There was an article in the LA times on how to do a short sale on your house. Hopefully this info is correct and hopefully the short sellers will read it. I still see a lot of short sales listed for way more than the nearby REO's.......
Here's a part of the article,
More than a few financially strapped owners have tried to unload their homes through what's known as a short sale, only to end up stymied by what most believe to be an uncooperative lender.
Truth be told, though, lenders are so swamped these days by underwater borrowers who need permission to sell their homes for less than what they owe that they give most short shrift. But there are ways to get your lender's attention.
For starters, align yourself with an agent who has experience with short sales. Most don't, according to Stacy and Michael Spickes, a husband-and-wife realty team who operate America's Home Rescue, an Austin, Texas, firm that has handled about 250 short sales over the last six years.
"Ninety-five percent of all agents don't know how to do these transactions," Stacy Spickes says. (I will vouch for that!)
Look for an agent who has established alliances with loss-mitigation staff at various institutions, if not your particular one, and can offer references of previous clients who have completed short sales.
Beyond that, here's the step-by-step short-sale process the Spickeses have created to increase your chances of getting your lender to say yes:
* Criteria: To qualify, you must be behind on payments, have a legitimate hardship and have little or no equity in the property, generally 8% or less.
Your hardship must be genuine, but lenders these days are fairly lenient, according to the Spickeses. It used to be that only a death, medical emergency, divorce or job loss qualified.
But now, if your mortgage payment or even your property taxes rise beyond your ability to pay, lenders are typically agreeable to a short sale.
However, before deciding, lenders will want to see a financial work sheet listing all your bank accounts, real estate owned and other assets.
If you have enough cash on hand or assets that can be sold, lenders will demand that you make up the difference between what the house sells for and what you owe. (Yup they are gonna make you sell your Hummer!)
The article goes into a fair amount of detail in what is expected and what you need to do. It's a pretty good read and most short sellers would be well advised to give it once over. I'm so tired of looking at short listings that obviously have no chance of selling.
5 comments:
Let me make a comment about short sales... When did the "rules" change?
12 years ago I had to claim BK - my husbands business went down the tubes and I was pregnant with my son and became ill and could only work P/T. Well, P/T wages don't pay for F/T bills. So long story short - my mortgage went NOD. My friend and broker introduced me to doing a thing called a "short sale". I was able to qualify but WOW - did I have to go through the ringer to qualify. Not only did I have to submit all my medical records, my OBGYN had to sign some paperwork - it was unblievable. Once I was qualified though - the bank only gave me 60-90days to sell that house - if it wasn't sold - back to the bank it went. I was told this was standard procedure...whatever - the house did not sell in that 60-90days and back to the bank it went. Gee - tell me - how many of these short sales now are going back to the bank in 60-90days? ZERO. Back 12 years ago the economy was bad but not this bad - so a bank having a loss on their books wasn't a big deal - but NOW because there are so many, the banks are going to sit on these short sales so as it buys them time in having to report them as a loss on their P&L. It's always about the bottom-line.
We recently looked at a couple of homes with a real estate agent and one was a "short sale". She said the banks really make it difficult, making everyone jump through hoops and that she really didn't want to take that on. It wasn't the one we were interested in so it made no difference, but I thought it was interesting that even in "hard times" real estate agents could turn down business.
Market:
I put offers in for several short sale homes in Corona, CA.
I never got a call back after 90 days, they are a waste of time specially if two banks are involved.
As a rule I don't waste my time with short sales. I do know a co-worker that was successful in selling his home via a short sale last month. So there are some that are making it through all the hoops.
I personally think that some short sales go through because the bank is at a point in the month where they can post a loss for a paticular home....I think it's like an assembly line - when that "one house is up" - the bank will negotiate to get it sold.
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