Britta Rivera Venture

CHICAGO REAL ESTATE NEWS & MORE

TIPS ON SELLING A SHORT SALE….HOW BEST TO GET BANK APPROVAL; IS NOW A GOOD TIME?

HOUSE PHOTOPrior to the housing market crash back in 2007, most had not heard about a Short Sale nor understood what it meant.  This includes real estate agents, attorney’s, and struggling homeowners.  However, as the home prices continued to decline and the economy crumbled, many sellers and agents soon became familiar with how a short sale could help.  Is now a good time for a short sale?  Read below and you will see that it certainly is the BEST time to get it done.

During the past several years millions of homeowners have successfully completed a short sale transaction.  There are simple tips to make sure your short sale is approved by the bank and that it goes as smoothly as possible.  The main ingredient is securing a real estate agent knowledgeable of the short sale process.  Using an experienced agent who works with a real estate attorney and/or negotiator can significantly increase your chances of approval.  I have successfully completed many short sales and although they all have different challenges, my knowledge has helped in getting them approved.

The first step is to list your home with a real estate agent experienced with short sales; banks will not begin the process without a qualified buyer.  Your real estate agent should price the home according to the current market, not based on what you owe.  The goal is to sell your home quickly, but at a fair market value which a bank is most likely to accept.  Pricing of a short sale property tends to be about 20% – 30% below comparable market value properties and it will be verified through a bank ordered BPO (Broker Price Opinion).

Another important factor is to use a real estate agent who truly cares about helping you.  If they are just in it to make a commission check, they’re probably not the right choice.  Agents also need to be very accessible, since the short sale process is timely and banks expect quick responses to requests.  A good way to test an agent is to call them and time their response time, if they take days to get back to you, move on.

As a seller you also have to be flexible and very willing to supply all required documents to the bank.  This will typically include; a hardship letter, recent tax returns (past 2 years), last 2 paycheck stubs, profit/loss statement, bank statements (last 3 months), real estate listing agreement, copy of the contract, and misc documents.  Have these items ready and available for submission up front to streamline the process.  If you use an experienced agent they will help with this process.

Finally, learn the facts about a short sale and consult with your accountant about the tax consequences.  This video can help and should be viewed in advance.   It is also important to note; The Mortgage Forgiveness Debt Relief Act and Debt Cancellation  was extended through 2013 and can save you thousands.  If you are considering a short sale…do it now!   Because if this act does not get extended again this year, qualified sellers will feel the effect.

What is a Short Sale?

  • A short Sale is a sale of real estate in which the proceeds fall short of the balance owed on the property’s loan. In simple terms, your home value is no longer above what you paid for it, so banks may allow you to sell it for the current market value.

How long is the Short Sale process?

  • Many have heard that short sales are complicated and take months to close.  Well, in some cases this may be true, but the process can be simplified when using an experienced short sale real estate agent, short sale negotiator and/or attorney.  A negotiator or attorney has relationships with many top banks, which allows them to know exactly how to present the offer.  They also have the time required to stay on top of your file and streamline the process.

Who qualifies for a Short Sale?

  • Who truly qualifies for a short sale may surprise you.  It is not only the homeowner’s who have fallen behind on their mortgage payments.  In most cases it is anyone showing the financial inability to catch up on their payments or who may fall behind in the near future could qualify.  The banks will require a “hardship letter” which explains why a homeowner may qualify.  It could be due to illness, divorce, job loss, relocation, excessive debt or other similar situations.
  • Bottom-line, if you cannot sell your home for what you currently owe on the loan and are suffering from a hardship, it would be wise to seek help.  Chances are you may qualify for a short sale.  It is better to find out now, then to wait for the foreclosure to occur.

Short Sale challenges

  • Make certain to continue paying your assessments & real estate taxes.  In the event you fall behind on your assessments, your HOA can cause you to lose your home using their rights according to the bylaws.
  • Make certain your homeowners insurance is kept current.  If damage occurs during the process and you are not covered, this will cause more issues.  Also if you have moved out, keep your heat on to avoid pipes bursting and causing water damage.  You are responsible for the home until the new buyer closes.
  • Do not apply for a loan modification or bankruptcy protection during the short sale process, or it will cause issues.
  • Speak with you tax account to request information on possible penalties due to your short sale.   Also ask about The Mortgage Forgiveness Debt Relief Act and Debt Cancellation which was extended through 2013, and can save you thousands!
  • BRV along with other short sale companies cannot guarantee your short sale will be approved.  It is our goal to assist in getting bank approval, but are unable to advise you on accounting and/or bank default penalties, or any other outcome due to your short sale.  Seek legal advice in advance.

NEED ASSISTANCE WITH YOUR CHICAGO SHORT SALE?  CONTACT BRV TODAY FOR YOUR FREE SHORT SALE CONSULTATION.

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July 7, 2013 - Posted by | CHICAGO REAL ESTATE | , , , , , , , , , , , , , , , ,

1 Comment »

  1. I feel this is one of the most significant info for me. And i am glad studying your article.This is a great article.

    Comment by short sale processors | October 23, 2013 | Reply


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