SHORT SALE 101 (PART 2 OF 2 PARTS)

Why Not Just Let My Lender Foreclose?

NO! What is the first thing banks do when they foreclose on a property? Hand it over to a real estate agent to get rid of it quick! The foreclosure process is a legal process. It involves attorneys and it costs MONEY.

Once they get the property back via foreclosure they must often sell it for MUCH LESS than market value and pay Realtor commissions and all customary closing costs. Doesn't it make more sense for them to take at or a little below fair market value before foreclosing?

And, even when they do sell if through foreclosure...the does NOT remove your obligation to repay the remaining balance!  It is not wiped away.

What if I am Not Behind on My Payments?
Short sales work - even if you've never missed a payment.

Yes, I know...short sales have gotten a stigma of being only available for people who are in foreclosure. But I have successfully negotiated dozens of short sales for people who have never missed a mortgage payment!

They just happen to be in a negative equity position and need the short sale in order to sell their home.

How Long Does it Take?

Short sale approval can take 60 days or longer. My experience has been that for the first offer on the property, it can take 6 months or more. After that the 60 day period is more accurate.

What if My Home is Already in Foreclosure?

Your foreclosure sale will usually be suspended during the short sale process. That's why it's imperative that you contact us right away!!!

Will My Lender Send Me a 1099 on the Debt Forgiven?

In 2007the U.S. Congress passed the Mortgage Debt Forgiveness Relief Act and it is in effect until 2012. As a result of that act, borrowers no longer pay taxes on the debt forgiven on their primary residence. So it the property is your primary residence, then no, you should not receive a 1099 for the debt forgiven or have to pay any taxes on forgiven debt.

For investment property, the lender does have the right to report to the IRS the amount they have "forgiven" in a Short Sale transaction, the amount of the resulting tax will be far less than the debt forgiven. For example, we had one client who did get a 1099 for $30,000. forgiven. This resulted in additional taxes of $1,300. for that year. The resulting tax is far superior to paying the difference of the debt. Also, if the property is in foreclosure would have a much more devastating effect on you than the amount of the 1099.

What Kind of Marketing Will You Do on My Property?

On our regular listings, we do employ an extensive marketing plan, however we have found that traditional marketing mediums (flyers, virtual tours, open houses, showing feedback survey, etc.)are not effective at generating offers on short sale listings.

What generates success on our short sale listings is over 90% dependent on the property's PRICE.  We typically review the pricing and make adjustments every week or so until an offer is generated.

In addition to pricing, we employ a strong internet marketing presence.

If there are very few calls or lookers, then we will need to adjust the price until we get an offer. We typically generate an offer within 30 days, unless the property is very unique or is priced above what the current market value appears to be.

Do You Think I Should Just do a Loan Modification Instead of a Short Sale?

If you desire to keep your home and can afford to make the monthly payments, then YES you should keep it! In order to qualify for a loan modification, you will need to demonstrate to the bank that you are generating more income than your current monthly expenses.

Is this the case?  If so, you will need to contact your lender and let them know you want to do a loan modification, and see if they will qualify you for their loan modification program.

If you aren't approved, we can then move forward with a short sale.  We can't work the short sale at the same time you are working with your bank on a loan modification.

Can I Lease My House to Someone While We're Waiting on the Short Sale?

We don't recommend that you lease your home while waiting on the short sale to be finalized. Lenders will not be sympathetic to sellers who are collecting rent payments and making their mortgage payment.

Also, homes with tenants are subject to legal rules (tenant rights) and much more difficult to show and to sell.

How Will You Decide on the List Price of My Home?

Initially we will set the price based on a "Total Market Overview" and analysis.  Once we have an offer we will submit that to the bank.

Once we convince the bank to agree to do a short sale on your home, they will hire their own independent appraiser who will come out and view your home, and set a valuation, based on its condition.

In order to get the process going quickly, we will need to send you our short sale package and get all of the necessary information back from you first, before one of our team members goes out to put up the sign and electronic keybox.

What Will I Need to Do to the Home to Get it Ready for Sale?

We won't be recommending that you do anything to the home that will cost you money.

The truth is, since you won;'t be netting anything from the sale, the last thing you probably want to do is spend money on a home you no longer can afford.

For that reason, we will be selling your home as-is. Our only suggestion is to clear out as much clutter as you can. Other than that you're okay.

The lender will price your home according to its condition.

Why Are You Willing to Help Home Owners Like Us When You Can't Be Sure You Will Ever Get Paid?

My team and I are committed to help people like you because I am very good at what I do first, and second it make me very upset to see what is happening to good people all across this country. It simply is not fair that through no fault of your own, you stand to lose hundreds of thousands of dollars in lost equity. I know how big of a deal buying a home is and how you feel right now.

I am motivated to help as many home owners as possible because a short sale is a very difficult transaction and many real estate agents simply are not equipped to handle a short sale transaction successfully. It is what we specialize in and guarantee we can and will help you. All you have to do now is ask for us to help you.