Short Sales Category
B of A focusing on Short Sales
In an effort to deal with distressed properties prior to foreclosure Bank of America is adopting Equator, a short sale module that will enable borrowers and short sale agents to submit documents and check status online 24/7.
The Equator Platform, formerly REO Trans, is a web based electronic system designed to automate the short sale process and improve communication and approval timelines.
In another sign that short sales are increasingly becoming the preferred method of dealing with properties at risk of foreclosure it is reported that B of A has expanded its personnel in the division handling this type of transaction.
With short sales typically resulting in a higher net sales price look for this type of system to be adopted by other major lenders.
Sphere: Related ContentAttempt Loan Modification before a Short Sale
Short Sales, The Art of Selling
Before rushing into any short sale we encourage those having trouble making their mortgage payment to consider attempting to negotiate a loan modification with their current lender. It’s possible that an agreement can be reached thats a win-win for all concerned. If you are in this situation please take the time to educate yourself on the options available.
The first thing you need to know about loan modifications is that help is free. Don’t fall victim to one of the many scams that target homeowners going through tough times. You should never be asked to pay an upfront fee for counseling and absolutly never be asked to sign over the deed to your home.
If you are struggling to make your house payment there may be help available to you under the Making Home Affordable program. This plan is designed to assist millions of homeowners who purchased their homes prior to January 1, 2009 with a first mortgage of $729,750 or less and a PITI payment that exceeds 31% of the family gross income.
Keep in mind that eligibility is not the same as approval. The successful approval of a loan modification depends on a number of factors including the borrowers ability to make payments at the modified amount.
Read the information on the Making Home Affordable site and feel free to contact us to discuss how to get prepared before contacting your lender with a loan modification request.
Even when successful there are times that the terms a lender may ask for on a modified loan are not sufficient to prevent a hardship. In the event you are unable to negotiate an acceptable loan modification then a short sale of your property may be your best option.
As always we encourage homeowners in this situation to consult a real estate attorney as well as a CPA. If it is determined that a short sale is your best course of action we can meet with you to go over the required paperwork and discuss your situation in detail.
Short Sales: A neccesary evil, sellers guide to success.
Short Sales, The Art of Selling
Whether you call it a pre-foreclosure sale or a short sale it’s pretty hard for sellers to get excited about the prospect of walking away from their investment with no equity and damaged credit. While it may be a hard pill to swallow it is still often the best option to start the recovery process.
If you find yourself in this situation its a good idea to get advice from multiple professionals including your CPA, Real Estate Attorney and perhaps the single most important decision for those who decide to sell their home via short sale, a knowledgeable Real Estate Agent to manage the process. Your Agent will be the person advising you on proper pricing and marketing strategy, negotiating with buyers agents and handling short sale lender negotiations. It’s a complicated process and much diferrant than a typical sale. Select the wrong Agent and your odds of success can be slim to none.
The short sale listing, marketing and escrow process is a specialty that requires a specific skill set, process knowledge and methodology. Not handled properly the opportunity for a successful short sale is greatly diminished and with the bank looming there may not be time for a second chance.
Just as you would not ask your family doctor to perform open heart surgery you should not assume that every Agent is capable of assisting you with a short sale. The fact is that very few Agents have the ability to achive positive results in this highly specialized field.
Using our proven system we have a track record of success in assisting sellers who find it neccesary to sell under these circumstances. Here are a few tips for a successful short sale.
In order to be prepared for a successful short sale it is important that you complete your short sale package prior to putting your home on the market. Hardship letter, financial statement, tax returns and pay stubs are a few of the items required (See SHORT SALE CHECKLIST). These items need to be sent to the lender along with any accepted offer. An incomplete submission to the short sale lender is a recipe for failure. Your Agent should be able to assist with obtaining the necessary forms.
Your initial listing price needs to be based on closed sales of similar homes in the area combined with active competitive listings. Your agent should be proficient in completing a BPO that supports initial listing price.
In order to be successful your listing contract should include a price reduction schedule that results in the highest best offer in a reasonably short time frame. Listing history and pricing is one of the considerations that many short sale lenders review as part of the approval process.
It is extremely important that your agent takes the time to review any purchase offer and negotiate terms with selling agent and buyers prior to acceptance. Contract and HUD should include terms and language most likely to be found acceptable by short sale lender.
As review process by short sale lenders can take from several weeks to months it is very important that buyers have been counselled on the process and have expressed a willingness to be patient and a commitment to the purchase. Buyers who are offering on multiple properties should be avoided if at all possible.
These are just a few basic tips specific to short sales. Please feel free to contact us to discuss your situation in more detail.
Sphere: Related ContentHow To: A Short Sale Guide
Short Sales, The Art of Selling
- Your neighbors need not know that your home for sale is a short sale. The home is marketed much the same as any other home for sale and all references to it being a short sale are in the private remarks section of the listing and only shared with real estate professionals and buyers interested in purchasing your home.
- There is no cost to the home owner to use the professional services of a Realtor to assist with the short sale process.
- A successful short sale will avoid the neighborhood trauma of foreclosure and blight and be a much healthier solution for your neighbors quality of life and property values.
- Not all Realtors have the experience or knowledge to successfully assist you through the short sale process.
- Your Realtor should be able to assist you with all the forms and documents required for a short sale, handle bank negotiations, understand how to complete an accurate BPO showing true market value and develop a pricing strategy that results not just in generating a buyer purchase offer but in a purchase offer that is acceptable to the mortgage holder (lender).
1. Authorization to Release Information to Agent. This will allow your Agent to talk with the lender on your behalf.
2. Handwritten hardship letter showing compelling need to sell.
3. Short Sale Listing Agreement.
4. BPO of comparable sales from Listing Agent.
5. Last 2 years W2 Forms all borrowers.
6. Last two years tax returns all borrowers.
7. Last two months bank statements all borrowers.
8. Last two pay stubs all borrowers.
9. Borrowers financial statement. Be sure to accurately list all expenses, as unaccounted discretionary income can be an issue with lender.
10.Detailed estimate for any repairs needed.
11.Fully ratified Purchase Agreement.
11.HUD 1 statement or NET Sheet showing the lender what their NET figure will be and any other expenses owed on the property.
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