What People Are Saying Category
While doing a real estate transaction, not all parties with a financial interest can be winners. However, a successful short sale is one of those rare cases where everyone leaves a winner.
The Seller wins by avoiding foreclosure: This will also help the seller to avoid any credit damage that goes along with foreclosure.
In essence, the property is sold and the seller’s lender pays all the costs associated with the sales process. In most cases, the seller cam move on with their life without paying a dime out of pocket.
The Mortgage holder wins by reducing the loss they incur to get the unpaid loan off their books: It is obvious that the costs associated with acquiring a property through foreclosure hit the mortgage holders really hard.
Here in our “Ask The Expert Area” We had the following question “I am trying to buy a short sale. It has been 4 months and we have heard nothing except that we are now on our 2nd negotiator, still with no contact from them.
I am getting very frustrated. Is there anything I can do on my end to try to push the process along, or is it all up to the agent? Mary asked.”
Here is a problem: Buyers don’t like short sales because of the uncertainty and the wait. How do we solve this problem?
During the short sale process, if the appraisal gets completed and the bank won’t accept the buyer’s offer, then request that the bank to keep the file open.
There are several reasons that banks should be willing to keep the file open.
Knoxville TN – A bank should accept your short sale when the following rules apply. All banks and servicers have a fiduciary duty to the investor of the loan.
If they own the loan themselves, they have a fiduciary duty to their stockholders. The duty is to get that investor the most money possible.
So, a lender should accept an offer if it will net the most money.
The answer is that it is unlikely that any of that will happen.
Here is how we can assure the negotiator that the offer will net them the most money. Your only job is to prove that to the lender.
Do that by showing them that the property has been on the open market for 60-90 days. It is best to be able to show that the house was easy for buyers to see and other agents to show.
I recently had an appointment with homeowner who was unsuccessful at doing a loan modification. Their lender told them to consider either a deed-in-lieu or a short sale. In the meantime the lender started foreclosure proceeding against the homeowner which happens all the time with lenders. One department doesn’t communicate with the other and it just creates a confusing mess for struggling homeowners. This owner didn’t want the lender to foreclose but to say the least was pretty fed up with the whole process at this time. Their question for me was..
“I would like to short sale my house. However, the foreclosure has already started. I don’t know how soon the bank is going to come and kick me out. Can I still short sale? Or, is it to late? .”
We were just involved in another successful Knoxville Short Sale at 12530 High Forest. Our seller had contacted us after having their home on the market with another agent who didn’t have any experience at short sales.
Our seller had lost their job and was having trouble because of the drop in income to maintain their mortgage payments. After meeting with them they decided the best thing for them was to do a short sale.
Many homeowners think they have lots of time. “We’ll put out home up for sale in a few months. I know the bank is working to foreclose on it, but we can wait”, they say to themselves.
In order to have a successful short sale, then your agent will need time to submit everything to the lender and for them to process it.
In addition, it can take a month or more for your home to sell. Buyers don’t always materialize in 2-3 days. If you are less than a month away from a foreclosure sale date, then we can help you.
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!
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…
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.
I was contacted by a West Knoxville homeowner who recently had just lost their job. They had been told to sell their home on a short sale by another Realtor they had talked to about their situation. But they were unsure if that was what they really wanted to do. They knew they didn’t want to lose their home to foreclosure and wanted to explore all their options. They know a Knoxville short sale was one option but want to consider all of them.
They were referred to us by a friend who knew my team was experienced in helping area homeowners who may be facing foreclosure. We had a meeting and looked at their situation and explained all their options to them. They decided they didn’t really want to sell their home at this time and wanted to prosue a loan modification with their lender. They weren’t currently behind on their payments and had some income from a severance package they had recived from work.
Since any time a you are in trouble before a lender will consider a loan modification or short sale. You need to put togerther a finaincial package on yourself and present it to the lender to consider. We help our homeowner assemble all their personal information and put them in touch with their lender to consider the loan modification.
In the meantime while they where waiting to hear from their lender they were able to secure a new job. It wasn’t making the type of income they were making before but it was income and a job. They contacted me for advice and I told them to call their lender and share the information. I said there is very good chance they will reduce your interest rate for 3-5 years if you asked them to do it.
After about 45 days our homeowner called and said their lender reduced their interest rate for 5 years which made their payment affordable in their current situation. They were excited and grateful they called us and didn’t sell their home on a short sale like the first Realtor had told them.
They is why if you are a Knoxville area homeowner who made be facing foreclosure contact a trained professional. Most Realtors who don’t specialize like we do in helping people in trouble don’t have a clue on what the solutions are in order to help you.