Archive for the 'Short Sales' Category
Is Your Local MLS behind the 8 Ball When Dealing with Short Sales?
July 16th, 2009 categories: For Buyers, Short Sales
Is your local MLS behind the eight(8) ball when it comes to Short Sales?
Mine is and here is why!!
According to my local MLS, all signed contract between buyer and seller must be shown as “Under Contract”.
Here is the problem. Short Sales are not your typical sales between buyer and seller.
Short Sales are contingent upon the “Approval” from a third party “The Bank”. This “Approval” can often take between 3 -4 months.
So what does this mean for the Seller. It means taking the property off the market for 3-4 months, getting fewer showings and this can affect the outcome of a Short Sale.
In my opinion I think my MLS board is behind the 8 ball when it comes to understanding how Short Sales work. In Short Sales your orginal buyer often is not your final buyer but if you take it off the market in order to comply with the board rules you are missing crucial marketing time for the property.
I wish the MLS would change the rules or modify the rules when dealing with Short Sales because as a Listing broker my fudiciary relationhip is with the Seller, not the bank. And as a Listing Broker I want the bank to approve a short sale for my seller.
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Putting the Pieces of A Puzzle together..
July 15th, 2009 categories: Loan Modification, Short Sales
Deciding what to do next about your home is like putting the pieces to a puzzle together.
Sometimes you don’t know where to start. When doing a puzzle, I always start to look for end pieces and work my into the middle.
Sometimes I get stuck and start all over. Sometimes I try to make two piece try to fit when they don’t.
Recently I heard of two separate families trying to solve the puzzle to their home problems by doing a loan modification on one corner of the puzzle and trying to fit a Short sale piece right next to it in the same puzzle.
Doing Loan Modifications and Short Sales together is like forcing two pieces in a puzzle that just won’t fit.
In the end up with an incomplete puzzle.
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Who’s on First?
July 10th, 2009 categories: Short Sales
I am reminded of the comedy routine “Who’s on First” by Abbot and Costello when dealing with the banks on Short Sales.
Today is the second time I have heard from people who say they have submitted a Short Sale package to the bank and they bank has denied ever receiving the package.
When you call the bank make sure they know “Who You Are” and “What the Purpose of the Call is about”
and “Why You are following Up with Them”.
Finally Make sure the bank is not confused as like our friends
Abbott and Costello.
| Discussion: 3 Comments »
Unable To Afford an Affordable Home?
June 9th, 2009 categories: Short Sales
Unable to Afford an Affordable Home what next? The Obama Administration and The National Association of Realtors are soon to announce new procedures and uniform process for Short Sales under its new Foreclosure Alternatives Program.
This program will work with borrowers (Homeowners) who do not qualify or meet the minimum eligibility requirements fro the Home Affordable Modification Program.
Before proceeding with Foreclosure, servicers must determine if a Short Sale is appropriate.
Incentives include a $1,000 for servicers who are successful in completing a Short Sale or Deed-in-lieu of Foreclosure. The Homeowner will also receive a $1,500.00 check as relocation expense and another $1,000 to payoff any junior liens on the property.
There will also be Standardized Documents, including Short Sale Agreement and Offer Acceptance Letters. The goal is to make things simple and help speed the Short Sale Process.
Servicers will independently order Broker Price Opinions (BPO) to determine the market value and minimum Net return to the investor.
The Short Sale Agreement will give a minimum 90 days to market and sell the home and up to 1 year in more difficult markets. If the property does not sell within this time frame then the servicer would agree to a Deed-in-Lieu of foreclosure.
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What Goes into a Broker Price Opinion (BPO)
April 22nd, 2009 categories: Bank Owned, Short Sales
The Short Sale review process begins with ordering the Broker Price Opinion (BPO).
A BPO is nothing more than comparing “Apples to Apples” (Single Family to Single Family, Condo’s to Condo’s and Multi-family to Multi-family) and coming up with a “Current Market Value” for the Subject Property.
Three (3) Sales Comp’s are required in each BPO. The bank wants these sales to be within the past 6-months to 12-months. The Sales must be within a mile radius of the subject property and if there are any sales that are sold in “As-IS” condition like other Short Sales or Foreclosures then these should be used first as a Sales Comp. The Bank wants to also know the Last List Price , the Final Sales Price, the Number of Days on the Market, and Financing such as FHA, Conventional for the buyer.
Three (3) Active Listings are required in each BPO. The bank wants Active Listings of other Short Sales and Foreclosures being sold in “As-Is” Condition. These listing should be within a 1 mile radius of the subject property. The Original List Price, Current List Price, and number of days on the market is also included.
Market Conditions are included in a BPO. The average Days on Market (DOM.), description of area as rural, suburban, or urban. Is the market declining, stable, or increasing.
Subject Marketability is describing the negative and positive features of the subject property in relation to the current market conditions.
Estimated Value is based on “As-Is” Conditions and “Repaired Conditions. Market Values will include List price and estimated Sale prices for 60-90 days and another value for 90-120 days.
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Submitting a Short Sale Package
April 22nd, 2009 categories: Short Sales
You have a complete Short Sale Package and now your ready to submit it to the Loss Mitigation Department of the Bank. While you may be happy to get this to the bank…
The Loss Mitigation Department may not be as happy as you.
Each file handler in a loss mitigation department handles about 300-500 Short Sale Files and may look like this..
Because of the number of files they receive they will do anything they can to reject a Short Sale file.
Be prepared it takes a long time to get your file reviewed.
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What is a Complete Short Sale Package?
April 15th, 2009 categories: Short Sales
A complete Short Sale Package will help you get the attention from the Loss Mitigation Department.
Often People do not understand what is to be included in a Short Sale Package. An incomplete file often gets put at the bottom of the pile.
To make sure this does not happen to you, I am putting together information on what is needed to negotiate a Short Sale with your lender.
All Short Sale Packages will only be assigned a Loss Mitigator with a complete package.
| Items | Seller | Buyer |
| Executed Sales Contract | X | X |
| Executed Short Sale Rider | X | X |
| Mortgage Commitment Letter | X | |
| Listing Agreement with Realtor | X | |
| W-2 (Two Years) | X | |
| Pay Stubs (Two Months) | X | |
| Tax Returns (Two Years) | X | |
| Financial Statement | X | |
| Hardship Letter | X | |
| Signed Authorization to Release | X |
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The Short of It.. Definition of a “short sale”
March 27th, 2009 categories: Short Sales
As a Realtor in business for over 10 years I have never experienced a real estate market like today. It really is like a roller coaster. For those of you unfamiliar with Short Sales and Foreclosures, I want to take time out to give you definitions of both.
Short Sales Defined: The term “Short Sale” is used in the real estate business to describe a situation where there is more debt owed against a property than the property is worth. In other words, the owner cannot sell the property unless the creditor (”Third Party”) agrees to accept payment that is less or (”Short”) of the amount actually owed to those Third Parties. These third parties are usually banks, mortgage issuers, or investors.
Foreclosure: The term “Foreclosure” is the legal process by which the owner’s rights to the property have been terminated because of default on their mortgage and the lender has taken back the property after the sherriff sale auction.
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