Knoxville Short Sale Category
Knoxville Short Sales What Does I Mean When The Bank Says File Is Going To Investor Soon?
“One of our sellers we were doing a short sale in Knoxville asked us, what does it mean our short sale has been submitted to the investor?”
Here is the answer. It means that whoever ultimately owns the loan will make the decision. For example, you might be negotiating the short sale with Wells Fargo.
However Wells Fargo may not own the loan. (Around 80% of all the loans they service are owned by someone else.) Wells Fargo will take all of the short sale documentation and send it to the actual loan owner.
(The actual loan owner could be anyone from Fannie Mae, Freddie Mac, Goldman Sachs, a Pension Fund, or another Wall Street Entity.)
That loan owner will review the short sale file themselves. Then, they will either approve the short sale or deny it. If they deny it, then they will usually let you know why.
Then you can find out the reason they denied the short sale and re-apply. Often they want more money for the house, a missing document, of some other item.
It is a popular misconception that banks own all the loans they handle. Little do most people know that most loans have been sold to a third party.
Many experts agree that this was actually a good thing because it spread the losses across a lot of different people in the economy.
If all the losses has been with 3-4 large banks, then those banks would have experienced crippling losses. Thinking about a Knoxville short sale?
I can help you short sale your property all me for a free consultation. You have options other that foreclosure. Don’t trust your situation
to an untrained professional it takes a great deal of skill to get a short sale accepted. We have the most experienced team in the Knoxville area so call me at 865-696-9002 or email me at [email protected].
How Does A Knoxville Short Sale Or Foreclosure Affected My Credit Score?
How do foreclosures, or short sales affect a credit score? Your credit score will be affected by late mortgage payments and a short sale.
However, there are 2 things that are considered horrible on your credit report. Those 2 are items are foreclosure and bankruptcy.
A foreclosure or bankruptcy will almost immediately lower a credit score by around 100 to 120 points. (The number is not hard and fast – it all depends upon what the score was before the foreclosure, and other factors that the credit bureaus don’t like to share.)
The way that they write the algorithm, a foreclosure will keep on pushing your score down for the next 2 years! A foreclosure can also stay on a credit report for 7 years.
Short sales are different from a foreclosure. Short sales by themselves do not hurt a credit score (depending on how they are reported.) It is the missed payments that ding your credit report.
How a short sale is coded/reported to the credit reporting bureau does make a difference in the affect it has on your score. It could be reported as a charge-off, a 120 day late payment, or a settled account.
Any of these are dings on the credit report, averaging 100 points. Here is the good news. The way they do the algorithm, it will damage your score for a shorter length of time than the 2 years a foreclosure does.
How a short sale is reported to the credit bureaus is something that can be negotiated as part of the process of the sales negotiations. Good negotiators can have a positive impact here.
But, in the end, the credit score should not be the first thing to consider when facing the decision to short sale a home.
You need to look at what is best for your family financially. The credit score is secondary to that.
Get advice from a trusted source, and then make an informed decision. Need help in making an informed decision give me a call at 865-696-9002 or email me [email protected]
Knoxville Short Sales: A Little Known Fact About Short Sale Negotiators
You see, we’ve spent the last few years figuring out all the guidelines for Knoxville short sales. If the loan being shorted is an FHA Loan, VA Loan, Fannie Mae Loan, or Freddie Mac Loan, then the guidelines for the short sale are different.
In this case, the loan being shorted was an FHA loan. Here’s what happened.
FHA puts out a letter called “Mortgagee Letter 2008-43.” It details exactly how the lender handling a short sale on FHA’s behalf is supposed to negotiate on a short sale.
This letter is 16 pages long and gives them specific directions on how much to pay agents, what percentage of the appraisal they can accept, etc. (If you’re doing an FHA short sale, then Google “Mortgage Letter 2008-43.”)
Because of a prior horrible experience on another FHA short sale, we had studied up on the FHA short sale guidelines. Bottom line, we know a little bit about FHA’s rules for short sales.
The problem was that this short sale negotiator didn’t want to follow the rules! Instead she made up her own rules!
She told me that they wouldn’t pay any of the buyers closing cost. But the FHA guidelines for a short sale say that up to 1% of the purchase price can be paid for closing cost.
This short sale negotiator wouldn’t budge. We had to argue back and forth with her for 2-3 days until she finally relented.
It is pretty frustrating when a large bank won’t follow the specific short sale guidelines laid out by the owner of the loan. If the loan owner gives you specific instructions on how to negotiate a short sale, then follow those instructions!
Before you hire a short sale agent, make sure they understand the guidelines for your type of loan. That way, when a short sale negotiator tries to break the rules, they can keep them in line.
You do have options as a Knoxville homeowner who may be facing foreclosure. Don’t let your home go to foreclosure call me at 865-675-8326 or email me [email protected] let’s setup a time to talk about your situation and talk about your options. I’m here to help you as a trained Realtor with the CDPE designation I can help you…
Also Read
7 Steps To A Successful Knoxville Short Sale
Knoxville Short Sales Why Do Lenders Accept Them Instead Of Foreclosing?
People often wonder why their lender will release their debt in a Knoxville short sale. Most lenders don’t like to release the debt. But, they agree to do it because they know that policy nets them more money.
They net more because a home usually sells for more money as a short sale versus after it has been foreclosed upon.
Most short sales are being sold while the homeowner lives in the home. The homeowners are able to keep the house up. They keep the inside clean and neat. In addition, they mow the lawn and keep up on the yard.
This makes a big difference in the sales price. Would you rather buy a home that is in great condition or one that needs work?
Once the bank forecloses on the home it then is taken back and goes into the REO department. It could take 4-6 months before that home comes back on the market. In the meantime the home is vacant and sitting there with no one taking care of it. No one is there to keep up on the yard.The inside of the home is probably dirty. Vagrants can break into the home. The home is also an easy target for vandalism.
Therefore a short sale is going to close quicker and I have found going to sell for alot more money than an REO. Everyone wins with a short sale, the banks gets more money for it, seller avoids foreclosure and the neighbors don’t have a home sitting there vacant for months.
If you are having trouble making you mortgage payments you do have options other than foreclosure. It takes and experienced agent to help explain all your options to you. Don’t trust your financial future to an inexperienced agent. Call me and let’s talk about your situation at 865-696-9002 or email me [email protected] my services to you are free and will cost you nothing.
Is A HUD 1 Important In A Knoxville Short Sale?
Here is something that drives inexperienced Knoxville short sale agents crazy. It is a HUD-1, also called a HUD. HUD is the Federal Agency, the Department of Housing & Urban Development, also called HUD.
A HUD-1 is a document regulated by HUD. It is the financial accounting for a real estate sale. Here is why it is important to a Knoxville short sale.
Before a short sale lender will accept a short sale, they want to know what they will net from the sale. A HUD-1 breaks down all the projected closing costs so the lender can see their net.
Most agents are familiar with a HUD-1. They see them at the closing of every home they sell. But, seeing a HUD-1 at a closing is not the same as the familiarity you learn on short sales.
See, if you mess up on that HUD-1, then it puts the short sale transaction in jeopardy. The short sale lender will look at a projected HUD-1 and agree to accept a certain number.
If unexpected costs get added to the HUD-1, then that net goes down. (There are always unexpected costs on a short sale. I can tell you from personal experience.) Now, the agent has to go back and re-negotiate with the short sale lender. That can drag out the process another 60-90 days.
The buyer will usually get frustrated and cancel the contract. Then, the agent has to re-sell the house and start the process all over again.
This is what causes many agents to hate short sales. They didn’t take the HUD-1 seriously and had problems on a short sale. As a result, they think all short sales are impossible.
To truly be successful at short sales, the agent must understand HUD-1s inside and out. They need to make sure that every single projected expense is added to the HUD-1 at the beginning of the negotiations.
Adding them after you have negotiated isn’t going to work.
If you are having trouble making your mortgage payments and don’t want to lose you home to foreclosure call me at 865-696-9002 or email me [email protected]. You do have options and my services to you are free.
Knoxville Short Sales: What is a BPO and why does it matter on a short sale?
Some agents in Knoxville hate short sales. Why? Because they don’t understand them. So, don’t believe them when they tell you that short sales are impossible.
I will explain what causes their problems in today’s post.
There are two things you must understand if you are doing short sales. They are BPOs and HUD-1s. A BPO is what the short sale lender uses to determine the value of the property.
BPO stands for “Broker’s Price Opinion.” They are what another real estate agent (Broker) thinks a property is worth.
Basically the agent gives their opinion of the value of the property. “I think it is worth 300k”, they put on the report. Lenders accept or reject short sale offers based on the BPO value.
If the agent has given a value of 300k, then a short sale lender will not accept a sales price of 250k. The problem is that, in my opinion, sometimes the values are inaccurate.
I have seen agents drive 50 miles away to evaluate a property. They go to a place where they do not sell real estate. As a result they are not familiar with the local marketplace.
Because of this I always try to meet the agent doing the BPO at the property. I explain the market value to them and tell them what is happening with the property.
I explain exactly why the property is selling for the sale price. I tell them what buyers have said about the property and why it isn’t selling for a higher price. This helps them to give an accurate value.
The lender gets an accurate value and is able to make a better decision on the short sale. Thinking about a Knoxville short sale?
Call me and let’s talk about your options to avoid foreclosure my services to you are free. You can reach me at 865-696-9002 or email me [email protected]
Knoxville Short Sales: What can go bad on a short sale when you hire an agent that doesn’t understand short sales
It always amazes me when I hear the stories of agents who talk about horrible short sales are. “Don’t waste your time on a short sale”, they tell homeowners.
“They are a waste of time. The lenders won’t approve them and the process is horrible. The last short sale I worked on took 9 months”, they say.
This gives short sales a bad name. Homeowners mistakenly believe that a short sale is impossible. I am here to tell you that is not true.
The Stop Foreclosure Institute has sold and closed many short sales. There are two keys to being successful. First, you have to understand how the process works. Second, you have to keep an eye on the transaction from start to finish.
Here is the closest comparison I can think of on why some agents hate short sales. Let’s say that you are a brand new driver.
You hop into a car, accelerate to 70 miles per hours, turn on cruise control, and then start reading a book. Every 5 minutes or so you look up to check on what is going on with your car.
You aren’t successful at driving a car. Your friend is thinking about learning how to drive. “Don’t even think about driving a car. Driving just doesn’t work and it is impossible to get anywhere”, you tell them.
Is what you just said correct? Is driving a car impossible? No, it’s not! But, many agents make the same claim about short sales.
They have never studied and learned the process. They have never successfully sold a short sale. But, they are sure ready to tell you that it doesn’t work.
Here is what they missed about short sales.
1. You need to be knowledgeable about the process. You need to have a solid understanding of HUD-1s, BPOs, and the short sale guidelines of the entity that owns or insures the loan.
2. You have to stick with the transaction. You need to follow up with the short sale lender regularly. You can’t check in on the short sale every week or two. A lender will often ask for something and want it back within 24 hours.
If they don’t get what they need, then they will close the file. If you agent isn’t checking in regularly, then the short sale file could be closed without their knowledge.
In addition, your agent needs to be able to make sure the HUD-1s and BPOs are accurate. I will explain what those acronyms mean and why they are important in my next post.
If you are in trouble and facing foreclosure don’t trust an untrained professional. Hire someone who understands how to help you like a CDPE.
My team is the BEST at helping troubled homeowners in the Knoxville Area. We can help you avoid foreclosures and it will cost you nothing for our services. Give me a call and let’s talk about your situation at 865-696-9002 or email me [email protected]
Could The Realtor You Hire Kill Your Knoxville Short Sale?
The biggest reason people short sale their house is to avoid foreclosure. They cannot afford the house anymore and the bank has said they will foreclose soon.
If the short sale is not successful, then their lender will foreclose on the house. We’ve made it our business to know what we are doing. But, we see many agents that have no clue about short sales (or the short sale process) listing short sales.
This gives short sales a bad name. Many agents have been involved in short sales where the listing agent didn’t know what they were doing.
Because of that the short sale wasn’t successful and that agent and their customer wasted time. In the future they are going to think twice before showing a short sale. This hurts other short sale sellers.
It really gets on my nerves that people who don’t know what they are doing can ruin it for everyone else. If you are thinking about short selling your home, make sure you hire a competent, experienced short sale agent.
(A competent, experienced agent will be successful at 80-90% of all the short sales they take on.)
Here are a few of the things that agent should avoid.
1. Submitting multiple offers to the short sale lender. Only the best offer should be submitted. A confused mind says no. Most short sale negotiators have between 50 and 200 short sale files on their desk.
To ask them to weigh the benefits of 3 short sale offers on just one of those 50 files is probably more than their brain can handle. No, I’m not saying their brain is stupid.
It’s just that a human brain can only handle so much information before it stops working.
2. Realtors submitting incomplete paperwork to the short sale lender. There is a method to follow. Every good short sale realtor understands stacking order, and the importance of easy to read paperwork.
3. Submitting low offers to the lender. All this does is waste time. If a lender is not likely to accept the offer, then don’t waste 45-60 days negotiating it with them.
Get a fair price on the home. If it needs repairs price it with those repairs in mind and make sure the lender understands what needs to be done to the home that is why you have an offer for that amount.
If you are having problems making you mortgage payments give me a call at 865-696-9002 or email me [email protected]. Let’s talk about your situation and go over your options to avoid foreclosure.
3 Myths About Knoxville Short Sales…
– Have you heard the following myths about Knoxville short sales?
Myth #1: You can buy short sales for dirt cheap and then turn around and resell them for a profit. 
Myth #2: Foreclosures, Short Sales, and Bank Owned Homes can be bought for 30 to 50 cents on the dollar with no money down.
Myth #3: Lenders will accept any short sale offer even if it is for only 50% of what the home is worth. After all, they don’t want a foreclosure on their books.
These myths are just not true. Lenders are willing to foreclosure on properties. They have entire departments handle the sale of properties that they have foreclosed on.
Another foreclosure is nothing to fear. At the same time, they do prefer short sales. Short Sales are known to reduce a lender’s loss compared to a short sale.
They have high paid actuaries who have run the numbers and proved that to be the case. That means they take a pragmatic approach on short sales.
They want to make sure that he short sale offer isn’t lower than what the home would sell if they foreclosed on it. That is why they order an appraisal before accepting the offer.
They won’t agree to a sale if the offer is for substantially less than the appraised value. If the offer is 5% lower than the appraisal, then they might accept it.
If it is substantially less, then they will ask the buyer to raise their offer to the appraised value.
Another thing lenders check before approving a short sale is that they aren’t approving a short sale for someone that is able to afford their home.
They don’t want to lose money on a short sale when they can make money when the person repays the loan.
If you are thinking about buying a short sale give me a call 865-696-9002 or email me [email protected] be happy to help you and guide you through the process
Knoxville Short Sales…Who Is In Charge While Trying To Buy One?
Many home buyers think that the short sale lender is in charge during a short sale. Nothing could be further from the truth.
The short sale lender can only veto short sale offers. They can’t put the property up for sale or decide who to sell it to. Only the home owner can do that. Why is that?
Until the lender forecloses on the home the home owner is in the driver’s seat. They “own” the property until the lender forecloses.
We have had many buyers get angry that a home owner would not accept their lowball offer. “You have to submit my offer to the lender. If you don’t then that would be fraud”, they tell the home owner.
You, the home owner are in charge. That means that you can make the following decisions.
You are allowed to pick the buyer’s offer that you think the lender will be most likely to accept.
You are allowed to turn down offers that you don’t like for whatever reason. (Maybe the buyers are too picky about the home and want you to make repairs.)
You are allowed to turn down offers if the buyer is not pre-approved for a loan. In addition, you can ask the buyer to inspect the property before they write a contract.
You are allowed to ask for an earnest money deposit to make sure the buyer is serious about the house.
It is your right to do these things for as long as you own the property. Don’t let anyone tell you otherwise. Thinking about a short sale?
Got questions about what you can do to avoid foreclosure? I can help explain all your options so YOU can decide. My service are free to you Call Me at 865-696-9002 or email me [email protected] know your options.
