HOW "WE" DO SHORT SALE?
Short Sales have become
an important and necessary part of Real Estate. My Team and I believe
that the key to a successful RE transaction is a clear understanding of
how we handle a transaction that can have many variables. We list and
sell all Short Sales with the same approach and instruction to sellers
and agents. This gives us the greatest possibility of success for all!
- The property is listed at market value. It is in no one's best interest to price the home below market value. Price reductions occur, as they do with all our listings, based on agent feedback and market changes.
- Properties will be on the market for at least 5 days to solicit offers. Multiple offers will be evaluated based on qualification, price and buyer willingness to hang in there for what may be a lengthy process. We will open Escrow, cash a deposit check and move forward with the best offer and hope to have one viable back up offer. In rare cases we will consider 2 back up offers. Inspections and loan processing timeframes will start with Lender approval unless the buyer wants to do so sooner at their expense. We require our sellers to have a complete package turned in with the listing agreement and that package will be submitted to the Lender with the offer.
- We will typically status selling agents and sellers via email and will copy both on any Lender communication. Because approval can take anywhere from 30-120 days, we will status only when we have something to report, specifically when the Lender assigns a negotiator, orders and appraisal, etc.
-
All offers must be
complete, including the Short Sale Addendum, and submitted with a Lender
pre-approval letter, fico scores and verification of down payment.
Incomplete offers will not be considered. ___________________________________________________ ADVANTAGES AND DISADVANTAGES TO A SHORT SALE
Compared to a Foreclosure... There are no disadvantages to a Short Sale when compared to a Foreclosure, just a few hurdles. First of all, let me briefly define a Short Sale. Simply put, a Short Sale is a situation in which a home is sold to a new buyer, and the sales price is less then the face value of the mortgage loan, plus back payments (if any), plus all other sales and closing costs such as Title, Escrow and real estate commission fee's.
How do I benefit? The main advantage of a Short Sale is it is less damaging to ones credit. For the most part, a Short Sale appears on one’s credit report as a settlement on account. Loan officers state that a Short Sale may hinder another home purchase for up to 2 years while a Foreclosure can hinder another home purchase for up to 4 or 5 years.
Some credit counselors claim that a Foreclosure will damage ones credit by as much as 200 points more then a Short Sale. If one intends to borrow money for a major purchase, one’s ability to get another loan at a reasonable interest rate is easier achieved without a Foreclosure on your credit report.
The other advantage of a Short Sale is the sense of dignity and responsibility. During a Short Sale, the homeowner is marketing the home for sale with an experienced Short Sale Real Estate Agent or Short Sale Specialist, in an attempt to sell the home at the best price thus bringing in as much money as possible to the Bank. When the home is sold to a new home buyer, the homeowner moves out upon closing in an orderly and dignified manner, just like any other home sale transaction.
How does the bank benefit? Many banks today would prefer to accept a Short Sale versus going through with a Foreclosure repossession of the property. In today’s declining market prices, the Short Sale Specialist must convince the bank that accepting the offer submitted make the best financial sense for the bank. In a Foreclosure, the bank has to spend thousands of dollars and wait months to take possession of the home. They then need to spend monies to maintain it, market it and wait at times months to sell it. After all of these expenditures, they most of the time would have to sell the property for less than what they could during a Short Sale.
Hire a Specialist! Hire Abraham! _________________________________________________________________ BENEFITS OF A SHORT SALE vs. FORECLOSURE Minimize The Damage To Your Credit A short sale will affect your credit but not as detrimental as a Foreclosure will. A Foreclosure comes with a Final Judgment which remains on your credit report for 7 years. A short sale usually is reported as a “settled” account on your credit report. By maintaining prompt payments on other credit lines and diligently working on improving your credit score, you may be able to rebound to a decent credit score within a couple of years.
Your personal well being experiencing a foreclosure can be emotionally disheartening. The feeling of losing your home to the bank or possible eviction by a bank can lead to many sleepless nights or even tension within your family. Living with the effects of the final judgement or foreclosure on your credit report for 7 years will require possible explanations whenever you apply for credit. A foreclosure can be mentally devastating. A short sale, handled by a short sale real estate agent, is the sale of your property just like any other real estate transaction except it takes much longer due to the negotiated settlement process required with the bank. You do not get evicted from your home. You sell your home with a pre-determined closing date just like any other real estate transaction. Most importantly, there is no need for any explanations why you lost your home in a Foreclosure!
You Can Buy Another Home Within 2 to 3 Years If you do a short sale and as long as you maintain yourself current on all of your credit obligations, you will be able to purchase another home within a couple of years. This housing crisis will still take some time to recover if not recover. Focus on re-establishing your credit score and you will be able to take advantage of today’s rock bottom real estate prices. Home prices should remain this low for the next few years. ____________________________________________________________________ Who Qualifies for a short sale? In order to qualify for a short sale, the seller must prove to the bank one or more of the following conditions:
~ Loss of job, and difficulty in finding new suitable job
~ Job Relocation, when equity is deficient
~ High medical expenses due to disability, injury or illness
~ Divorce
~ Unable to afford the loan from the beginning
~ House needs unexpected major repairs
~ Overextended Credit
~ Changing Economy
~ Adjustment in mortgage payment due to interest rate
Incidentally, these are also the most common reasons for a foreclosure.How do I benefit?
A Short Sale Package Is Required A short sale package it used to determine whether a homeowner can afford the property. Most lenders already have a standard package which they will send to the borrower upon request. The borrower is expected to provide financial information to include income and household expenses.
The seller must fill out forms with the Listing Agent to be submitted to start the Short Sale process - and submitted with any offer. These forms include:
~ The Listing Agreement
~ Authorization to Release Information form
~ Hardship Letter
~ Financial Statement
~ Copies of 2 year Income Tax Returns
~ Copies of Bank Statements (2 previous months)
~ Seller Net Sheet (a copy of the HUD form with offer)
~ Contract (when offer is accepted)
Hire a Short Sale Specialist! Home owners in this situation should contact an experienced Short Sale Specialist to not only list and market their home, but also handle the entire short sale process for them.
Mortgage Assistance Relief Services Disclosure Century 21 Vision Realty or Abraham Magana assumes no responsibility nor guarantees the accuracy of this information and is not engaged in the practice of law nor gives legal advice. It is strongly recommended that you seek appropriate professional counsel regarding your rights as a homeowner. Century 21 Vision Realty and Abraham Magana is not associated with the government, and our services are not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage you could lose your home and damage your credit.