Knoxville Short Sale Category
Another Tip For Getting Your Knoxville Short Sale Approved
If you are selling your home, then ask the buyer to write a letter about why they want to purchase the home. If you are a buyer, then write that letter.
The listing agent will submit that letter along with the short sale paperwork. With a little luck that letter will help “grease the wheels” and cause the short sale to be approved faster.
Short Sale negotiators are human beings. They have emotions that can be touched by a good story.
These letters might sound like a joke, but they can make a huge difference. I’ve even seen home owners lose money on their sale because the liked a certain buyer over another one.
In that case, the seller sold their home for several thousand dollars less to a buyer that they liked. The other buyer had been rude and the seller didn’t like them.
If that made a difference when the seller was losing their own money, then think about the difference it will make to a short sale negotiator who isn’t losing their own money.
Put a good story in your letter. Here are a few examples.
You might say something like this: “We are a first time home buyer looking for our first home. We just want to move out of our cramped apartment and are looking forward to our first home where we can plant a garden.”
Or, maybe it would be like this: “We have looked for a while and finally found this home on Elm Street that we love. We are selling our current home so we can buy a house with a yard.
Our two boys, Tim and Julian, have been begging us for a swing set. We never had room in our old condo.
If you approve our short sale offer, then we will finally be able to give them the large, fenced backyard they’ve always wanted with a swing set.
We’ve already picked out the swing set plan and Tim and Julian are so excited about it. So, don’t approve the short sale offer for us, approve it for them.”
See how I’m pulling the negotiator’s heartstrings. Unless your short sale negotiator is absolutely heartless, it will make a difference for you. Thinking about a short sale?
I can help you short sale your property call me at 865-696-9002 or email me [email protected]
How Much Does A Knoxville Short Sale Cost Me??
“Why don’t I just let the bank have the property”, sellers tell us. “I don’t ever think I’ll be able to fix my credit to be able to buy another house.” “Plus I don’t have the money to pay a Realtor”
Short sales in Knoxville are worth the extra effort. They enable you to buy another home much faster than you would have to wait if you experience a foreclosure.
And they cost you nothing. All the costs are covered by your lender. Now, I’m sure you’re thinking, “I might have to pay my agent to sell the house. That sounds risky.”
That is a legitimate concern. Here is why the lenders are willing to pay your agent. If they foreclose on the home, they will have to hire an agent to sell it.
So why not just pay the short sale agent. Extensive studies have been done on the advantages of a short sale versus a foreclosure.
The study results showed that a lender will make more on a short sale than a foreclosure. Oftentimes the difference is huge.
I have seen some lenders lose hundreds of thousands of dollars. They turned down a short sale thinking the home would sell for more as a foreclosure.
The home ended up selling for much less. That is why lenders like short sales and are willing to pay all of the costs. Thinking about a short sale?
I can help you short sale your property and never pay the bank another penny. Send me an e-mail at [email protected] I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 865-696-9002. You have options so don’t lose your home to foreclosure.
7 Advantages Short Sale VS Just Walking Away From Your Knoxville Home
A home owner thinking of a short sale recently asked us why they should short sale versus just walking away and letting their lender foreclose on the home. We gave them the normal answer: “It’s much better for your credit.”
That was the first thing that popped into our head. But, I knew there are more benefits to a home owner than simply better credit. So I put together the entire list and here they are.
1. The upside down debt is erased in most cases. If you are selling because of a financial hardship, then the upside down debt will be automatically erased in most cases. Is your loan is owned or insured by the following agencies: Fannie Mae, Freddie Mac, FHA, and or VA? If you are short selling because of a financial hardship, their policies state that your debt will be erased.
2. You are eligible to buy another home much sooner compared to a foreclosure. The most common loan program, Fannie Mae, stipulates that you can buy another home under their program in 2 years. FHA, a popular low down payment loan program stipulates that you can qualify for an FHA loan within 3 years.
3. No Cost To You. That is right. A short sale costs you nothing. All of the expenses are paid for by your lender. That includes the title insurance, any county taxes or fees on the sale, attorney fees, and the Real Estate Agent. If the lender foreclosed on the house and then tried to sell it, they would have to pay all the costs. So why not pay the costs with a short sale?
4. Your credit suffers less damage. Most people think that a short sale will be the kiss of death to their credit. That is the one big advantage of a short sale over a foreclosure.
Upon completion of the short sale, your credit score will drop between 50 and 100 points. However it will rebound fairly quickly. The other benefit is that you will have less debt. (A lot of debt hurts your credit score.) You will have a lower debt to income ratio, which will boost your credit.
In a couple of years your credit will be back to normal and you can buy another home. In addition, anything and everything bad on your credit can be fixed thru the dispute process.
5. You can often rent a comparable house for less than your former mortgage payment. In one example, a homeowner in foreclosure found a larger home. It even had a fenced backyard for their kid and a garage. Their prior mortgage payment was $1,500. They rented the nicer, bigger house for $850 a month.
6. You avoid the humiliation of a foreclosure.
7. You don’t have to pay rent during the short sale process. A short sale can take up to 6 or 9 months. Not all of them do. But, some do. If you aren’t concerned about your credit, then you can stop making your mortgage payments during the short sale. You can use the savings for the deposit on a rental.
Thinking about a short sale? I can help you short sale your property. Send me an e-mail at [email protected]. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 865-696-9002
Deficiency Judgment Can You Avoid Them On Investment Property Short Sales?
We were contacted by a Florida resident who had 3 rental cabins. They were upside down and the rental income had dropped off and they had run out of money to continue to pay the mortgages.
They were concerned about a deficiency judgment once we sold the properties on a short sale
I do know that you can usually short sale in Tennessee and get the lender to forgive you of the debt. However, there are other things you can do to avoid the deficiency problem.
First, work hard to convince your lender to waive the deficiency. Investment Property Short Sales are tougher because the lenders are more reluctant to waive the deficiency.
But, many lenders will waive it. Others will agree to waive it when you have presented financial statements that show you cannot afford the deficiency.
So I think that over half of the deficiencies will be waived by the lenders. Here is what you can do for the remaining ones. First, depend on incompetence on the lender’s part.
Most lenders don’t have enough staff to handle their delinquent debt. Even if they do have the right to a deficiency in most cases the only thing they will do is call you.
When they call, you simply tell them that you don’t have the money in your budget that month to pay them anything. Don’t say anything more than that and don’t lie to them.
(A lie can get you in legal trouble later on. You are better saying very little and hanging up the phone than lying.)
Most lenders won’t do anymore than “sic” the debt collectors on you. They hardly ever go to court or attempt to garnish your wages.
In my opinion, this will enable you to short sale 90% to 95% of all investment properties and avoid paying a deficiency. Here is what you should do if you fall into the unlucky 5-10%.
Hire a good lawyer. They can usually find a hole in their court case and get you out of paying the debt. These lenders are so disorganized that the often do not have all their paperwork in order.
Or, they can find a situation where the lender broke Collection Law. In that case, the lender is usually more than happy to settle with you versus facing a lawsuit.
Thinking about a short sale? Send me an e-mail at [email protected] I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 865-696-9002
How To Avoid Any Surprises When Selling A Knoxville Short Sale
Many agents and buyers are scared of short sales in Knoxville. Here is something that I do to make the short sale process easier for the home seller.
Before I start negotiations with your lender, I will order a complete title search. Here is why I do that. I want to know all the costs upfront, before I give the bank a number.
If I don’t do this, then the short sale lender will approve the short sale at a certain price. We can get to the closing table and discover there are unforeseen costs.
Then we have to go back and re-negotiate with the short sale lender. This can be tough because they already have a higher number in mind.
Sometimes you have to start the short sale negotiations all over again. That can delay the short sale by 2-3 months, if not longer.
This trips up many agents and causes them to bad mouth short sales. Extra costs can show up in the form of higher than expected Homeowner’s Association Dues, Property Taxes, and other costs.
The title company will do a complete title search. They will get an estimated payoff from the Homeowner’s Association, and estimate the payoff for the taxes.
Since I take this pre-caution I have found short sales to be easy and fun. Before you hire a short sale agent, ask them about the short sale process. If they don’t mention this step, then find another short sale agent.
Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at [email protected]. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 865-696-9002
Short Sales..Why Won't My Realtor Show Them To Me?
I was contacted the other day by a frustrated buyer who was interested in buying a short sale. She had an interesting question….
Here is Tamra’s question. “I am looking to buy a home. Some of the best priced properties are short sales. However, my agent won’t show me these homes.
She keeps on telling me the prices are lower than the lender will accept and that short sale never close. What should I do? I am really interested in these homes, especially at the price they are being offered at.”
Here was my answer. Tamra, you should talk to your agent and see what they dislike about short sales. Your agent may have had a bad experience with short sales in the past.
Short sales are a great way to purchase a home at a good price. They are tougher and take a lot longer than your average real estate transaction.
However, that doesn’t mean you shouldn’t consider them. Just be cautious with your search. Make sure the agent who has the house for sale has prior short sale experience.
Your agent can ask them what short sales they have sold in the past. If they or the people working with them have a good track of working with the banks, then you should be ok.
Remember, not every short sale is going to be approved at the listing price. But, if they banks feel the price is fair, then they will accept the offer.
So go look at some of those short sales. With a little luck one of them will be the perfect home that meets exactly what you are looking for.
If you are interested in buying a short sale give me a call. They can be a very good value and as long as you understand the process it can be worth the wait. Call me at 865-696-9002 or email me [email protected]
Can You Get A Short Sale Closed In Knoxville?
Are short sales in Knoxville impossible? Well, short sales are not impossible. They just take time. Here is an example.
We were attempting a short sale on a property. The bank turned down an offer for $195,000 on the house.
Today it looks like an offer for 185k will be approved. Why is that? The first offer was submitted 4 months ago.
The bank did an appraisal. The appraiser thought the house was worth $265,000. The lender rejected the offer because it didn’t meet their guidelines.
We put the home back on the market and waited for another offer. The property values continued to decline. The next offer came in for $185,000 several months later.
The bank re-opened the short sale process and ordered a new appraisal. This appraiser thought the house was worth $197,000.
The bank approved the short sale offer. As you can see, short sales can get approved with a little luck, time, and persistence. With some luck, the bank will see that the short sale makes financial sense and approve it.
We’ve seen over 85% of our short sales sell, get approved, and close in 3-4 months. And that’s the first attempt at negotiations.
The majority of the remainder will get approved, but we will have to submit more offers.
Having trouble making your mortgage payments want to know your options? Let’s setup a time to meet and talk about your situation. You have solutions available to you other than foreclosure.
As a trained Realtor with the CDPE designation I can help you avoid foreclosure. My team and I help more homeowners than anyone else in the greater Knoxville area solve their housing crisis. We are up to date on all the different solutions and changes going on in the market place.
Our assistance to you is at no cost to you. Give me a call at 865-696-9002 or email me at [email protected]
Will I Owe Income Tax After I Sell My Knoxville Home On A Short Sale?
This is one of the first questions potential short sale sellers ask us. “I heard of something called “forgiveness of debt income and that it is taxable. How does that work?” they ask.
In most cases the answer is that a short sale will usually not cause you to owe income tax.
It used to be that you owed income tax on any forgiveness of debt.
When a lender decides to forgive all or a portion of a borrower’s debt, the forgiven amount is considered as income for the borrower and is liable to be taxed.
Here are the following ways you can qualify to short sale a property without any tax liability.
Short Sale of a Primary Residence. The Mortgage Forgiveness Debt Relief Act of 2007 (and it’s extension in the 2008 Federal Bailout) now allows you to short sale a primary residence without any tax liability.
Today when a homeowner short sales a primary residence, they can file a simple form and the forgiven debt is no longer taxable.
The amount of forgiven mortgage debt allowed to be excluded from income tax is limited to $2 million per year.
Short Sale of a Non-Primary Residence: If the property you are selling is not a primary residence, then you may be eligible for tax relief if you are considered insolvent.
I don’t know the exact guidelines, but insolvent is usually considered when your total gross debts are more than your total gross assets. I’m sure a good tax professional can give you more information.
Click here to view the IRS’s website about the Mortgage Forgiveness Debt Relief Act and Debt Cancellation.
Click here to view the article on the IRS’s Website: Mortgage Workouts Now Tax-Free for Many Homeowners.
If you are having trouble making your mortgage payments you do have options other than foreclosure that won’t cost you a dime….Contact me for a free consultation let’s setup a time to talk about your situation and we can explore your options. Call me at 865-696-9002 or email me [email protected]
GMAC Short Sale Who Really Approves My Short Sale?
We recently started working on a short sale for one of our sellers their original loan was with GMAC. Our seller wanted to know who is really going to approve the sale on his home? That is a very good question and it really depends who is truly in control of that loan.
GMAC, was the financing arm of General Motors. It was taken over by Uncle Sam and has been mostly privatized as Ally Financial.
However, many people still have loans from the original GMAC. Some of these homeowners want to short sale, but are curious about how it works.
Most of GMAC’s loans have been sold. The first thing we do is to find out who really owns the loan and who is going to be calling the shots once we have an offer on the home.
On our last GMAC short sale, the loan had been sold to a Wall Street “Sliced and Diced” Fund. In this case, that fund made the decision on whether or not to accept the short sale. GMAC was simply handling the file for them.
Another owner of loan might be Fannie Mae or Freddie Mac, both highly controlled by Uncle Sam.
Or, the loans might be owned by a private investor, but insured by VA or FHA. The guidelines to approve a short sale will be set by the owner or insurer of the loan.
For example, FHA allows a homeowner 120 days to successfully short sale their house. FHA will accept a net equal to 88% of an FHA appraisal for the first 30 days.
After 30 days, that number is reduced to 86%. After 60 days, it is reduced again to 84%. So yes, Bank of America short sales are tough.
However, if you know who the investor (or insurer) is on a loan (and their guidelines), it makes it much easier to get a short sale approved. Fannie Mae, Freddie Mac, FHA, and VA own or insure between 60% and 75% of all loans.
If you are thinking of doing a short sale, then make sure your agent understands their guidelines. Their guidelines are all a little different.
Thinking about a Knoxville short sale? I can help you we have the most experienced team in Knoxville in getting them done. And it won’t cost you a penny our services are free…Give me a call at 865-696-9002 or email me [email protected]
Discover how other Knoxville sellers successfully completed a short sale
Rent Your Home Or Sell It On A Short Sale?
I received a call from an owner who used to live in Knoxville but was transferred because of his job. He couldn’t afford to sell his home at the time because he was upside down. He couldn’t afford to carry two households either. Here was his question to
me…
“Rick when I moved from Knoxville to Nashville because of my job transferred. I couldn’t afford to sell my Knoxville home because I was upside down. But I also didn’t want to do a short sale on the home. So I decided to rent it. Well the tenants moved out and trashed the place. I could rent the house out again, but I would have to spend several thousand dollars fixing it up first. What would you recommend that I do?” Chuck asked.
Here was our recommendation. That is a tough situation. You could fix up the house and rent it out again. But, you risk having the same thing happen all over again.
Here is the other problem. The amount you can charge for rent has gone down in most areas around Knoxville. This means you will probably have to write a check every month.
If you are able to rent it and cover all the costs, then I would recommend you keep the home.
Here is why I recommend that. If you can break even, then the house will be a good investment as the Knoxville real estate market recovers. However, you will always risk large unexpected costs like the one you are experiencing right now.
If it the rent does not cover all the costs, then more than likely you are in an area where the housing prices are still dropping. This means the burden will only get bigger as time progresses.
Hire a good property manager this time instead of taking care of it yourself. They will do a complete background check on the tenants. That way you limit the chances of something like that happening again. if you need some recommendations let me know an I can refer you to some good companies who can help you out.
Renting you home is just one way to avoid foreclosure if you are upside down on your home. If you are having troubles making your mortgage payments and want to know your options call me at 865-696-9002 or email me [email protected]
