesn't always equal "Bargain".
            It is not unusual to see a Short Sale priced higher than
             the market will bear.
     4.  Recognize the Seller may agree to a "low ball" offer but
            the Bank may reject the "net proceeds" it will receive.
     5.  Have Title Work completed prior to submitting an offer to
            verify the liens on the property(your Realtor can ask
            the Seller's Realtor but it is possible that Realtor doesn't
            have the whole story).
      6.  Read all of the Bank's addendums to the Sales Contract!!!
             Submit to your attorney anything you don't understand
              or can't believe you must adhere to.


So don't run "Scared"...... Be Prepared!!!


Questions???  


 Ever buy a short sale?? 
                                        WHAT DID YOU EXPERIENCE???
Did you ever need to sell short?


          

    

Short Sales--Today's Reality

Having a sinking feeling about moving from your current home to a new area as you know your mortgage is greater than the value of your home? Frequently the value of the home is less than the mortgage or mortgages due to taking equity out of the home for vacations, cars and college tuition. If this is your situation, you aren't alone.

Today, numerous sellers are having such a sinking feeling initiated due to a job transfer, marital challenge or such life changing event that was unplanned. I am sorry to say but that adage that Misery love company seems to apply!

Yet, if you or someone you know and love is in this predicament, you should know that you/they can survive the short sale. Though the particulars of an individual situation may vary, the key steps in dealing with a short sale are:

1. Have a Realtor provide a realistic valuation for your property with
multiple comparable properties
2. Make all House Payments, Property HomeOwner/Condo Payments
and Home Insurance Payments up-to-date

Note: Banks typically if not paid the full monthly payment will
pay interest first, then payments and other payments will
be paid.

2. Gather your data: Current Pay Stubs
Past 2 Years Tax Returns
Past 6 month Bank Statements
Statement of Hardship

3. Contact Your Bank, ask for Short Sale Department
Ensure you seek a fax or letter with specific requirements and timeframes
for document handling

Discuss the means that the Bank will handle the difference between
home's value and loan value. Make copious notes!!! Ensure you
know the name and telephone number of your Bank contact person.

Authorize your chosen Realtor to speak directly with the Bank regarding
the Short Sale. You will find he/she can reduce your frustration through
the process.

4. List your home at the price the Realtor suggests. He/she will be looking
to get the most to cover your loan but ensure the house is priced to sell
and to appraise so that you can successfully sell the home.

Though the Short Sale process may not be as straight forward as this "4
Step Process". Yet, these are mandatory step to sell your home when
it's value is less than the mortgage(s).