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Real Estate Short Sale Questions and Answers |
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Question: Short sale?
What is the difference between a "short sale" and a "foreclosure"?Answer: A short sale home means that the owner still has possession, ...
A short sale home means that the owner still has possession, a Foreclosure home belongs to the bank...Answer: A short sale is an agreement between you, the lender and the ...
A short sale is an agreement between you, the lender and the buyer to sell the property for less than owed.
The lender will usually require the borrower to submit a lot of information to the lender in order to consider the short sale. The information required may include:
? Income documentation such as W-2s and pay check stubs to verify the borrowers? income.
? Bank statements to verify the borrowers? assets
? Hardship letter ? this letter will describe for the lender the reasons the borrowers are in the financial position they are in and will ask the lender to accept the short sale. Borrowers should make this letter sound as sad as possible and back up the story with any documentation you may have such as medical bills, etc.
? Fair market value for the property ? depending on the lender they may require an appraisal or may accept an opinion from a local Realtor know as a Comparative Market Analysis (CMA).
? Preliminary proceeds sheet from the sale of the property. This will show the proceeds of the sale of the property after the mortgage is paid off and all other closing costs and fees are paid. This will be negative in the case of the short sale and this negative amount is the amount of the shortage.
? Listing agreement and purchase agreement when they are available.
A foreclosure is a legal proceeding that the lender needs to exercise to take the property from you
If your property is not sold or the purchase is not enough to cover the lender?s loan, a deficiency judgment could be pursued against you. A foreclosure and a deficiency judgment will seriously hinder your prospects to obtain real estate in the future.Answer: A foreclosure is what happens if you don't sell your ...
A foreclosure is what happens if you don't sell your house by the time a foreclosure date arrives. This has a severe negative impact on your credit.
A short sales is a process that allows a homeowner who is over 90 days behind in payments (the pre-foreclosure period) to sell their home, avoid foreclosure and help keep a foreclosure off of their credit.
A short sale is done when someone owes more on a property than they can sell it for. In the current market conditions (in many parts of the country) short sales are quite common. The challenge is that up until a year or so, there was not a big need for short sales because many homeowners could sell there properties, even if they where behind on payments, because the real estate market conditions were good. Not so today. The challenge with a short sale is to know the process, and it really is just a process, so that you can actually have a short sale "accepted" by a bank. The key is also to have a buyer of the house that is being "shorted" who can close (A ready, willing and ABLE buyer)
This is just a start but should give you a very high level understanding of what the differences are.Question: open escrow on a short sale?
I placed an offer on a property knowing before hand it was a short sale. Both parties have agreed on the terms of the contract but the seller's agent has stated that he won't send the offer to the lender until we open escrow. Is this customary? Is there a benefit in opening escrow before sending the offer to the lender or before agreeing on a price with the lender? Any advice will be appreciated!Answer: I would not do it that way. Even if the seller and buyer ...
I would not do it that way. Even if the seller and buyer agree the lender needs to agree for the contract to go forward so what benefit is it to open escrow? Ask him he sounds like he is jumping ahead.Answer: Good finance question! I know of an organization that gives ...
Good finance question! I know of an organization that gives up to $1500 to people to help them with their rent or mortgage. It's available in most US cities, I highly suggest you check it out.
http://www.assist-with-your-rent-mortgage.org
Best of Luck.Question: If I do a short sale on my home could I have good enough credit to turn around and buy another home?
Answer: Only if the bank doesn't report the shortage as a ...
Only if the bank doesn't report the shortage as a default. you would need some pre arranged agreement with the lender.Answer: WTF.
Why would ANY lender take the risk again?
LETS ...
WTF.
Why would ANY lender take the risk again?
LETS JUST GET THIS STRAIGHT. YOUR ARE A BAD RISK. I don't what the reason is (and I'm sure there is a whole story behind it). You got a mortgage on your home. You promised to pay it and didn't. Period.
Why would a bank give you another loan?Answer: Don't take offense to this, but WHY would you want to ...
Don't take offense to this, but WHY would you want to turn around and try to purchase another house, if you couldn't afford the one you're about to go into foreclosure on now?? It just doesn't seem like a rational thought to have.Answer: Technically, yes you may - ONLY if the lender doesn't ...
Technically, yes you may - ONLY if the lender doesn't report the short sale as a charge-off, default, etc. And, assuming you didn't have any recent late payments on the mortgage.
Realistically - what in your right mind makes you think it's a good idea to turn around and buy another home? You just proved to yourself and your previous lender that you are not responsible enough to handle a mortgage - whatever the reason is for the short sale. Take your time to get your finances together, and then buy another home later down the line.Answer: NO. Don't try to kid yourself on this, and I'm not ...
NO. Don't try to kid yourself on this, and I'm not going to sugar coat it. No lender is not going to report the short sale, period. Your credit score is going to take a big hit on the short sale. There are loans that aren't based on credit score, but PMI is, and unless you have 20% down, you are going to need PMI.Answer: I was once in your situation. Don't worry, everything ...
I was once in your situation. Don't worry, everything will work out for you =)
A year ago I found this organization that gives people up to $1500 in renter or mortagage assistance! They operate in most US cities, I highly suggest you try to get some of this money.
http://www.help-house-mortgage-rent.org
Good Luck!Answer: why not just walk away and do a L2P wrap with a seller. You ...
why not just walk away and do a L2P wrap with a seller. You would not need credit and you can just make their mortgage paymentsQuestion: is it normal for a house in short sale to sell above its listing price?
above or exactly at listing price?, please tell me what you think about this house http://www.ebby.com/details/-2333881.html
in this particular case there were 6 offers, so tempted to offer exactly listing priceAnswer: It is unusual but it can happen if there are multiple offers ...
It is unusual but it can happen if there are multiple offers (2 or more).Answer: I would so no, not normal. But not impossible either.
I would so no, not normal. But not impossible either.Answer: That isn't much of a short sale, it assesses at 273k and ...
That isn't much of a short sale, it assesses at 273k and is too new to be valued much over that, if any at all.
I buy short sales and have run into multiple bidders only recently and only for homes priced at 60% of value. The last one paid 80k over the initial asking price. The sellers price them so low on purpose, to generate the bidding wars that occur.
Most short sales go for the asking price because that is the amount the bank has already pre-determined they were going to loose on the deal.Answer: It happens. Someone falls in love with the house or ...
It happens. Someone falls in love with the house or doesn't want to miss out on a good opportunity.
But the vast majority of buyers offer below asking price.
Good luck to you! It's a beauty.Question: Am doing a short sale of my house, can I rent an apartment after forclosure or short sale?
Answer: Yes, if you show a landlord that you have a job and can make ...
Yes, if you show a landlord that you have a job and can make the rental payments you should be OK. You may be turned down for a few, but someone will rent to you. Dress well when you apply, make sure your car is clean, speak well and be polite. If you can present a letter from your employer that you are a good employee that may help.Answer: Step 1:
Verify the value of your property. If you are ...
Step 1:
Verify the value of your property. If you are selling the property through a real estate broker, your broker will provide you with an estimate of market value. If you are selling the property yourself, do your own market analysis of the area and your property.
Step 2:
Add up all the costs of selling the property. If you are using the services of a real estate broker, the broker will provide an estimate of closing costs. If you are selling the property on your own (for sale by owner), call a local title company or real estate attorney and ask, as a seller, what the closing costs will be.
Step 3:
Determine the amount owed against the property. This will be the total of all loans against the property.
Step 4:
Do the calculations. Subtract the total amount owing against the property from the estimated proceeds of the sale. On a short sale, this will be a negative number.
Step 5:
Contact the lender or lenders. Talk to someone in the customer service department and tell them the situation. They may direct you to a specific department. Talk to a supervisor or manager if possible; this person will have more authority.
Step 6:
Ask the lender what its procedures are for a short sale. Some lenders are willing to work with you by reducing the amount owed or making other arrangements. Others will look to the agents involved (if any) or anyone else who's making money off the transaction to see if they are willing to make concessions to make the transaction happen. Still other lenders will tell you that your debt is your responsibility, one way or the other.
Step 7:
Sell the property.
Problems with this:
A lender can report a short sale transaction to a credit bureau.
The homeowner who sells his or her home in a short sale may face a sizeable tax bill based on the amount of the mortgage balance ? even if the lender technically ?forgave? the debt by agreeing to the short sale. The property will be taxed as if it were sold for the total outstanding amount of the loan, or the sale price, if it?s higher. Taxability of the gain and deductibility of the loss depend on the nature of the property.
It may be best to put the home up for rent so you can get a tax deduction because it is a rental and if you have any loss it may be tax deductible.
Renting after Foreclosure
from: http://ezinearticles.com/?Renting-After-Foreclosure&id=658652
One way they can do this is to find a landlord that they know, or talk to someone (friends/family) in the area that in which they want to move, and ask if they know of anyone that would allow apartment rentals without a credit check. The key is for the homeowners to let the potential landlord know that their credit is not great at the present time, and that they are not willing to damage it even further with more inquiries, but that they want to have an opportunity to start recovering their financial situation. A lot of landlords will be reasonable if the situation is explained to them very clearly, and if the former homeowners make a good first impression.
If the foreclosure victims do not know any friendly contacts in the area, though, they will have to offer the landlord an incentive to decide not to pull their credit histories and discover the late payments and foreclosure. For this purpose, they can offer an extra amount as a security deposit, or offer to pay an extra 2-3 months rent up-front, in exchange for the landlord not conducting a credit check. The offer of more money is a very powerful incentive for landlords. |
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Bank Foreclosure
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