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Real Estate Short Sale Questions and Answers |
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Question: need advise on a short sale. and closing cost?
fell in love with this house in short sale. asking 299,999.
Im approved for 350,000
I crunched the PTI and I don?t want to pay more than 280,000. my realtor checked the comp?s and the house priced reasonalbly. She said if I can come up with the closing cost it would help. I was going to put down a offer of 275,000 and have closing cost included. what are the banks point of short sale and I really don?t want to pay the closing cost. any reconditions?Answer: You're going to have trouble--I would see where the ...
You're going to have trouble--I would see where the seller stands before asking these questions. It's beenexperience that you're going to need to either ask them NEAR the asking price for them to want to pay for closing costs, or inquire about closing costs and see how much you would be looking at.
If you can get the house for $275K and have only $7K worth of closing costs, that's going to be a better deal for YOU then paying $300,000 and have it taken care of. It's convient, but it's not going to be beneficial in the long run.Answer: there is no harm in asking for what you want to make the ...
there is no harm in asking for what you want to make the deal work for you.
and be prepared -- lenders hate to come out of pocket [pay cash in] on a deal where they have no upside at all. {the mortgage servicing firm has to get permission to do this from the actual loan owners -- might be 45 or 60 days just to get a response.}
***
here's how to maybe give them an upside -- if your approval is from a different lender, give them a copy of it [including the APR and good faith estimate parts] and offer to let them make the loan instead of this other firm at the other firm's rates. Since that gets them a new, good loan with zero marketing cost and very low closing costs [they might do much of it inhouse with people on salary instead of paying commissions to people] maybe they'll give some on the closing costs end.
{The fee to the then unneeded outside closing agent is included in the closing costs and they can probably get the appraisal and title insurance at wholesale, or even avoid all of that by reworking the existing loan to substitute you for the original debtors.}
there is no harm in askingAnswer: Your Realtor should be answering these questions for ...
Your Realtor should be answering these questions for you....Answer: There are several ways to do that. The first one is the one ...
There are several ways to do that. The first one is the one most used and most deals are closed with seller paying the closing cost.The other one is to have the seller on a personal deal cut you a check back after closing (under the table ) for the closing cost. One other way is to make sure your mortgage broker and or real estate agent have cut there commission down to a fair profit as the points are made from the fees and the rate ..Just make sure your getting the beast deal from both and that alone will save you enough to pay closing if you have to. Just make it simple though its pretty standard for the seller to pay closing cost just make you offer based on that. Good LuckAnswer: You won't be buying this house.
I doubt they will ...
You won't be buying this house.
I doubt they will even counter offer. They will turn this down. Your agent doesn't have a clue if they did not tell you that this would not fly.Answer: If you are looking for a quick house sale then you could go ...
If you are looking for a quick house sale then you could go to a house buying company such as Quck Move Now. They pay up 90% of the value of the house and can turn around in as little as 7 days. Visit the website to find out more.Answer: I have been doing short sales for some time now. Is it the ...
I have been doing short sales for some time now. Is it the bank doing the short sale or is it the seller of the house doing it. The price of 299K is just the asking price. You bid what you want. I typically pay allbuyers closing costs if the deal makes sense and if they usemortgage broker. This way I am fully aware of all surprises and it attratcts buyers when I tell them I will pay those costs. But back to you question. You have no idea what details they have worked out with the bank. For instance this waslast short sale. House worth 350k there was 100k in equity in the house. I was able to work the bank down from 250k to 200k. That ment there was almost 150k profit less other payments. I could of asked for 325k but if someone came in with 300k I prob would have accepted just to flip it quickly. So go nuts. The ball is in your court. You have nothing to loose but everything to gain.Question: What is some of the Facts that Realtor 's are uninformed about in Short sales?
Most realtors disagree on many points who do we believe?Do the rules change from state to state?Is it govern federally?Answer: the details of short sales change
not only from state to ...
the details of short sales change
not only from state to state, but each mortgage contract may have different stipulations in it about that possible event. [in the fine print, of course].
only the Federal Income tax consequences are uniform across all 50 states. [and those are that the amount of debt forgiven is income to the debtor in the year granted -- unless and until a law is passed changing this.]Answer: Realtors are not taught anything like that in school. They ...
Realtors are not taught anything like that in school. They have to go out and learn everything on their own, so sometimes they get info wrong. But most realtors are so arrogant that they will always insist they are right.Answer: There are no rules, only policies and guidelines of the ...
There are no rules, only policies and guidelines of the servicers, lenders, mortgage companies, and others that might render a decision, and those policies can change from day to day and market to market. Some lenders may take a short time to approve a short sale, others may take months and order several different brokers to do an opinion of value, before they realize that a particular market has "gone bad, value wise."Answer: There are no hard and fast laws concerning short sales. The ...
There are no hard and fast laws concerning short sales. The ONE thing upon which all agree is that you MUST have the lender's approval to get a short sale processed. The lender is basically in control of what happens or does not happen.
The lender holds the lien on the property, and it's their decision whether or not to accept the terms of any short sale offer.Answer: Short sales are more variable because of the banks involved. ...
Short sales are more variable because of the banks involved. PMI (Private Mortgage Insurance) gives the bank the coverage to make up a percentage of the difference between sale price and principle owed. Some banks are lenient others are not. States may also have their requirements but primarily it is the bank who calls the shots.
Considering the fact that only 10% of Realtors stay in the business after 1 year and the fact that the market has changed drastically in the last 1-2 years, it is vital that you thoroughly interview your Realtor and Banker before you make any concrete decisions.
One ofshort sales is contingent on what the bank will allow which is giving us absolutely no flexibility. The other is only contingent on what balance the sellers are willing and able to carry once the sale is made and also what the bank will go along with.Answer: Some of the people who answered your question prove that the ...
Some of the people who answered your question prove that the Realtors/brokers need major help. Let me clear the air. Banks dont authorize the Short Sale, the INVESTOR who owns the note ultimately makes the final decision. Mortgage service providers might have a general guide line but it all comes down to the investor.
Agents don't know how to maximize their commissions. Since I worked at the lender I know how they can get more.
Generally, the agent doesn't know how to protect the seller from exposing assets.
They also have a hard time completing the estimated net sheet (sometimes done by title companies or attorneys) CORRECTLY.
There are so many things they can do better. The worst thing they can do is think they know all there is about a short sale and not educate themselves more.
I have done over 1000 short sales and everyone is different. Agents try to generalize them and make them fit into a box.
Some agents don't know how to negotiate either, some don't know how to offset the 1099. The list goes on and on!
Not all agents are bad. I highly recommend that you interview your agent before you sign the listing agreement and call some of their prior short sale sellers.
If you are an agent, I would speak with a short sale consulting company to make sure all your T's are crossed.
There are also short sale consulting companies on-line that specialize on nothing but short sales. It would be wise to speak to one of them first!
Good luck , and good question!
and NO, its not goverened federally. Each investor has different guidlines that will need to be met b4 the short sale is granted.Question: My landlord stopped making mtg pmts,he says bank will consid short sale. What % of tax apprais should I offer?
This hit out of nowhere, we have a lease on the house through next November and now he tells us that he can't make his payments. He says that the bank will take a short sale due to the current real estate situation here in the Miami area but I don't know if this is the case or not. The house is not worth what he paid for it, I know that for sure, he made a bad investment at the wrong time. He paid over 130K more than the current tax appraisal and the builder is still building new houses in the neighborhood at lower prices than when he bought two years ago. My biggest question now is how to evaluate the lowest legitamate price that the bank would accept given the current real estate conditions in the area. The only hard value that I currently have is the county tax appraisal. So, what percentage of the tax appraisal might the bank accept in a short sale situation? Or, is there a better way to evaluate the best price to offer?
ThanksAnswer: Yes, call a real estate agent (make sure they are working ...
Yes, call a real estate agent (make sure they are working for you as a buyer's agent). Have that person come over and evaluate the price of the house. This should also include looking at selling prices for comparable houses in the area.Answer: The county tax assessment means nothing to a lender. ...
The county tax assessment means nothing to a lender. However, you can get a full URAR appraisal of the house by a licensed appraiser and then offer the bank around 75%-80% of that value. They are likely to take it especially in the Miami area do to the greatly depressed housing market. Remember, banks are in business to lend money not own houses and then have to sell them at a loss.
I you need help email me.Answer: Yes there is a better way to evaluate the worth of this ...
Yes there is a better way to evaluate the worth of this property. The Tax Appraisal's office value is always too high. They are just trying to "collect taxes" so they will establish values which I swear they find in the cracker jack box. Now, seriously, find a Real Estate agent that is willing to work for you. No, real estate agents don't work for the BUYER they work for the SELLER. However, if you contact the local Miami Realtor Board they can provide you with names of agents who will take your business. That way the agent is your employee. He will look out for your welfare. After all if he does not, he doesn't get paid, right? This agent, because of his license, has easy access to much more information, trends and appraisal information than you could get in a month of Sundays. Besides he knows where to look for such. You and I don't. We have to search and peck and only hens get something worthwhile by pecking. Go hire a Real Estate Agent.Answer: Forget the county tax appraisal, it is meaningless in ...
Forget the county tax appraisal, it is meaningless in constructing an offer in this situation. See if you can find out how much he owes. Normally the threshold for lenders is about 88% of loan value. But abnormally in a declining market and with the other new construction factors you mentioned, I would get a good realtor involved to get you some comps. If he/she is good, they should be able to structure a good deal and receive a commission. Look for someone who has had short sale experience.Question: if a house that I cosigned for is going on a short sale and I just bought a house does that affect me?
i just bought the house 1 month ago and the house is only 1 months behind payment
the house that is going to short sale is the one I co-sign for and my house that I bouhgt for is current in payments.Answer: after mortgage co sells the house. they will go to the ...
after mortgage co sells the house. they will go to the signers for the rest of the money. if they do not get it, they will add it to the credit report. The 2nd house will not be affected.Answer: Yes it will, co-signing means that YOU will for fill the ...
Yes it will, co-signing means that YOU will for fill the contract that you co-signed for, if the signer does not make the payments!
If the house fore closes and will affect you if you try to re-finance your own home, or to get any other loan for that matter.
You should contact an attorney to see if you can get out of the contract!
Good luck!Answer: As a co-signer you are also responsible for the mortgage ...
As a co-signer you are also responsible for the mortgage note but it does not affect your current house. If it short sells, the bank has the option to recoup any losses from both of you depending on the amount. This may be done by a lien on your house or making you sign a note or treating the forgiveness amount as income to you and 1099'g the amount to you. More than likely they will be happy to get out without having to foreclose, but each situation varies. It is important to stay in touch with the Loss Mitigation Dept of your lender. If it goes into foreclosure, both of your credit scores are shot.Answer: it will affect your credit by 80-100 points if is a short ...
it will affect your credit by 80-100 points if is a short sale and you will back on track by 18 months but if it goes foreclosure then you are going to be ruin for 10years. good luck!Question: Short sale question?
We placed a contract on a home back in Oct that is subject to short sale. The listing for the home stated the seller will pay all closing cost. We asked for 9% closing because we're getting a FHA loan. My realtor (who is definitely not working for us) came back and said the bank handling the short sale will only give 6% closing help and the rest falls on us. I don't understand why the liability for closing falls on us since the sellers signed the contract agreeing to giving 9% I would think they would have to make up the difference or at least negotiate something with us (the buyers) to split the remaining closing. Any advice or suggestions would be very much appreciated.
Additionally we asked for the pricing to be lower and some broken windows to be fixed. The sellers agreed but the bank didn't and that also fell on us to fix before closing. Less than 2 weeks away with Xmas and New Years intertwined.Answer: speak with your lawyer and if they refuse to comply with the ...
speak with your lawyer and if they refuse to comply with the contract you can back out of it.Answer: They do have to cover the whole 9%. If their bank will not ...
They do have to cover the whole 9%. If their bank will not handle it, then the sellers themselves do. They must uphold the contract that they signed. Just point it out to your realtor that the signed deal states 9%.
Period.Answer: Talk to an independent real estate attorney. Sounds like ...
Talk to an independent real estate attorney. Sounds like you're getting screwed.Answer: When it comes to financing a house...the bank usually ends ...
When it comes to financing a house...the bank usually ends up with the final say unless the buyer and seller can both come to a mutual agreement. Usually, the buyer pays all closing cost so you are 6% ahead of some of us.Answer: Tell your Realtor that they signed a legally binding ...
Tell your Realtor that they signed a legally binding contract and just because the Realtor didn't do their job, you should have to pay for it. You might want to contact a lawyer to get a good reading on real estate contract law in your state.Answer: I have never seen a short sale that did not say ...
I have never seen a short sale that did not say "subject to bank approval", meaning that regardless of what you and the seller agreed to, the bank has the final say. Your realtor probably was correct (you just didn't like the answer); many lenders, especially FHA, will only allow up to 6% back from seller. So stop whining and making like everyone is trying to screw you; just ask the right intelligent questions.Answer: The "seller" of the house will agree with ANYTHING ...
The "seller" of the house will agree with ANYTHING to get out from under the loan he owes on the property so it does NOT MATTER if the seller agreed to this to to that. The BANK is the one getting the shaft here and they are the REAL seller so show me where the BANK agreed in writing to 9%.
The fact is that you ASKED for 9% and the bank COUNTEROFFERED 6%. You ASKED for the windows to be fixed and the price lowered and the bank COUNTERED with "no".
So the ball is in your court now, either reject the bank's counteroffer or accept it but DO NOT cry about the "seller" agreeing to your OFFER and that they should do this or do that. The bank can't get the money out of the seller for the payments they owe so just how are you going to get them to pay for window repairs they didn't have the money to pay for when THEY lived there?Answer: Here is what you don't understand about a short sale ...
Here is what you don't understand about a short sale that your Realtor should have explained to you:
The sellers CANNOT agree to anything that is binding without their LENDER'S approval, because the lender has to approve all terms of the short sale.
FHA will NOT ALLOW 9% closing costs to be paid by the seller....6% is your limit....that is why the bank didn't agree to it because they know that FHA won't allow it.
Don't count on the windows or anything else to be fixed. Short sales are deals and are generally sold as is.
They DO NOT have to split the difference with you.
You would be wasting your money on a real estate attorney unless you contract and need to close. The only problem with your transaction is that your Realtor isn't advising you properly of what you can and can't do...your situation is not complicated
You need a new Realtor...the one you are using has no idea of what she is doing. Anyone who has worked in the industry more than 6 months would know how to do a short sale transaction and some basic FHA guidelines.Answer: With a short sale, the seller can sign the contract, but ...
With a short sale, the seller can sign the contract, but that does not mean anything. The bank has to approve everything. The seller is asking the bank to let them sell their home for less then what they owe, so the bank, if they allow it, is taking a hit on the deal. You are lucky that the bank is even letting you do the short sale. The sellers do not have any money to help you with the closing costs. They are broke!! That is why they are doing a short sale. Why are you asking for 9% in closing costs? You only have to put 3% down on an FHA loan and then closing cost will be approximately 3%, maybe a couple of hundred more depending on the purchase price. FHA does not allow for excessive closing costs to be charged. 6% should cover most of it and if you can't pay a couple of hundred dollars, if needed, then you probably shouldn't buy a home. |
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