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Real Estate Short Sale Questions and Answers |
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Question: Do you think a lender will do a short sale/refi for approximatly $65,000, if our loan is in bankruptcy & disch
We filed bankruptcy & it discharged on 11/07. With the new law the home needs to be included in the bk. We have 2 loans 1st mortgage for $230,000-7.5% due to adjust in May of this year & a 2nd mortgage for $57,000-12.69%. We did not sign either of the reaffirmation aggreements because we were afraid of what the payment will be once adjusted. We were told by Option one (current mtg co.) that they can not help us in any way because we did not sign the reaffs & we do understand that. However they did say that we could do a short sale/short refi. We are current on our payments but they state at this time it doesnt matter if we are late or current, they would still consider a short sale/short refi. We did find a lender who is willing to refinance us at a decent rate even this recent after our bankruptcy. My question is do you think the mortgage company would be willing to forgive $65,000+ or take a chance of us walking away and them losing more? Value of home $245,000-owe $287,000+.Answer: I was in the same place that you are in now. Your lender ...
I was in the same place that you are in now. Your lender must be AMC mortage companies. cause they told me the same thing you said in the question. Me myself I sold it back to them, because I could not see owe more then the house is worth in this market. If a another company willing to give you a loan go get what you want and be happy instead having to worry every 3 years willintrest going to be crazyQuestion: How do RE agents negotiate a short sale w\ a bank\servicer??
not too experiance in this area, I've heard, you present a packet of 8 different issues to them.
Anyone know what these are
thxAnswer: They present a strong case why it is in the lender's ...
They present a strong case why it is in the lender's best interest to accept less then the full amount of the loan. They do that by showing a depressed market and a property that needs repair. In other words.... they negotiate.Answer: You present comparable properties to the lender to determine ...
You present comparable properties to the lender to determine value of the property. Most lenders will have an appraisal done also.Question: What is a short sale?
Are the sellers being forced to sell their home quickly or they prefer to have a short closing process. And does short sale mean that they are somewhat desperate to get rid of the house b/c of dual mortgages, they have to move, etc...
Also, if a bank currently owns the property does that mean the list price is firm and will not budge?Answer: a short sale is something a home owner does to avoid ...
a short sale is something a home owner does to avoid foreclosure. they are getting the mortage co to accept less than is owed on the house. there could be any # of reasons for it, but it is generally a need to sell to avoid the forclosure. make sure if you are considering buying a house that way that you get the title to the house free and clear (you may want to get title ins. through the sale)Answer: When you sell at the market value but it is not enough to ...
When you sell at the market value but it is not enough to pay off the mortgage loan. The mortgage company agrees to settle for a compromise and not require they get the full payoff in order to release the lien against the house.
They may require the house seller to pay some of the shortfall out of their bank account or the may require the seller to sign a promissory note for the shortfall, or they may file the shortfall with the IRS as "phantom income" so that the house seller has to pay tax on the forgiven portion of the loan as if it was income.
You may be able to negotiate away these items.
The buyer often does not know what the bottom price is. The bank is trying to avoid the expensive foreclosure process, so if you offer a price so low that the bank believes they will better off foreclosing then they will proceed with that process.Answer: A short sale is when a home owner has missed more than 1 ...
A short sale is when a home owner has missed more than 1 mortgage payment and is now trying to sell the home before it goes into foreclosure. They have negotiated (or at least they should have) with the lender to accept an offer for less then the current mortgage due. This has nothing to do with the number of mortgages held and yes they are usually desperate.
Both a short sale and a bank owned property will have a lower limit to how far the bank will go, however this often isn't the list price. You would be more likely to get a lower price with a bank owned home, but all other items (repairs, closing date, seller assisting with closing costs, etc) are more firm or in some cases non existent with a bank owned home.Answer: I've been negotiating short sales for homeowners for ...
I've been negotiating short sales for homeowners for over 5 years, so I can easily answer your question.
A short sale occurs when the mortgage company (bank) agrees to accepts a mortgage payoff amount that is less than the mortgage balance.
When a mortgage holder falls behind on payments or is going to fall behind on payments and is unable to sell their house for enough money to payoff the existing mortgages, then a short sale may be an option that would allow the homeowner and bank to avoid a lengthy foreclosure process.
For instance, I recently negotiated a short sale for a couple that divorced. Neither one could afford the house individually and they owed too much to sell it retail and pay an agent commission and closing costs. So, in order to avoid foreclosure I negotiated with the first and second mortgage holders to accept less. The total owed was $332,000 on a property valued at $335,000. The banks agreed to accept a $260,000 short sale as payment in full.
Yes, in all ofdealings the homeowners moved after, and often before the short sale completed.
When a bank owns a property then a short sale is no longer possible. The property is now an REO (Real Estate Owned) property. These properties are typically listed with a Real Estate agent and sold on the retail market. You can get great deals on REO properties, especially if they have been on the market for over 240 days.
Visit http://www.myshortsaleclub.com for additional short sale information.Question: Short Sale question?
I found a house on market for $220K, I had my real estate agent put in offer of $210k, my financing is already approved. The seller is trying to do a short sale, and they agreed and we are in contract. We gave 21 days to approve. So now it's been sitting with bank, and I had an odd feeling it was taking too long because at any time these people will not be able to keep up on payment and bank stands to lose alot more than on this short sale so why take so long to accept? So I had my brother call their real estate agent and ask to see house. She not only shows it, she takes offer from him and tells him it's the 3rd one! I realize that the bank has final approval, but I am in contract with this seller, does their agent have the right to continue taking bids? I am fairly certain now why the bank is not responding to mine is one of the other ones is higher so they are waiting me out past the 18 days so they are clear to take higher bid.
I live in California, so if what this agent did is not right, please send me details of how to turn her in. Even if I don't get my dream house(it's got a shop that I can do my wood working in and keep all my pets) I don't want her messing with other people again if I can help it.
How is it then the seller accepted my offer and signed a paper with my real estate agent? That was a binding contract with them, how can they go into another contract with someone else for a higher amount? My brother simply asked, he didn't make offer, their agent told him she took 2 so far. So mine and 1 other is with bank.Answer: let me see, she disclosed that there are other offers, so ...
let me see, she disclosed that there are other offers, so presumably your brother's would be contingent on the others not being accepted or not completing.
legal so far
I think she's fully legal ...
you aren't in contract, of course -- because you know the bank has to approve the deal, you know the current owners do not have the capacity to complete. Since you know, it isn't a contract -- what you have is an offer made by two parties to a third party [the bank] which has not yet acted and is still within the grace period you allowed.
what is bank going to do? take the best offer from their viewpoint, of course, or reject all offers. as you say, they have 18 more days to find an offer that is better than any one they have -- whether it is yours or someone else's -- or return your good faith money with regrets.Answer: Her job is to sell the house to any and all interested. She ...
Her job is to sell the house to any and all interested. She is obligated to the seller to take bids.
The seller or the bank.can turn down your offer any time. He doesn't have to act.
He and the bank may be hoping for slightly more favorable terms or a slightly higher offer.
They could come back after another couple of weeks with a counter offer: for example $215. Then you could decide
whether it was worthwhile.
Banks get themselves into credit crunches as well as everybody else.
Maybe it's worth more than $220. They are not obligated to you to sell it for the listing price.Answer: sounds a little shady
sounds a little shadyAnswer: Hi Jim T,
The bank/lender has not approved the short sale ...
Hi Jim T,
The bank/lender has not approved the short sale yet. The sellers are still in the process of getting their short sale approved. Everything is up to the bank/lender's approval.
Multiple offers are very common in short sale. You do not have a binding contract with the sellers yet because they did disclose to you that it has to be approved by the bank/lender. Since you do not have a binding contract, the sellers are still free to entertain other offers.
The sellers' agent has an obligation to present all offers until he or she has written approval and acceptance of your offer.
Yes, it is very frustrating. This is something that your real estate professional should have explained to you.
The reason banks/lenders take longer to respond is because everything has to be approved by their board of directors. They are overwhelmed right now with all of their short sales and foreclosures.
My suggestion is to meet with your real estate professional and discuss your options. Since you do no have a binding contract yet. You are welcome to cancel escrow and move on. If you love this home and willing to compete with other buyers including investors, you have to be patient and be prepared to be more competitive.Answer: The unfortunate thing is that you gave them to much time to ...
The unfortunate thing is that you gave them to much time to accept the offer. I would give them no more than 48 to 72 hours to acceptoffer or I walk and find another one.
If you know that the property is well below market value you can ask the agent to retract the offer for a higher offer but do not give them so much time to shop your offer around with other buyers specially if you are really interested in the property.
Make sure that the agent puts in a copy of your pre-approval letter with the deal so the bank can see that you are serious and ready to do business.
220K in California is hard to believe.
Good LuckAnswer: This is one downside of dealing with short sales. Banks ...
This is one downside of dealing with short sales. Banks will routinely ignore deadlines, and would like to have various offers to entertain. You might be under contract with the seller, but the bank has to approve the short sale. Until you receive the letter of acceptance on the short sale from the bank, you are not under contract.
The sellers agent is doing what the lender wants, showing the property, getting offers, and the lender pulls the strings. The lenders wait so long because they can, they are already losing money, they don't stand to lose any more, so they are trying to look at as many offers as possible.
Part of the reason I despise dealing with REOs, buyers like you think the Realtor is doing something shady, and we are just doing as directed by the seller (the lender).Question: Can I get a great deal on a house using a "short sale" at this point in time?
Title says it all.
Are short sales hot right now? Can I get a good house for significantly under value by using one of these?Answer: There are some great deals on Short Sales right now. Short ...
There are some great deals on Short Sales right now. Short Sales can take a little longer to close than a normal home purchase. The Bank is the seller and sometimes they move at a slower pace. Short sales are not always the best deal, check with a good Realtor in your area and see if there are other homes that may be better for you. Make sure you pick a good location, location is everything in Real Estate.Answer: Significantly under value? Probably not.
Lenders obtain ...
Lenders obtain appraisals and Broker Price Opinions to determine current market value, and are in a position to hold out for their price. |
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