Great Advise about Short Sales!!
This can be a dificult and confusing time for those caught up in the mortgage uncertainties of today's Real Estate Market. Ad to that confusion, the possible mistrust of the original loan officer and agent that recommended the current problem and a body probably feels pretty much alone.( not to mention the attitude of the banker).
With that in mind, I found an article that may be of help. It certainly answered some questions I had, hope it does the same for you. The article is written by Lynn Pineda a Realtor from Coral Gables Florida. Lynn has a special focus on foreclosures and short sales. Here is the article, thanks Lynn.
Selling a home as a short sale can allow a homeowner to escape Foreclosure and to get on with their life in hopes of rebuilding their life and their credit.
- Sellers need to have a proven hardship and they themselves need to be able to put it in writing haven been written to have a dramatic effect on the person reading the letter and it must be true. The sellers hardship will need to be backed up by documentation of hardship plus financial statements provided such as tax returns and bank statements, etc. If the seller simply wants to move because he/she made a bad investment and they can no longer afford to pay for their home AND toys, fancy lifestyle and the like is not a hardship.
- Sellers need to compile a great deal of documents to have available for their Realtor to make a compelling short sale case. Missing bank statements, tax returns, notarized letter of authorization and others items not provided will not get the short sale approved. Realtors must have all this and more in order to assemble into a standout package to be forwarded to the lender for consideration.
- Sellers do not have to make any needed repairs to the home. Many sellers may shy away from selling their home as a short sale because they haven't had the money available to get their home in "selling" shape. This is not the case with a short sale and the Seller is not responsible at any time to make any repairs when a buyer submits an offer.
- Sellers are not directly responsible for the paying of commissions. The Realtors commission will come from the approved amount that the lender has authorized.
- Sellers must communicate all that is known of their property. For example, if they know of any liens placed on their property communicate it immediately to your Realtor. The more accurate information obtained and the quicker will aide in a successful short sale. Of course this will be found out with a title search but being upfront is all the better.
- Sellers do not have to be concerned with holding out for the price that they think their home should sell for as is common in a regular home sale. It's imperative that the sellers home be priced at or below fair market value. Sellers cannot have any emotional pricing attachment to their home at this time. The goal is that the home MUST SELL NOW and timing is everything. Short sale sellers to not have the luxury of time.
- Sellers can expect to get buyers for their home that have been APPROVED to buy their home. Buyers must have proof of funding for the lender to consider their offer which can take approximately 30-45 days and quite often longer. After the approval has been given by the bank, the buyer of the property must be able to close typically within 30 days.
- Sellers will know that all parties involved in the buying of their home will know of the criteria and process of a short sale and will sign along with all other parties acknowledging their understanding of the short sale process.
- Sellers need to be aware of the Mortgage Forgiveness Debt Relief Act of 2007 whereby the US House just yesterday, Sept 27th 2007 passed a bill that foreclosed homeowners will not have to pay income tax on debt forgiven by their lender. As it is now, homeowners who lose their home and have forgiven debt by a lender may be subject to this as taxable income. If the bill passes, this debt would be excluded from taxation on or after Jan 1st, 2007. As with any tax issue, the sellers need to discuss with a qualified CPA.
- Sellers should expect to have a Realtor represent them that is knowledgeable in short sales and who is genuinely interested in the sellers best interest.
- Sellers should expect to be able to get on with rebuilding their lives for better days ahead.
Should you have additional questions and/or concerns please, visit my website at www.MyShortSaleHome.com. I help homeowners in Coral Springs Florida Broward County and surrounding towns.
Corie again, I hope this has been helpful, and that you don't need to go any further. In the event you do however, give me a call at 801-567-0946