You have had an experince happen in your life that has led you to need to sell your home. You have realized that what you owe on the home is greater than the value of the home. Therefore you are considering doing a short sale with the bank that holds your mortgage. What can you do to successfully navigate the process?
First, is immediately contact the lender who has your mortgage and request a short sale packagae. Most lenders have a department that is set up to handle these situations when you call. Some will mail them out to you immediately, others will e-mail and some have them electronically online for you. Once you receive the package, fill it out completely.
Second, interview and hire a Realtor to handle the short sale marketing and selling of your home for you. I always recommend talking to at least THREE different people and seeing what they feel you should price the house at, how they are going to market the home and that they have dealt with short sales or are comfortable dealing with them.
Third, pricing of your home. The reason I say talk to three different Realtors is that you may get three different prices on your home. Ask what their pricing strategy is. If a Realtor is signifcantly below market value the chances are great that they are not going to do you a favor. You will get a lot of activity and an offer that will be rejected from the bank...and probably back to square one. All Realtors have different takes on pricing strategy. But, one constant is if you are starting well below market value you are hindering your chances of a successfully negotiated short sale.
Fourth, photos of your home. Just because you are selling your home through a short sale does not mean you do nto need photos of the house.With over 90% of people starting their search online photos are critical for buyers to determine if they want to even look inside of your home or not. Too many times I see short sales with one or a couple of exterior photos and nothing else. You are not doing your self justice or helping to get your home sold by not having photos of the inside of the house taken.
Fifth, make your home accessable. Do not put unrealistic limittions on showings. The more accessable your home is the greater the chance of it getting sold. By refusing showings you are turning off buyers. You may have the occassionaly buyer driving through the area with their Realtor and all of sudden wants to look at your home...if possible let them. That could be the one family that buys your house.
Sixth, make sure your home is always is showable condition. You want to ensure your home is showing at it's best during all showings. Keep the place extra tidy and clean and ensure that it is properly staged for showing at all times.
Last, the most important part of this is when you do receive an offer. Negotiate in good faith. You, NOT the bank, is signing off on the house and the deal. The banks is only deciding if the negotiated price is acceptable to them and the market value out there. And when you do receive an offer and submit it to the bank for approval, have your paperwork ready. The bank will be asking you for updated financial information once they receive the offer...The longer you delay in getting the items to them the less chance you have of the buyer waiting on the bank...Time in this case is of the essence....
These may not be all inclusive steps. However; this is a general outline of how to get your home on the market and sold through a short sale process to avoid the F word (foreclsoure).
David diCecco
Realtor/Broker
www.davedicecco.com.
Showing posts with label Short Sale. Show all posts
Showing posts with label Short Sale. Show all posts
Tuesday, March 1, 2011
Friday, February 25, 2011
Why Short Sales Do Not Close
Short Sales can and are good deals for both the buyer and the seller. The buyer gets a home at a fair deal and the seller is not subjected to a foreclosure on their credit. So, if the situation is one that is a win for both the buyer and the seller then why do so many short sales not close?
The answer is simple...Communicaton and expectation. In my dealings with short sales I have found two keys to getting the short sale offer accepted and the buyer to wait to get that final approval. The first and most simpliest answer is communication. There is nothing worse than not knowing. I rather have an answer that says do not know or have no updates to day for you rather than have nothing communicated to me. I learned early on that if you want your short sale to close you need to be proactive in communicating to the buyer's agent the status of the short sale. It does not have to be daily but at least once a week you should give some kind of communication that they can relay onto their buyer. Without that, buyers tend to waiver and are not sure if the process is moving along as it should. The listing agent can be one of the best at negotiating short sales but if they fail to communicate to the buyer's agent; they are setting themselves up for a cancelled offer.
for example,if you have an offer on a house that is a short sale; weeks go by and maybe months and you have no feedback form the listing agent as to where the offer stands or where the bank is in the process you will begin to think they do not know what they are doing. Or, you may think they are not going to accept your offer. Either way; you begin to look at other properties and maybe place an offer on a different house and rescind your offer on that one. A lot of that anxiety and frustration can be allievated with proper communication between the listing agent and the buyer's agent. A good rule of thumb is at least once a weeek to give an update or at most every two weeks depending on where you are at with the bank in the negotiation process.
The other main reason so many short sales do not end up closing is the expectations of the buyer. They are not properly briefed upfront that the process can take some time. The quickest I have seen a short sale go from start to finish is 30 days to approval. Generally it takes anywhere from 45 days and longer depending on the bank. Some banks have a great system in place that moves the process along rather quickly. Others do not. So, knwoing what bank you are dealing with and the average time frame that bank takes in processing a short sale can and will make the differnce in whether the house will close....
By telling someone you are very good at it but not relaying the bank's average time will do nothing but frustrate the buyer and the buyer's agent. In the end that frustration will lead the buyer to walk away and go to another house.
If you are selling a short sale or buying one make sure the lines of communication between the realtors is open and that the expectations of the buyer are realistic and you will both have a smooth closing that is beneficial to both of you.
Dave diCecco
Realtor/Broker
www.davedicecco.com
The answer is simple...Communicaton and expectation. In my dealings with short sales I have found two keys to getting the short sale offer accepted and the buyer to wait to get that final approval. The first and most simpliest answer is communication. There is nothing worse than not knowing. I rather have an answer that says do not know or have no updates to day for you rather than have nothing communicated to me. I learned early on that if you want your short sale to close you need to be proactive in communicating to the buyer's agent the status of the short sale. It does not have to be daily but at least once a week you should give some kind of communication that they can relay onto their buyer. Without that, buyers tend to waiver and are not sure if the process is moving along as it should. The listing agent can be one of the best at negotiating short sales but if they fail to communicate to the buyer's agent; they are setting themselves up for a cancelled offer.
for example,if you have an offer on a house that is a short sale; weeks go by and maybe months and you have no feedback form the listing agent as to where the offer stands or where the bank is in the process you will begin to think they do not know what they are doing. Or, you may think they are not going to accept your offer. Either way; you begin to look at other properties and maybe place an offer on a different house and rescind your offer on that one. A lot of that anxiety and frustration can be allievated with proper communication between the listing agent and the buyer's agent. A good rule of thumb is at least once a weeek to give an update or at most every two weeks depending on where you are at with the bank in the negotiation process.
The other main reason so many short sales do not end up closing is the expectations of the buyer. They are not properly briefed upfront that the process can take some time. The quickest I have seen a short sale go from start to finish is 30 days to approval. Generally it takes anywhere from 45 days and longer depending on the bank. Some banks have a great system in place that moves the process along rather quickly. Others do not. So, knwoing what bank you are dealing with and the average time frame that bank takes in processing a short sale can and will make the differnce in whether the house will close....
By telling someone you are very good at it but not relaying the bank's average time will do nothing but frustrate the buyer and the buyer's agent. In the end that frustration will lead the buyer to walk away and go to another house.
If you are selling a short sale or buying one make sure the lines of communication between the realtors is open and that the expectations of the buyer are realistic and you will both have a smooth closing that is beneficial to both of you.
Dave diCecco
Realtor/Broker
www.davedicecco.com
Wednesday, October 27, 2010
Short Selling Your Home? Is Your Realtor Being Interviewed?
We all know that until the market stabilizes and prioces return to pre recession levels that short sales are becoming more prevelant way to sell a house today. In lieu of foreclosure more people are trying to sell their home before that process is finished.
Well, like most Realtors the experience with short sales is a roll of the dice. Some times you have a great experince and an easy transaction. Other times it is a drawn out long process with what feels like no end in sight. It has made realtors leary of showing homes that are marketed as short sales.
So, how does a Realtor with a potential buyer overcome the negative feeligns they have for dealing with a short sale? They interview the Realtor up front. I am and have been on both ends of the transaction. I know if I have a home a client wants to look at that is a short sale I will call the realtor that has the listing and ask them a lot of questions about the process and where they are at with it. I want to know they know what they are doing and have all the paperwork done or ready to go before I show the home. Nothing is more frustrating to a buyer than telling them it will be a month or two before you hear an answer to find out the Realtor was over their head with the short sale and did not realize the time and effort that is needed to procure the transaction. Or worse yet they do not answer the phone or call you back.
On the selling end I almost always receive a phone call prior to a showing asking me the same questions about the short sale. I understand the importance of knowing what I am doing and making sure that I give correct and accurate infromation as to where in the process I am wiht the short sale. It has helped me close just about all of my short sale listings thus far.
So, if you are listing your home for sale as a short sale to avoid foreclosure make sure you interview your Realtor and that they answer the phone or return the call in a timely manner. most importantly that they know the process of the bank you are dealing with. Without that knowledge and courtsey your home may not be shown or sell...
Dave diCecco
Realtor/Broker
www.davedicecco.com
Well, like most Realtors the experience with short sales is a roll of the dice. Some times you have a great experince and an easy transaction. Other times it is a drawn out long process with what feels like no end in sight. It has made realtors leary of showing homes that are marketed as short sales.
So, how does a Realtor with a potential buyer overcome the negative feeligns they have for dealing with a short sale? They interview the Realtor up front. I am and have been on both ends of the transaction. I know if I have a home a client wants to look at that is a short sale I will call the realtor that has the listing and ask them a lot of questions about the process and where they are at with it. I want to know they know what they are doing and have all the paperwork done or ready to go before I show the home. Nothing is more frustrating to a buyer than telling them it will be a month or two before you hear an answer to find out the Realtor was over their head with the short sale and did not realize the time and effort that is needed to procure the transaction. Or worse yet they do not answer the phone or call you back.
On the selling end I almost always receive a phone call prior to a showing asking me the same questions about the short sale. I understand the importance of knowing what I am doing and making sure that I give correct and accurate infromation as to where in the process I am wiht the short sale. It has helped me close just about all of my short sale listings thus far.
So, if you are listing your home for sale as a short sale to avoid foreclosure make sure you interview your Realtor and that they answer the phone or return the call in a timely manner. most importantly that they know the process of the bank you are dealing with. Without that knowledge and courtsey your home may not be shown or sell...
Dave diCecco
Realtor/Broker
www.davedicecco.com
Thursday, October 21, 2010
Thinking Of A Short Sale On Your Home?
The talk about short sales seemed to pick up steam with the foreclosure issue arose in 23 states. More people are considering it today as an alternative to the foreclosure process. But, do you really know what you are doing when you short sale?
First, a short sale by definiton is anything than a short process. Basically you owe more on the existing home than you can sell the home for in the current market. In lieu of going through the foreclosure process you and the mortgage holder agree to accept a lesser amount of what is owed on your home.
But, are you aware of the the papewrwork and documents you need to provide to begin a short sale? A mortgage company will not even begin to accept ro entertain a short sale without a full financial disclsoure on your part. That includes paystubs, bank statements and retirement plans. Then you need to have a hardship that warrants you selling the home now. Acceptable hardships are loss of income, medical issues, job transfers just to name a few. They will not accept you on a short sale if you just do not want the house anymore becuase you owe signifcantly more than it is worth and can afford to pay each month.
The mortgage company then will begin the process of a short sale and order a BPO (Broker price opinion) on your home. This is an independent value of your home from a Realtor in the area. The mortgage company will use that value to determine a fair market value for your home in this market.
Then it is up to your Realtor, who you have contracted with to market and list your home to attract a buyer to your home. They are left with the burden of marketing a home without knowing what the mortgage comany will accept as a final dollar amount. This can be a delicate situation. In this process, chances are you are behind in the mortgage and the foreclosure process is still going forward. So, time becomes an issue. They have to price the home right from the first day.
You need to make sure your home is readily availble for showings and is in show conditon just about all the time. You do not want to take the chance of losing the one buyer for your home because you made it unavailbale for them to show.
Once a buyer has placed an offer on yoru home the mortgage company will begin the long process of verifying all the documents and negotiating the offer. You probably will have to update bank statements and records as the process moves forward and closer to a potential sale.
This process varies depending on the lender and the Realtor you are using. I have negotiated some short sales in the matters of days and weeks. I have represented buyers on a short sale that has taken weeks to months and soem we never were able to reach an agreeable terms on.... Each mortgage comany is different and each Realtor is different on how they handle them.
If you are thinking of a short sale make sure you are fully aware of what is expected from you in the process upfront...Make sure your Realtor si fully aware of the process and dealing with that particular mortgage company. The loss of a home is difficult enough without the added strain the process can bring upon you if you are not aware upfront what to expect.
Dave diCecco
Realtor/Broker
www.davedicecco.com
First, a short sale by definiton is anything than a short process. Basically you owe more on the existing home than you can sell the home for in the current market. In lieu of going through the foreclosure process you and the mortgage holder agree to accept a lesser amount of what is owed on your home.
But, are you aware of the the papewrwork and documents you need to provide to begin a short sale? A mortgage company will not even begin to accept ro entertain a short sale without a full financial disclsoure on your part. That includes paystubs, bank statements and retirement plans. Then you need to have a hardship that warrants you selling the home now. Acceptable hardships are loss of income, medical issues, job transfers just to name a few. They will not accept you on a short sale if you just do not want the house anymore becuase you owe signifcantly more than it is worth and can afford to pay each month.
The mortgage company then will begin the process of a short sale and order a BPO (Broker price opinion) on your home. This is an independent value of your home from a Realtor in the area. The mortgage company will use that value to determine a fair market value for your home in this market.
Then it is up to your Realtor, who you have contracted with to market and list your home to attract a buyer to your home. They are left with the burden of marketing a home without knowing what the mortgage comany will accept as a final dollar amount. This can be a delicate situation. In this process, chances are you are behind in the mortgage and the foreclosure process is still going forward. So, time becomes an issue. They have to price the home right from the first day.
You need to make sure your home is readily availble for showings and is in show conditon just about all the time. You do not want to take the chance of losing the one buyer for your home because you made it unavailbale for them to show.
Once a buyer has placed an offer on yoru home the mortgage company will begin the long process of verifying all the documents and negotiating the offer. You probably will have to update bank statements and records as the process moves forward and closer to a potential sale.
This process varies depending on the lender and the Realtor you are using. I have negotiated some short sales in the matters of days and weeks. I have represented buyers on a short sale that has taken weeks to months and soem we never were able to reach an agreeable terms on.... Each mortgage comany is different and each Realtor is different on how they handle them.
If you are thinking of a short sale make sure you are fully aware of what is expected from you in the process upfront...Make sure your Realtor si fully aware of the process and dealing with that particular mortgage company. The loss of a home is difficult enough without the added strain the process can bring upon you if you are not aware upfront what to expect.
Dave diCecco
Realtor/Broker
www.davedicecco.com
Tuesday, September 28, 2010
what You Need To Ask Yourself Before Buying A Short Sale
So, you are considering buying a home that is a short sale. Hopefully your agent has told you about the process and length of time it could/can take to receive an answer from the bank. But, what questions do you ask to decide if it is right for you to place an offer in on a short sale? Is a short sale right for you?
As a Realtor I try to ask ALL my buyers certain qualifying questions. One of the most important ones in deciding if you can even consider a short sale is when do you need to move? Are you relocating here to buy a home? Has your existing home gone under contract and now you are in need of a place ASAP? That could be the most important factor when considering looking at a short sale. You may find the "perfect" home for yourself but cannot wait the time period it may require to receive an answer back form the bank.
Second, are you prepared to wait for an asnwer and possibly receive a NO or a counter offer? You could wait anywhere from three to six weeks and the bank may not accept your offer. They may come back at a number that is higher than you feel the home is worth in the condition it is in. Are you prepared to wait it out and possibly start over again?
Third, and probably one of the most important questions is; has the bank APPROVED the seller for a short sale? This may sound like a stupid question if the home is marketed as one. But do NOT take it for granted. Just because a home is marked as a short sale does not mean the bank will approve it. There has to be a legitimate hardship and finacial suffering on the seller to approve a short sale. You could be wasting a lot of time on a transaction that may never unfold.
Fourth, and probably most important if you negotaite a deal on short sale. Are you prepared to accept the home in the present condition it is in? Unlike bank foreclsoures where the home is empty; chances are the home is being lived in while you are negotaiting the short sale. You may not notice the stains in the carpet or the holes in the wall until after. Also, any repairs that need to be done on the home are completely up to you. The seller probably does not have the moeny nor is willing to do the necessary repairs to the home once you agree to a price.
Fifth, what type of financing are you getting? if you are receivng a VA or a USDA loan the lender may require certain repairs to be done to the home to approve the loan. Knowing that the home is being sold in "as is" condition will it pass the necessary inspections for you to buy the house? If the seller is not willing to do the reparis are you willing to get the repairs done prior to closing? Can you afford to do the reparis?
These are only five of many questions you can ask if considering purchasing a short sale. But this is a foundation for which depending on your answers to these questions will help you decide if looking at a short sale is right for you.
Dave diCecco
Realtor/Broker
www.davedicecco.com
As a Realtor I try to ask ALL my buyers certain qualifying questions. One of the most important ones in deciding if you can even consider a short sale is when do you need to move? Are you relocating here to buy a home? Has your existing home gone under contract and now you are in need of a place ASAP? That could be the most important factor when considering looking at a short sale. You may find the "perfect" home for yourself but cannot wait the time period it may require to receive an answer back form the bank.
Second, are you prepared to wait for an asnwer and possibly receive a NO or a counter offer? You could wait anywhere from three to six weeks and the bank may not accept your offer. They may come back at a number that is higher than you feel the home is worth in the condition it is in. Are you prepared to wait it out and possibly start over again?
Third, and probably one of the most important questions is; has the bank APPROVED the seller for a short sale? This may sound like a stupid question if the home is marketed as one. But do NOT take it for granted. Just because a home is marked as a short sale does not mean the bank will approve it. There has to be a legitimate hardship and finacial suffering on the seller to approve a short sale. You could be wasting a lot of time on a transaction that may never unfold.
Fourth, and probably most important if you negotaite a deal on short sale. Are you prepared to accept the home in the present condition it is in? Unlike bank foreclsoures where the home is empty; chances are the home is being lived in while you are negotaiting the short sale. You may not notice the stains in the carpet or the holes in the wall until after. Also, any repairs that need to be done on the home are completely up to you. The seller probably does not have the moeny nor is willing to do the necessary repairs to the home once you agree to a price.
Fifth, what type of financing are you getting? if you are receivng a VA or a USDA loan the lender may require certain repairs to be done to the home to approve the loan. Knowing that the home is being sold in "as is" condition will it pass the necessary inspections for you to buy the house? If the seller is not willing to do the reparis are you willing to get the repairs done prior to closing? Can you afford to do the reparis?
These are only five of many questions you can ask if considering purchasing a short sale. But this is a foundation for which depending on your answers to these questions will help you decide if looking at a short sale is right for you.
Dave diCecco
Realtor/Broker
www.davedicecco.com
Thursday, February 25, 2010
First Time Buying...Should I look at a Short Sale?
It all depends.... With the tax credit for first time buyers due to expire soon the question looms; Is a Short Sale worth the look? One thing you need to ask yourself is can I wait? Unfortunately right now with the influx of short sales on the market with the economy struggling to get out of a recession and home values plummeting to historic lows in comparison to a few years ago banks are over run with short sales.
I read an article recently that stated Mecklenburg County is the largest area in North Carolina for foreclosures pending. That means record levels of people are attempting to sell their home via a short sale to avoid foreclosure. Typically, with a short sale your response time can be anywhere from three weeks to months depending on the bank. Some banks will work with you and counter your offer. Other banks will just say no. Then if you want to increase your offer you are going through the process all over again. I have dealt with both buyers and sellers on Short Sales. I have had some great luck with them and some horrific luck right now. I was blessed on one of my listings that the bank ordered a BPO(Broker Price Opinion) upfront and when an offer came in i was able to have an answer back within forty eight hours and within five days had the deal negotiated and approved by the bank. On the other end, I have a buyer who has an offer in on a home in Charlotte right now that we are still waiting for the bank to respond....it has been 5 MONTHS. If you are looking to take advantage of the tax credit and need to be under contract by April 30, 2010 have your agent check with the listing agent before you put in an offer to see where in the process they are and who the bank is. Generally speaking, most agents should know based on the bank what the response time should be on average.
Are there deals to be found out there right now...definitely. I know in the Charlotte area buyers are having a lot of choices and good deals are found in just about every price range. I just warn my buyers up front. if you are looking at a short sale and thinking of putting an offer in; here are the possible ramifications of waiting. I give them the information and let them decide what is best suited for their needs.
Now it does not mean that if I put an offer in on a short sale I cannot stop looking. I advise my clients to continue to look at properties just in case. you just never know what might come on the market in that time frame as well. I will continue to send listings to them that meet the criteria they desire and show homes to them that they want to look at while we wait for an answer. The potential of losing the $8000.00 tax credit is large. I always advise my clients to have a plan B in place just in case.
Also, while you are waiting for a response back from the bank another offer may come in. The other offer could be better than yours or worse. The bank may negotiate with both of you or just one of you. Unfortunately, until the bank accepts your offer or negotiates a deal that you both accept anything can happen. Just because you are the first offer does not mean you ahve first right to the home. too many times when I explain this to first time buyers in the Charlotte area they have a stunned look. They never realize that they could have an offer pending with a bank for weeks or months and someone else can come in at the last moment and put a better offer in and they are out.
As we get closer to the deadline to be under contract, that window of waiting becomes smaller. As of the writing of this post you have only 65 days to be under contract on a home to qualify for the tax credit. You do not have to close to July 1, 2010 but need to be in agreement on the purchase of a home by April 30, 2010. So, do your due diligence and consider the short sale but make sure you know how long you may be waiting for a response back from the bank.
Dave diCecco
Realtor/Agent
www.davedicecco.com
I read an article recently that stated Mecklenburg County is the largest area in North Carolina for foreclosures pending. That means record levels of people are attempting to sell their home via a short sale to avoid foreclosure. Typically, with a short sale your response time can be anywhere from three weeks to months depending on the bank. Some banks will work with you and counter your offer. Other banks will just say no. Then if you want to increase your offer you are going through the process all over again. I have dealt with both buyers and sellers on Short Sales. I have had some great luck with them and some horrific luck right now. I was blessed on one of my listings that the bank ordered a BPO(Broker Price Opinion) upfront and when an offer came in i was able to have an answer back within forty eight hours and within five days had the deal negotiated and approved by the bank. On the other end, I have a buyer who has an offer in on a home in Charlotte right now that we are still waiting for the bank to respond....it has been 5 MONTHS. If you are looking to take advantage of the tax credit and need to be under contract by April 30, 2010 have your agent check with the listing agent before you put in an offer to see where in the process they are and who the bank is. Generally speaking, most agents should know based on the bank what the response time should be on average.
Are there deals to be found out there right now...definitely. I know in the Charlotte area buyers are having a lot of choices and good deals are found in just about every price range. I just warn my buyers up front. if you are looking at a short sale and thinking of putting an offer in; here are the possible ramifications of waiting. I give them the information and let them decide what is best suited for their needs.
Now it does not mean that if I put an offer in on a short sale I cannot stop looking. I advise my clients to continue to look at properties just in case. you just never know what might come on the market in that time frame as well. I will continue to send listings to them that meet the criteria they desire and show homes to them that they want to look at while we wait for an answer. The potential of losing the $8000.00 tax credit is large. I always advise my clients to have a plan B in place just in case.
Also, while you are waiting for a response back from the bank another offer may come in. The other offer could be better than yours or worse. The bank may negotiate with both of you or just one of you. Unfortunately, until the bank accepts your offer or negotiates a deal that you both accept anything can happen. Just because you are the first offer does not mean you ahve first right to the home. too many times when I explain this to first time buyers in the Charlotte area they have a stunned look. They never realize that they could have an offer pending with a bank for weeks or months and someone else can come in at the last moment and put a better offer in and they are out.
As we get closer to the deadline to be under contract, that window of waiting becomes smaller. As of the writing of this post you have only 65 days to be under contract on a home to qualify for the tax credit. You do not have to close to July 1, 2010 but need to be in agreement on the purchase of a home by April 30, 2010. So, do your due diligence and consider the short sale but make sure you know how long you may be waiting for a response back from the bank.
Dave diCecco
Realtor/Agent
www.davedicecco.com
Tuesday, February 9, 2010
Short Sale? Is it Worth it?
As a Real Estate Agent in today's economy I get this question asked a lot of me. My answer is always the same .....it depends. Can you make the mortgage payments on your home? Are you on time? Do you owe more than the home is worth? If you do not short sale are you going to lose your home to foreclosure? If you cannot make the payments on time anymore and you owe more than the home is worth and you are trying to stay off foreclosure then I say short sale may be for you.
The problem I run into today is the amount of mis-information out there regarding short sale and the possible ramifications that can come out of it. I talked with a young family the other night who had advice from several different family memebers and friends who are not in the business...and guess what; ALL of the information was wrong.
I have some general rules of thumb I follow whenever I am seriously discussing listing a home for a short sale. First, and foremost is "Can you make the monthly mortgage payments on time without not paying anyone else?" If they answer yes then i tell them you are not a candidate for a short sale. A lot of people are under the impression that just because they owe more than their home is worth they can short sale and are relieved of their financial obligations to the home. That is so untrue in many levels. You need to show the bank you have a hardship and in addition you must produce bank statements and pay stubs to substantiate your hardship.
If there is a legitimate hardship I will then proceed to find out what they owe and what the market value of the home is. I have run across some potential sellers saying that they have to short sale when in actuality they can sell the home and break even or even make a little money on it. Why? because as we all know you can sell the home for less than market value and sell it a lot faster...But are we doing our clients justice by not telling them the options?
Last I ask them if they have consulted with an attorney and a tax accountant yet. If not I give them a list of three that will speak to them at NO CHARGE and explain the legal and possible tax ramifications to a short sale.
Once the client has done all of that i will then agree to take the listing and help market the home and get it sold for them. Now, a lot of agents are saying that is a lot of work. However; we have a ethical obligation to serve the best interests of our clients.... And I personally plan on serving them for life.
The problem I run into today is the amount of mis-information out there regarding short sale and the possible ramifications that can come out of it. I talked with a young family the other night who had advice from several different family memebers and friends who are not in the business...and guess what; ALL of the information was wrong.
I have some general rules of thumb I follow whenever I am seriously discussing listing a home for a short sale. First, and foremost is "Can you make the monthly mortgage payments on time without not paying anyone else?" If they answer yes then i tell them you are not a candidate for a short sale. A lot of people are under the impression that just because they owe more than their home is worth they can short sale and are relieved of their financial obligations to the home. That is so untrue in many levels. You need to show the bank you have a hardship and in addition you must produce bank statements and pay stubs to substantiate your hardship.
If there is a legitimate hardship I will then proceed to find out what they owe and what the market value of the home is. I have run across some potential sellers saying that they have to short sale when in actuality they can sell the home and break even or even make a little money on it. Why? because as we all know you can sell the home for less than market value and sell it a lot faster...But are we doing our clients justice by not telling them the options?
Last I ask them if they have consulted with an attorney and a tax accountant yet. If not I give them a list of three that will speak to them at NO CHARGE and explain the legal and possible tax ramifications to a short sale.
Once the client has done all of that i will then agree to take the listing and help market the home and get it sold for them. Now, a lot of agents are saying that is a lot of work. However; we have a ethical obligation to serve the best interests of our clients.... And I personally plan on serving them for life.
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