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Short Sale Route for Sellers 4 Grand Rapids Short Sales

Greater Grand Rapids Short Sales for Buyers and Sellers 1 Response »

Mar 262011

Exploring the Short Sale from Start to Finish. What sellers and buyers need to know:

Your home is now listed and active on the MLS. The agent has created a marketing plan and priced the home aggressively with in market value range. The offer and/or offers are coming in, you sit down with your agent and pick the offer that works the best. From there you submit the package below to start the process the bank.

Offer with all signatures
Buyer Pre Approval Letter
Copy of Buyer earnest check
Buyer signed Short Sale Disclosure
Seller Short Sale Package (already complete)
Up to date financial Information from the seller
HUD this is a form with all the numbers as related to the offer submitted

Off the file goes:

Once the lender has received all the information above they assign the file to a negociator. He or she reviews all aspects of the file. All required paperwork must be complete without errors.

Come on…You need what?

During the review process it’s not uncommon for the negociator to make request for additional information from both the seller and buyer. In most cases we’re asked to hurry up and produce the additional documents at lightning speed only to turn around and have the bank move at a snails pace. Unfortunately, it’s the nature of the business and it’s very important not to get worked up about the requests and just keep moving forward.

Broker Price Opinion or BPO:

In most instances, once all the information above has been reviewed by the negociator, they order an opinion of price. They submit the opinion to the lender. From there, typically the process from BPO is 6 weeks to 3 months of waiting while the Loss Mitigation works the file. You might wonder? What takes so long for the approval process to come? Most loss mitigators are working on hundreds, if not more, files at one time.

Hang on and why?

Often buyers become so frustrated with the wait they retreat. In most cases, if they only held on for a while longer the outcome could have been different. The benefit for the buyers to hang on is purchasing a great home at a very competitive price! It’s very important for a good buyers agent to coach their buyer clients as to exactly what they can expect in the short sale process. Buyers shouldn’t make any plans to move, and it’s very important to have a back up plan. Once the short sale approval comes the clock starts for the buyer and his or her financing. Most buyer financing is FHA, this processing can take 45 days to complete.

Next in this series:

Short Sale Approval to Closing.

Short Sale Route for Sellers 3 Grand Rapids Short Sales

Greater Grand Rapids Short Sales for Buyers and Sellers No Responses »

Feb 142011

Exploring the Short Sale from Start to Finish. What sellers and buyers need to know:

Completion of the Short Sale Package:

The agent and the seller work close to assemble the proper paper work (short sale package) these documents must be filled out truthfully and complete. If the banks receive anything that’s not complete they could ignore or move the file to the bottom of the Short Sale pile. I cannot stress enough the importance of concise and complete information when filling out the Short Sale package.

Occupying the home:

While your house is listed as a Short Sale your bank will send someone out to check the occupancy of the home. If they find the house is vacant they can Accelerate a foreclosure on the property. I suggest to remain in the home until the sale is complete.

Utilities and HOA Dues:

When selling a home via the Short Sale process it’s important keep utilities in place. It’s always better to show a home that has heat, electricity and water. The home owners responsibility is to pay all bills associated with the property. As an example, if the water bill or home owner association dues are not paid the home WILL NOT CLOSE. Banks will not pay these bills.

Deficiency Judgments, 1099s, and Short Sales:

If the lender moves forward and forecloses or allows a short sale you only have a few options, they will write off the dept or issue a 1099-C (cancellation of Dept) OR they will choose to pursue a Deficiency Judgement. It’s important the seller/s always consult their own attorney and/or accountant to review the possible ramifications of a short sale. Check out the Mortgage Forgiveness Dept Relief Act aka, HR 3648

Behind the scenes:

Your agent should set the best price to get the home sold. It’s important not to come in to high or low and attempt to hit the sweet spot with the listing price.
Contact your bank and obtain an overview of their processes, correct contact numbers ect. Complete all the paperwork, take photos and implement the marketing plan.
Receive and process all inquiries on the house. Set up showings, communicate with bank and seller all activity with listing. Review the pricing each month and implement a reduction if the home is getting no activity.

Short Sale Route for Sellers 2 Grand Rapids Short Sale

Greater Grand Rapids Short Sales for Buyers and Sellers No Responses »

Jan 132011

Exploring the Short Sale from Start to Finish. What sellers and buyers need to know:

So you’ve consulted with your lender and possibly a non-profit home counselor and decided you want to proceed with the short sale. Where do you start?

1-Meet with a certified SFR real estate agent. They can assist with all questions related to the processes of the Short Sale. Ask the agent how many Short Sale transactions they’ve processed.

2. The agent should ask questions to make sure you would qualify for a possible Short Sale on your home. These types of transactions take dedication and patience from both the sellers and real estate agents.

3. All lenders require a short sale package to be assembled that includes current financials, hardship letter, letter of authorization and W2′s to name a few. Again, your agent can assist you with this process.

4. The Letter of Authorization gives your agent permission to talk to your bank and see exactly what needs to be done to get the ball rolling. Under the HAFA program some sellers could qualify for assistance with moving expenses ect..all lenders are different, the only way to know for sure is to communicate with the bank.

5-Depending on your banks processes they could recommend you get the house listed and bring an offer first before anything else can be done or they order and estimate of value and share with the seller and agent what price they might be willing to except for the home.

Watch for my next blog. What happens next in the Short Sale Route for Sellers.

Short Sale Route for Sellers Grand Rapids Short Sale

Greater Grand Rapids Short Sales for Buyers and Sellers No Responses »

Dec 092010

Exploring the Short Sale from Start to Finish. What sellers and buyers need to know:

Considering a short sale and not sure where to start? You should speak to a non profit home counselor or a trusted real estate professional that has earned the National Association of REALTORS SFR Certification.

Look out for the following:

Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay – walk away!
Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
Never submit your mortgage payments to anyone other than your mortgage company without their approval

You would only want to consider a short sale if you know for certain you cannot afford your home and you see that foreclosure could happen if you don’t do something. It’s much better to have a short sale on your credit than a full blown foreclosure.