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Real Estate Short Sale Questions and Answers |
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Question: short sale vs foreclosure?
I have a home that is in foreclosure. I am also working with the bank for them to approve a short sale that was offered. Problem is foreclosure proceedings have begun and credit has been affected already. I spoke with the bank & they said if the short sale is approved the foreclosure attorneys will be pulled off. Question is, if the short sale is approved, will the foreclosure event that had started be pulled off my credit. Will it state it was changed to a short sale, or will a foreclosure status remain on my report, even though it was pulled back?Answer: Is the foreclosure on the reports already? Likely it will ...
Is the foreclosure on the reports already? Likely it will stay unless you can negotiate with the bank to remove it or attach an explanation to your reports.
Your late payments that brought you to this point will stay andaffect the scores for a time then lessen aas time goes by.Answer: no the late payments and the foreclosure initiated will ...
no the late payments and the foreclosure initiated will remain on the credit, and continue to haunt you for years to come, it is unfortunate, however, you should have taken action before the late payments got past the 60 day mark if you were concerned about saving your credit. most lenders will not even contact you till you are down 90 days, and foreclosure proceedings normally dont get rolling until u r down 4-6 months, so you had already destroyed your credit before they started foreclosure. sorryAnswer: offer the home up as a owner finance lease to purchase. Take ...
offer the home up as a owner finance lease to purchase. Take the 5% down you get from the buyer to make up the back payments and walk away.Question: If a home is being sold as a short sale for 175k what should we offer?
The home has been on the market since Aug 30,07,
The house was just reduce in price it was on the market for $189k now the asking 175k, what should we offer?
We also want to ask for closing cost.Answer: you're welcome to ask for any price that you're ...
you're welcome to ask for any price that you're willing and able to pay.
just don't get attached to it -- the bank may refuse your offer, esp. if you're asking them to pay the closing costs.Answer: They probably won't take any less than $175,000 as it is ...
They probably won't take any less than $175,000 as it is a "short sale." That means that the bank is being shorted a certain amount of money owed to them so they want to get as much as they can. Try it out though ask for $160 and see what they say?Answer: I have heard that the usual custom is to offer 5k
less ...
I have heard that the usual custom is to offer 5k
less than the ask price. You an call any real estate
office and they might give you a few more tips.
Good luck!Answer: real estate is bad now its not a sellers market its a buyers ...
real estate is bad now its not a sellers market its a buyers market
make a offer if it was me I go 165kAnswer: If you don't feel like waiting 3 months for an answer ...
If you don't feel like waiting 3 months for an answer back, I'd offer 175k. It's a SHORT SALE. Do you understand the concept?Question: short sale / foreclosure?
What does it take for a bank to consider a shortsale? My home is for sale and I have made all my payment early and ontime. Will the bank consider a shortsale on my home?Answer: Are you behind in your payments at all? The bank will not ...
Are you behind in your payments at all? The bank will not just foreclose on a house because the owner wants out so be careful.Answer: You have to supply them with your payroll and debts, PROVING ...
You have to supply them with your payroll and debts, PROVING that you can not afford to make the payments. Since you ARE making them it is going to tough convinving them you can not.Answer: About foreclosure, the most complete summary guide ...
About foreclosure, the most complete summary guide HERE:
http://buy-a-foreclosure.blogspot.com/
(How to buy a foreclosure, listings, short sales, forecl. apts,
pre-foreclosures, stop foreclosures & foreclosure loans )
Good luck!Answer: If you are not at less month behind on your mortgage, the ...
If you are not at less month behind on your mortgage, the bank will not consider a short sale.
Good luck.Answer: You should contact your lender. Unfortunately they usually ...
You should contact your lender. Unfortunately they usually only work with people that are late on their payments, and the good customers that pay on time get no breaks.Question: Short sales to family members, and then buying it back after a few years?
We owe more than our house is worth right now, as most people do. We figure one way to take advantage is to sell our home to my in-laws.
Providing we are approved for a short sale from the lender, which we should be, since we are not late on any payments, would we be able to sell the home to family and then buy it back from them in a few years?
I am not sure what the tax implication would be for them, since this is not a primary home for them, bit I know we would have to pay the taxes they incur to make it worthwhile for them to bail us out.
Any ideas?
BTW- we are not trying to pull a fast one. We are in NEED of moving to Idaho where my husband's job just relocated us. This short sale idea is to prevent a foreclourse from happening.
Once again I find myself explaning something that should be obvious- Did you read anywhere in my question where it says I would not tell the lender we were family? Geez people.Answer: First off, there is no guarantee that your lender will agree ...
First off, there is no guarantee that your lender will agree to a short sale. Most will only consider one in lieu of a foreclosure. Secondly, any debt forgiven by the lender becomes taxable income to you.Answer: the bank is going to lose money on this deal, do you think ...
the bank is going to lose money on this deal, do you think they are going to fall for it, probably not, a short sale would impact your credit, so you might not be able to buy back for several years, if the in laws finance the lenders are going to ask questions and if they find out about the family connection u r up the creek without a paddle, just remember your current lender has to approve the short sale, so they will also be asking questions, I think your chance of pulling a fast one which is one u r trying to do are slim.Answer: What you're proposing is fraudulent, or as you call it ...
What you're proposing is fraudulent, or as you call it "taking advantage" -- this will come back to bite you in the butt. First, a short sale is in lieu of foreclosure and your lender is not going to allow a short sale. Second, you won't be able to buy it back because the short sale is going to damage your credit. You are putting your in-laws in a very risky position, and should not do that to them to scam a few grand from the lender (and its shareholders).
How about just paying on time as you have been, keep your home, and things will work out when the housing market comes back. This is the best way to deal with the housing downturn, your lender, your in-laws, and life in general.Answer: Are you planning on telling the lender that the buyers are ...
Are you planning on telling the lender that the buyers are related? I'd be very careful if I was you, because anything else could be construed as fraud.
In effect, it sounds like you're trying to 'take advantage' of the lender. You don't mention any difficulty in making payments, so I don't know why the lender would agree. Add that difficulty to the tax implication mentioned above, plus the hit this will have on your credit for 7 years, and you need to think long and hard about it.Answer: Yes, that is loan fraud dear....they will be SCRUTINIZING ...
Yes, that is loan fraud dear....they will be SCRUTINIZING that loan like a shark for years to come and you CANNOT legally NOT disclose that it's a transaction between family members.
That is what they call a non-arms length transaction, and it appears on the appraisal....and short-sales including a non-arms length transaction are RARELY approved by banks.
Your questions about tax implications, etc are irrelevant...stay away from what you are contemplating....or you could end up in prison.Answer: A lender will not approve a short sale to anyone that you ...
A lender will not approve a short sale to anyone that you know. Part of the short sale process is affirming that you have no relationship with the purchaser other than the business of selling the house.
As others have stated, what you are proposing is stealing from the bank. You borrowed a certain amount of money from them to buy a house. Now you are asking them to take less money back to transfer the house to someone else. if you think about it, it is theft.
A similar situation would be that I agree to buy a car from you for $10,000. I agree to give you $100 per month until the car is paid off. After 3 years I have paid you $3600. I then come to you and say "you know, I know I said I would pay $10,000 for this but now I think I should pay less. After all, the car is 3 years older, has more miles on it so it isn't worth $10,000 anymore. Lets say we make it $7,000. Oh, and I'm not going to pay the $7,000. I am going to havemother in law pay it and own the car. Then, in 10 years when it becomes a classic and is worth more than $7,000 I am going to buy it back from her". The only person that loses in this is the one that you initially made the deal with.Answer: I think you;re going to have a very hard time making this ...
I think you;re going to have a very hard time making this work for a number of reasons, some already covered, and some not.
1. Non arms length transaction - already covered.
2. This will not be a primary residence for the inlaws. Qualifying for a loan for an investment property is very dificult, and requires a very large down payment (minimum 20% with excellent credit)
3. Taxes would vary depending on where you live. If there are mortgage taxes in your area, they would add significantly to you closing costs.
4. Getting approved for a short sale may not be as easy as you think. This is one of the cases where have made all your payments on time could hurt you. The bank sees that you can afford to pay even if you owe more then it's worth. Most short sales are given to borrower's in distress not people who can afford to pay.
one good thing for you is that the people who say you would have to pay taxes on the written down amount are wrong. That law changed this year.
GL with your problem. Inprofessional opinion, you will have to lie to get it done, and if the banks get even a sniff of that, they will deny your request in a heartbeat, and probably put a fraud watch on your file which can make it a lot harder to get things done. I recommend that you try to find an alternative to selling to family. Try to work out a short sale to a non family member, and then if you move back in a couple of years, you can buy a different house at a much better price. Home prices have a long way further to fall.Question: What is a real estate short sale? How does it work? and how do you get started?
Answer: better than offering a short sale is to offer a lease to ...
better than offering a short sale is to offer a lease to purchase contract. no money is needed for a down payment and you can always sell your option for some quick cash of 10-15k per flip.Answer: A short sale occurs when a bank is foreclosing on a home ...
A short sale occurs when a bank is foreclosing on a home owner and you come in and offer the bank an amount less than what is currently owed on the note. For example, homeowner Joe is in foreclosure and owes $100,000 on the first mortgage. You negotiate with the bank and offer to purchase the home for $85,000 ($15,000 less than owed). They may accept your offer to eliminate the future expense of holding the property, taxes, insurance, etc.
To get started, you need to educate yourself on the where and how to's. There are lots of real estate gurus out there who "teach" you how, but most only give you the format and part of the story. Dealing with the banks can be difficult at times, although they are more willing to deal now than ever due to the current market conditions. Six months ago, I backed out of a short sale because the bank I was working with took over six months to finalize the deal and then asked for more that the originally agreed upon price. This is an isolated incident, but it is an example of how difficult they can make it. Contact me viawebsite if you would like to speak privateley about this subject. I am a professioanl real estate investor and coould send you in the right direction.
www.nationwideproperty investments.comAnswer: A short sale is where a house is sold for less than what is ...
A short sale is where a house is sold for less than what is owed on the mortgage. It is becoming a more acceptable practice because of the mass of foreclosures happening around the country.
How do you get started. If you are the buyer - you would submit an offer for the purchase of the house contingent on approval by the lien holder. There is usually a whole package that needs to be completed by the seller in order for the short sale to work, so he/she needs to be onboard.
If you are the seller - then you need to contact your lender's Loss Mitigation Department. Tell them that you want to sell the house, but you are no longer able to sell for what is owed. State that you cannot pay the mortgage down. They will ask you to fill out a Short Sale package - including the financial (loan approval, or proof of funds) info of any buyer plus their offer.Answer: WHAT IS A REAL ESTATE SHORT SALE:
A real estate short sale ...
WHAT IS A REAL ESTATE SHORT SALE:
A real estate short sale is when the bank accepts less money to pay off the mortgage than what is owed. This can only happen when the property is being sold...this is NOT used when or if you try to negotiate down the mortgage balance on your own mortgage.
HOW DOES IT WORK:
As the homeowner, you can find anyone to buy your property. However, you can not do a short-sale unless the property is in the foreclosure process (90+ days delinquent). The buyer would offer your bank $100k on your property for a loan = $150k. The bank would accept the bid or offer (not always) and then would convey the property to the buyer.
In some states, the mortgage company can obtain a summary judgment (which is either the full or forgiven amount of the mortgage) and could technically 1099 the homeowner for the amount they did not collect from the sale of the property. So, inexample, the $50k could be 1099 to the homeowner for the amount not collected to convey the property. This is also the case in a sherriff's sale.
However, as the buyer, if you are knowledgable, you can negotiate a deficiency waiver for the homeowner which would protect them from the bank 1099ing them.
HOW DO YOU GET STARTED:
You first should educate yourself as much as possible. I always suggest people to seek out someone like myself or a realtor educated on short-sales. Find someone that has been doing shortsales for a number of years and see if they'd be willing to help you understand how the process works. You can also buy a number of books, e-books and things of that nature. However...BEWARE...that most of those courses and books are general knowledge and do NOT give you the whole story.
If you are going to invest in real estate, you need to build what I call a "power team". Your power team will consist of a Title Company, a Realtor, a Mortgage Broker, a Lawyer (who understands real estate law), a Tax Advisor (who understands real estate tax implications) and several Conractors.
Investing in Real Estate is not for the slight of heart. It can be dangerous for someone who doesn't have the right people around them and/or who doesn't fully understand what they are entering into. I see far to many people get into Real Estate Investing who have no more knowledge than watching TLC's Flip That House. All of those people...I see ending up in financial trouble because they haven't taken the time to educate themselves on what they are doing. Investing in Real Estate is just like investing into the Stock Market. If you don't know what your are doing or you don't have the right advisors around you...you WILL lose your shirt.
THE SHORT-SALE PROCESS:
The first thing you would do is obtain a BA (borrower's authorization). This allows you to negoiate with the bank directly without having to go through the homeowner. Once you've contacted the bank and given them the BA, you tell them you are wanting to short-sale the property in question. Then ask them for their "short-sale package". The short-sale package is a list of questions and documentation that you will need to gather for the homeowner, if they haven't already provided the same information to the bank already. This information includes, but is not limited to...2 month's bank statements, hardship letter, last two years of their tax filings, at least two recent payroll stubs, an income statement on the homeowner and any recent listing information (if the property has been listed with a real estate agent). After all that is pulled together, you will submit that information along with a purchase and sale agreement signed by you and the homeowner as well as a HUD/closing statement of the fees and closing costs for the sale (this is where your title company comes into play). After all that is submitted, its a waiting game to see if the bank will accept it.
There are dozens of things you can do to "motivate" the bank to sell you the property at your offering price. However, I have years of experience and thousands of dollars rapped up in what I know...as well as do other people that know how to do this. Most people, myself included, don't give away all that we know for free. I own a company that actually does this for people. My process is to showclients how to do what I do...step-by-step for a fee.
This is the just of what I do and how to do a short-sale. There is much more to this process than I listed here. There is information that I have obmitted...due to time and space here. |
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