Avoiding Short Sale Delays


It is understandable for first time home buyers to look into short sale properties since they are certainly much more affordable than newly-built homes and in much better condition than foreclosed properties. But, the HousingPulse Tracking Survey from Campbell revealed that the number of first time homebuyers buying short sale homes has declined consistently in the past three months to 39.7 percent of the total short sale transactions from its peak of 54.1 percent recorded in November 2009.

The possible reason for the drop in short sale purchases is the delays, usually due to sloppy paperwork. Time and again, it has been said how important it is to make sure your short sale proposal does not give the lender any reason to reject it — even a small one.

So, how do you avoid this short sale hurdle? By making sure everything is in order:

Financial Documents – this would include all pertinent documents which will support your claim of financial hardship such as your statement of assets and liabilities, unpaid utility bills, income tax return, delinquent notices from other creditors and pay slips.

Buyer Offer – you have to keep in mind the offer should not only be reasonable but justifiable as well. It would help if you or your buyer has conducted a Comparative Market Study to show how much the other homes in the area were being sold for. The buyer should be able to also show he can afford to buy the property by showing proofs of financial capabilities and if possible, a pre-approved letter from a mortgage lender.

Hardship Letter – this is possibly the simplest but the trickiest part as you will have to make the lender see your situation without sounding like you are not telling the truth or exaggerating your circumstances. It would help if you would be specific with the details and make sure the related document supporting such particular claim will be submitted as well. Without these shreds of evidence, your letter will merely look like a fictional story.

Believe It Or Not, A Short Sale Is Your Best Option


Whenever you hear about a friend or a colleague going through a foreclosure, it is understandable for you to hope it will not happen to you as well, but with the way the economy is going, it pays to be prepared. You might not want to think about things like this but your only salvation is to know what you need to do to avoid losing your home to foreclosure.


So what are your options? There are actually several options available, if you think about it, such as a loan modification. It is best if you consider the worst case scenario though— that is, not being able to afford your home even if you move your finances around. In this situation, you will have to focus on making sure you clear your mortgage debt without making your credit score look bad afterwards.


Only one solution will come to your mind — a short sale. It allows you to sell your home at an amount which the lender will find acceptable enough to consider erasing the mortgage debt even if it is less than what you owed on the property. If you are lucky, your lender might not even go after the difference between the debt and the sale price.


For certain, a short sale is friendlier on your credit history than a foreclosure. Although, it might take time to recover your financial credibility in the eyes of creditors. You will still be in much better shape.


Some Helpful Reminders

Homeowners considering a short sale usually get into the process without really preparing themselves. From the very start, you need to be realistic and understand it is going to be a complicated process. Make sure you work with someone, particularly a short sale Realtor, who has both the knowledge and the experience to pull this off. It would be best to make sure all requirements have been submitted and are in order, since most short sale transactions fall through because of incomplete paperwork.

It Always Comes Down to Short Sale VS Foreclosure

The number of distressed borrowers in Florida continues to grow as lenders finally start going through their shadow inventory. With the sudden surge in foreclosure-related activity, more buying opportunities are being created.

Buyers will ultimately have to choose between buying a foreclosed property and a short sale home. If you too have been straddling the fence and unsure which to choose, consider each of their advantages and disadvantages.


Short Sale Properties

Although sometimes more expensive than a foreclosed home, most short sale houses require less repair work since the owners are still occupying the property. This means they are usually in a much better state and you would not need to shell out much money to make it habitable.


Now, when it comes to the process involved, it could take anywhere between 6 weeks to 6 months for a short sale transaction to be completed. The length usually depends on how well you have prepared your short sale proposal. These days, many lenders readily approve such proposals in order to reduce the number of homes in their REO inventory. One helpful tip is to work with a short sale Realtor for their experience and knowledge about the process.


Foreclosed Homes

If budget is a consideration, repossessed properties are certainly more affordable but, you have to think about the repair costs. If the home has been vacant for some time, you may expect it to be in a potentially more dilapidated state. Worse, it could have succumbed to mold infestation or attracted wild animals or even vandals. You might have to shell out a lot of money before it becomes livable.


In terms of the buying process involved, buying foreclosures is relatively straightforward. But in the past couple of months, lenders have been embroiled in controversies amidst claims of wrongful foreclosures as a result of sloppy documentation. Buyers will have to do their homework if they want to buy these properties in order to avoid problems in the future.

3 Tips to Selling Your Short Sale Home Fast


The growing popularity of short sales has created a competitive environment for underwater homeowners. It has become quite tough to attract qualified buyers and keep their attention. If you are also contemplating a short sale to avoid a foreclosure, you need to know what you need to do in order to sell your home fast.

Consider the following tips:


Attract Buyers

It is important for you to attract as much buyer interest as you can. You need to work with your short sale Realtor in coming up with marketing strategies. For instance, you can utilize various real estate sites such as Realtor.com, Zillow.com and Yahoo real estate. It should also be listed on the local MLS as well for maximum exposure to buyers in the market.


Be Available

If your marketing proved to be successful, you need to be ready with the calls, emails and requests to see the property from interested buyers. Always reply to their queries promptly and make sure you also take note of their comments regarding your home. It can take much of your time but you certainly would not want a qualified buyer to slip through your fingers.


Communicate

Once you have secured an offer, your work does not end there. You need to stay in constant touch with the buyer, your Realtor and even your lender. The approval process can be lengthy and you need to keep all channels of communication open to ensure there would be no breakdown because of delayed responses or failures to make status updates.


A short sale is your best option if you are looking for a way out of your mortgage problem but, you have to understand you have to work hard from day one. The good news is, all your hard work will pay off as soon as you receive the call or letter of approval from your lender.

Florida Short Sale Primer for Buyers


Investing in distressed properties these days is certainly becoming popular as evident in the increasing number of short sale properties taken off the market during the first half of the year. This should not come as a surprise since these homes offer the chance of homeownership at a much more affordable price.


Now, for first time buyers interested in short sale homes, it would be a good idea to familiarize yourself with these homes, the process involved and even the people you will be dealing with. By doing so, you are aware of what to do and what to expect.


What is a Short Sale?

In real estate, a short sale is considered to be a strategy to help an underwater homeowner stay out of foreclosure by selling the home at an amount which is less than the remaining mortgage balance. Underwater essentially means the homeowner is already suffering from negative home equity. The said sale should naturally be approved by the lender since they are the one who will suffer the loss.


How does it work?

Typically, the homeowner will have to find a buyer who is willing to pay the asking price. The buyer’s offer along with the other short sale requirements will be submitted to the lender, who can choose to accept or reject the offer or make a counter offer. In many cases, the seller works with an experienced short sale Realtor in order to increase the chances of the proposal getting approved by the lender.


If the offer is accepted, everyone involved proceeds to the closing table. Typically, the lender pays for the closing costs and real estate commissions. Depending on the initial agreement, the homeowner may or may not pay the difference between the mortgage debt and the proceeds of the sale. It is within the rights of the lender to obtain a deficiency judgment.


In addition to the short sale Realtor, you might also want to work with a real estate attorney to understand the impact of the sale on your tax return and other technicalities which might arise.

More Short Sales During 2nd Quarter


Good news for everyone in the short sale industry — buyers, sellers and Realtors. For the second quarter of 2011, the number of short sales actually accounted for 12 percent of the total home sales transactions in the nation according to a real estate tracking firm. Compared to last year during the same quarter, wherein there was only 2 percent short sales recorded, it is indeed a big difference.


Analysts are expecting more homes sold via short sale as lenders are choosing to approve transactions rather than foreclose because of the high cost associated with filing foreclosure and waiting for it to be processed by the courts. If this is the case, short sale sellers and their Realtors are indeed lucky.


A distressed homeowner can benefit from a short sale since it will not only possibly get rid of the mortgage debt but it will also protect their credit score.


Navigating the Short Sale Process


It is possible another reason for the rise in short sale activity is because there are more short sale Realtors who have grown familiar with the process. Before the housing bubble burst, only a select few are familiar with such transaction. Right after the collapse of the subprime mortgage market, these knowledgeable and experienced Realtors started carving a niche of their own.


The entire process can try your patience and frustrate everyone involved which is why you need to make sure your short sale package is complete. This means submitting all relevant documents such as the Hardship Letter, payroll stubs, income tax returns for the last two years and a comparative market study to justify the offer amount. You might even want to include pictures of your home as well as an estimate of the repair costs. You should also prepare for the lender’s response whether it is a rejection, a counter-offer or an acceptance.

5 Simple Tips When Buying Florida Short Sale


Without a doubt, the current situation of the housing market sets the perfect stage for making a real estate investment. In other words, it is still a buyer’s market and plenty of investment opportunities exist. One such profitable investment involves short sale properties.


Unfortunately, the entire process which comes with this transaction is still lengthy and complicated, which can be frustrating for both sellers and buyers. If you are looking to improve the chances of getting your short sale proposal approved, consider these following tips:


Tip #1: Find the Right Short Sale Home

There are many ways you can look for the perfect short sale property but the most practical and efficient ways is through a short sale Realtor. This is because many sellers of short sale homes choose to work with a Realtor to find qualified buyers because of their experience and expertise.


Tip #2 Find A Short Sale Realtor

Since it has been mentioned short sale transactions can be quite lengthy and complicated, finding an experienced and knowledgeable Realtor will make everything a lot simpler and faster. It will certainly make the entire buying experience more manageable and successful.


Tip #3 Investigate

There are several things you need to know about the property aside from its physical condition if you want to end up with a successful experience. For starters, find out how much the mortgage debt is and how many months the seller is behind on their payments. You should also try to find out if there are junior liens attached to the home and who these creditors are. Lastly, you might want to do a comparative sales analysis. Your real estate agent can do this as well.

Tip #4 Inspect the Property


Keep in mind you are doing the home inspection to find out if you are getting a sound property. One that when you purchase you’ll be able to either move right in or fix it up for tenants. By uncovering extensive repair work, you can decide if the home is worth buying.


Tip #5 Write a Proper Offer

A lot of short sale proposals get rejected because the buyer forgot it is the lender who has the final say about the sale of the home. For this reason, you need to help the lender make the decision to sell by making sure you have submitted a complete offer. This means submitting all pertinent documents that will establish your financial credibility.

3 Must Dos in a Florida Short Sale


With each passing day, more short sales are getting approved and accepted by lenders. It is a fact which many distressed homeowners and short sale Realtors have found exciting. After all, it is considered to be the best foreclosure alternative available to borrowers who are cash-strapped or underwater on their mortgages.

If you ask any short sale expert about what you can do to guarantee lender approval, they will tell you to do three things:

Foreclosure Facts Every Investor Needs to Know

  • Make Your Lender See Your Financial Hardship – you have to remember lenders will only consider a short sale if the borrower is truly incapable of paying the mortgage debt. It is not enough you submit a moving Hardship Letter. You also need to make sure your letter is backed by facts contained in documents such as your statement of assets and liabilities, income tax, medical bills (if hardship is due to health problems), utility notices, credit card statements and others pertinent papers.
  • Be Organized – it is important you submit a clean offer, which means everything should be in order. Aside from financial documents, you will need to submit a Broker Price Opinion, comparative market analysis to support the sale price and the buyer’s offer. Meanwhile, you need to make sure all agreements with the buyer are in writing. Discuss with the buyer any physical defects the property has. The buyer offer should also be contingent on the home inspection.
  • Hire a Short Sale Realtor – from the very start, you need to accept you cannot do everything on your own. Also, your lack of experience and knowledge of the short sale process can cause delay and worse — rejection. Be practical and hire a skilled Realtor. You can depend on his efficiency and attention to details.

These three things will most likely guarantee lender approval. You simply need to be patient and make sure you do your homework.

Banks Becoming More Realistic, Approving More Short Sales

Banks Becoming More Realistic, Approving More Short Sales
A foreclosure tracking firm has reported at least 12 percent of the total home sales in the US during the second quarter of the current year were mostly short sale transactions. This figure was 2 percent more than what was recorded in the first quarter, which indicates lenders are trying to clear their inventory of distressed properties and reducing the number of homes ending up as REOs.
The latest figures are also showing lenders are becoming more realistic about short sales. It is the only foreclosure alternative which allows a win-win situation for everyone involved — the homeowner avoids foreclosure, the buyer manages to buy a home in much better condition and the lenders incur less costs and recover more compared to a foreclosure. Of course, the general public also benefits since there are fewer foreclosed homes entering the housing market.
In addition, the number of days it takes pre-foreclosure homes to sell has also decreased from 256 days to 245 days. Hopefully, lenders make their processes more streamlined and efficient so more short sales are approved and completed. As you know, there are many cases wherein the short sale buyer walks away from the transaction because of the long wait.
What Homeowners Should Do
For distressed borrowers, a short sale transaction can actually represent a way out of the mortgage mess you are in. Just keep in mind it requires the consent of the lender, which means you need to comply with all their requirements. For this reason, it would be practical to hire a short sale Realtor, especially one who is experienced and knowledgeable about the entire process. Such qualities will help maximize efficiency and almost guarantee lender approval.
A short sale transaction can be lengthy and complicated, which is why you need to be patient. The key is to keep all lines of communications with the Realtor, buyer and even lender clear in order to respond quickly and accordingly.
The good news is more lenders are approving short sales — as long as everything is in order.
Reference: http://www.bloomberg.com/news/2011-08-25/home-short-sales-jump-in-u-s-as-banks-more-realistic-on-property-market.html

A foreclosure tracking firm has reported at least 12 percent of the total home sales in the US during the second quarter of the current year were mostly short sale transactions. This figure was 2 percent more than what was recorded in the first quarter, which indicates lenders are trying to clear their inventory of distressed properties and reducing the number of homes ending up as REOs.

The latest figures are also showing lenders are becoming more realistic about short sales. It is the only foreclosure alternative which allows a win-win situation for everyone involved — the homeowner avoids foreclosure, the buyer manages to buy a home in much better condition and the lenders incur less costs and recover more compared to a foreclosure. Of course, the general public also benefits since there are fewer foreclosed homes entering the housing market.

In addition, the number of days it takes pre-foreclosure homes to sell has also decreased from 256 days to 245 days. Hopefully, lenders make their processes more streamlined and efficient so more short sales are approved and completed. As you know, there are many cases wherein the short sale buyer walks away from the transaction because of the long wait.

What Homeowners Should Do

For distressed borrowers, a short sale transaction can actually represent a way out of the mortgage mess you are in. Just keep in mind it requires the consent of the lender, which means you need to comply with all their requirements. For this reason, it would be practical to hire a short sale Realtor, especially one who is experienced and knowledgeable about the entire process. Such qualities will help maximize efficiency and almost guarantee lender approval.

A short sale transaction can be lengthy and complicated, which is why you need to be patient. The key is to keep all lines of communications with the Realtor, buyer and even lender clear in order to respond quickly and accordingly.

The good news is more lenders are approving short sales — as long as everything is in order.

Reference: http://www.bloomberg.com/news/2011-08-25/home-short-sales-jump-in-u-s-as-banks-more-realistic-on-property-market.html