Location: Orange County
What is a Short Sale & How will it Help Me?
For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings that won't completely destroy your credit worthiness for 10 years or more.
One of those options is called a "short sale." When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.
As a real estate agent I can work with you to get your short sale approved. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. could consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid.
In California this is not the case but some aspects are changing and we keep updated on those issues. Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
We will handle it all when we list your short sale! You provide us the documentation to negotiate on your behalf with the bank just like any other real estate transaction, but we have to get the bank to agree to accepting less than what is owed to pay off your mortgage and transfer title to the new buyer.
We Call the Lender
We may need to make a half dozen phone calls before we find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, we get the name of the individual capable of making a decision and approving your "short sale".
We Submit Your Letter of Authorization
Lenders typically do not want to disclose any of your personal information without written authorization to do so. You will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
Property Address Loan Reference Number Your Name The Date Your Agent's Name & Contact Information
Preliminary Net Sheet (We submit this)
Once we recieve an offer on your home, we prepare an estimated closing statement or HUD-1 that shows the sales price you received and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. The bank will not allow any funds to go to the homeowner at close of escrow since they are taking a loss on the home but some new legislation is allowing moving costs to homeowners. These issues change daily and anything that will benefit our clients we will pursue.
Hardship Letter (We help with this & submit)
This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or your income has been reduced drastically, but lenders are not particularly empathetic to situations involving falsified statements of income or assets.
Proof of Income and Assets (We help with this)
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
Copies of Bank Statements (Usually 2 to 4 months needed)
If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
Comparative Market Analysis (We supply this)
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). We prepare a CMA for you, which will show prices of similar homes sold in your neighborhood or area including Active on the market, Pending sales & Solds from the past six months.
Purchase Agreement & Listing Agreement (we negotiate these for you)
When you reach an agreement to sell with a prospective buyer, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate & refuse to pay for certain items such as home protection plans or termite inspections which you will not be required to pay for either. The buyer may be responsible to pay for all inspections and warranties if they want them in most cases. If everything goes well, the lender will approve your short sale, and with us it's 95% of the time. With the national average at only 67% successful, our success rate speaks for itself. Please call us for an appointment to go over your specific needs!
For Information and Request a SHORT SALE CONSULTATION PLEASE CALL 949-289-9894
We handle all Orange County, San Diego, Riverside and San Bernardino Counties.
WANT TO BUY A SHORT SALE OR BANK OWNED HOME?
CALL OR Email TODAY FOR MY FREE LIST OF BANK OWNED AND SHORT SALE HOMES.
Please Leave your name, phone number, email address and City or Cities you are interested in
to ShortSale@Homes2Hearts.com
You will get your list within 24 hours and be added to our preferred list if you submit a phone and
email address with your request.
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