Selling a Short Sale home is an investment in time, money and patience. Simply stated, a short sale home occurs when the present owner’s mortgage company (the lender) has agreed to accept a pay-off that is less than is owed on the mortgage. The Lender will agree to do this because foreclosure will cost the Lender up to $50,000 in legal fees and the result of the foreclosure is that the Lender now owns the property – which is not what the lenders want. Once the Lender owns the property they have on-going maintenance fees of approximately 1% of the original mortgage amount. Consequently, the Lender will agree (reluctantly) to a short sale. If you are an owner considering a short sale, get advice from a realtor experienced in working with the lenders to negotiate a short sale at the most favorable price for the owner/seller. In today’s market it is not unreasonable to expect the lender to accept a payoff of 75% of the total mortgage amount. This can be negotiated lower based on the state of the market in a specific community, the number of foreclosures/short ales in the community and the condition of the property itself. As experienced short sale negotiators, we know what information is required by the Lender, how to package that information and how to deal with the lender to secure the best possible result for the owner/seller. For more information regarding your own property send us a note at TampaBayHomes1@Yahoo.com or visit our website.
May 13, 2009
April 5, 2009
Another day in paradise: Selling
If you need to do a Short Sale there are some basic steps. First, contact your lender and get the address/Fax number of the Short Sale or Workout or Loss Mitigation Department. Be ready to send in your documentation which will include: a hardship letter – why you have to sell; your last two pay stubs (for everyone on the mortgage); your last two month’s bank statements, your last two Tax Returns; a worksheet showing your monthly income and expenditures and finally a letter authorizing the Lender to speak to your Realtor.
With all that done, have your Realtor do a pricing analysis and follow your Realtor’s recommendations and list the property. Your lender will NOT do anything on a short sale until your Realtor can submit an offer to purchase the property. Most lenders have developed a process for handling short sales and they have a set of steps and a timeline for evaluating the offer which includes sending out their own agent to do a BPO (Broker’s Price Opinion). It is important that your own Realtor know how to do a BPO because that is the same process they should use in pricing your home originally. Your Realtor should be able to defend the pricing with the Lender’s short sale specialist. For more help and information about short sales you can write to tampabayhomes1@yahoo.com or call 813.996.2441. We are short sale specialists.
August 21, 2008
Selling Your Home: Short Sales
First, you should get in touch with your lender and see if they will let you renegotiate your loan. Do not wait until you have missed payments or are in a pre-foreclosure state. Ahead of the problem. Each Lender is different so it is impossible to predict if they will allow a renegotiation.
Second, if you are already in the foreclosure process and you wish to try for a short sale (which is where the Lender agrees to take less than is owed for the property) please know that Lenders will not discuss a short sale unless there is a formal, written Sale & Purchase Contract for the property.
With an offer on the table, your Realtor should be prepared to negotiate with the Lender’s Loss Mitigation Department. For your Realtor to represent you, you must send a FAX authorizing the lender to speak with your Realtor on your behalf. In your Fax of authorization you will need to have all parties to the mortgage sign the FAX, you will need to have the Loan Number and the last four digits of all social security numbers and you should identify your realtor by name, by Brokerage as well as your realtor’s contact information.
With this authorization (and the Sales & Purchase Contract) your Realtor will be able to begin negotiations. You should send to the Lenders Loss Mitigation Department the following information:
A hardship letter explaining why you are not able to make your mortgage payments.
Copies of your last two months pay stubs
Copies of your last two years Income Tax.
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With this information sent in, your Realtor can begin serious negotiations with the Lender on your behalf. Other information to keep in mind:
The Lender will not allow you, the seller, to realize any money from the sale whatsoever.
Ask the Lender to give you confirmation that you have satisfied the mortgage.
Be aware, many Lenders will ask you to sign a note for repayment of the difference between the sale price and the mortgage. They will, in some cases, allow you to pay this off over ten years, interest free.
It is better for you if you can receive a satisfaction of the debt without having to agree to a payment plan.
Critical to you successfully concluding a short sale is to have an experienced Realtor who has the expertise and knowledge to work with your Lender’s Loss Mitigation Department. Your Realtor will do a Brokers Price Opinion (BPO) as the basis for negotiating with the short sale price.
