Cecelia Bogart
Short Sales & Foreclosure Specialist
SHORT SALES
Are you being forced to sell your home?
Is your adjustable rate mortgage adjusting?
Do you have little or no equity?
Did you lose your job?
A SHORT SALE MAY BE YOUR ANSWER.
If you bought or refinanced your home in the past few years chances are you have little or no equity. With the slow economy and adjustable rate mortgages adjusting chances are you might be forced to sell. A short sale may be the answer to your problem.
What is a short sale?
A short sale is when a seller owes close to or more than the property is worth. In these situations, lenders are sometimes willing to accept less than the full amount of the loan, commonly referred to a "short pay" or "short sale."
Why does a bank agree to a short sale?
From the lender's perspective, a short sale saves many of the costs associated with the foreclosure process - attorney fees, the eviction process, delays from borrower bankruptcy, damage to the property, costs associated with resale, etc. In a short sale scenario, the lender gets the property back faster, so it is able to cut its losses. As your short sale expert it is my job is to convince the lender that it will fare better by accepting less money now.
How does a short sale work?
The lender will want some information about the property, the borrower and the deal he has made with you. I work with you to provide that information. Initially you authorize me to contact your lender(s). The lender will want to know what the real estate is worth. The lender may hire a local real estate broker or appraiser to evaluate the property (called a brokers price opinion or BPO). We will also submit a BPO, or your own appraisal, which I work with you to prepare. Also, include some relevant information about the area and the local economy and market. We will advise the bank about any and all repairs needed to the home. We can submit contract's bids for repair estimates if needed!
Can I do a short sale myself?
Negotiating a short sale with the lender is a difficult process, generally because it is a daunting task finding a bank officer who has the authority to accept a discount. As an experienced real estate agent for short sales I can save you valuable time in the short sale process.
What information does the bank need from me?
The lender will ask for financial information about the borrower. It will be like preparing a reverse loan application, the borrower must prove that they do not have funds and is unable to afford the payments. The borrower must show that they have no other source of income or assets to repay the loan. This process may involve as much, if not more paperwork than an original mortgage application! This information is only good for a limited time and must be resubmitted and updated throughout the process if an offer is not received in that time period. The borrower should submit a hardship letter, which is basically a summation about how much financial trouble the borrower is in. This may require some help on your part which I will guide you. You must be accurate and truthful, but should explain how you reached this point financially. Remember a person will be reading your letter so appeal to their emotions.
Finally, the lender generally wants to see a written contract between you and the seller. The lender wants to make sure the seller isn't walking away with any cash from the deal. Generally, the contract must be written so that the buyer pays all costs associated with the transaction, so that the "net cash" to the seller is the exact amount of the short pay to the lender. A preliminary HUD-1 settlement statement is often requested, which can be difficult, since many title and escrow companies simply won't prepare one in advance of closing. As an experienced short sale agent, I will assist with title companies to have them prepare this document.
What else can I expect to happen in a short sale?
If you are a buyer, don't be surprised if your first short sale bid is rejected. Lenders aren't emotionally attached to their properties, so they aren't as likely to give you a deal. Many short sales fall through if the BPO comes in too high. If the property isn't in need of serious repair, it is unlikely we can convince the lender the property is worth much less than the appraised value. The lender also has guidelines on how much they are willing to accept based on the current market value. As an experienced short sales agent, I know a bank's threshold and I help you negotiate an offer that the bank will accept. Remember a short sale approval can take months and you may not get a second chance. Don't put your financial future at risk!
The short sale process is not that complicated, but the success or failure of the deal depends upon how we present it to the lender. As an experienced and certified Short Sale & Foreclosure Agent, I work with Sellers & Buyers of Short Sales & Foreclosures from the beginning steps of the process through the final closing and beyond!
Please contact me anytime if you are in need of a knowledgeable and professional Short Sales Expert!
|
