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Short Sales

Can I make a counter offer to the bank when doing a short sale?

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Question: I made an offer to short sale a home. Now after all the months of waiting, bank couter offered my offer. Can I counter offer or do i have to just accept the price the bank wants for the short sale home?

Answer: -Absolutely…a lot of being successful in this business is your ability to negotiate. Your ability to negotiate and negotiate well literally will make you thousands more or cost you thousands. If they countered with a higher price, this means they believe the house is worth more than what you proposed in your offer. You will need to explain to the lender why you believe it’s not worth that and you’ll have to back it up with comps, repair costs, market conditions, pictures, etc. You may need to even ask for another BPO (Brokers Price Opinion). Now…if it’s only a few thousand dollars and your end buyer is all lined up and as it is you stand to make a large profit from it, you might want to consider just doing the deal and moving on to the next one. You don’t want to wait another 2 months before they accept your offer because you might lose your buyer.

short-sale, foreclosure, or bankruptcy… what should I do?

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Question: Looking at short-sale, foreclosure, or bankruptcy… only is Social Security Disability, VA Disability (100%), and disability insurance monthly payment… what should I do? can they come after any of my income in a deficiency judgement? will they even come after me? how will bankruptcy affect me… I currently have NO assets at all except for about 15,000 dollars in savings. thanks Tom from FLORIDA

Answer: -Tom, I have to make the assumption that you’re planning on or you’ve already stopped making payments on your home or you wouldn’t be asking these questions. A short sale in my opinion is by far the best option if you can’t sell your home for what’s owed, rent it out or can’t work out something with the bank like a forbearance or loan modification. A short sale will affect your credit but will eliminate a foreclosure on it. If done properly will also eliminate the possibility of a deficiency judgment. If a short sale is not accepted an ultimately your home ends up at the foreclosure auction, then you will either receive a 1099 or they will file a deficiency judgment against you. If they file a deficiency judgment and you can’t pay, they can garnish wages. Depending on the amount of the judgment, this forces most people to file bankruptcy to eliminate the judgment.

My home is awaiting bank approval of a short sale.

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Question: If I declare bankruptcy now with regard to my other debts, will it prevent the short sale from going through?

Answer: -Yes, for only a short period of time.  Eventually it will foreclose. Bankruptcy only postpones an auction or short sale which buys you more time. In fact, many short sale investors will use bankruptcy as an option if they need to buy more time so it doesn’t go to auction, as long as it’s in the best interest of the homeowner.

Orlando short sales, need urgent help!

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Question: I live in Orlando and I recently got engaged. I am now in a position where I would like to move in with my fiance and sell my property. I have 2 properties that I would like to short sell, my house and a condo. Both properties are obviously not worth what they used to be and I can’t sell either of them for what I owe. I just got a general appraisal on the house today and it is approximately $56,000 less than what I currently owe. I have called both of my banks and gotten the requirements of short sell. My banks are BOA for the house and Wells Fargo for the condo. The bank states that your mortgage should be 31% of your income, mine is closer to 55%. The problem is I believe that in order to sell both properties, I will have to do 3-short sells at one time, one for my house, one for the condo and one for the line of credit or 2nd mortgage for the condo in order to prove hardship.  Does the fact that my mortgage is 55% of my income help me prove financial hardship? Can I short sell my condo to my fiance before we get married? Should I consult a real estate attorney or an agent for help? Any help on this would be greatly appreciated. Thank you!

 

Answer: -55% is a lot, but may not prove financial hardship, unless you’ve had a loss in income or increase in bills or something like that. You can short sell you home to anyone you want as long as they are not related, “arms length” does have some grey area, but that’s your call.   You also risk not getting the short sale approved in which then your home will go to auction and then the 2nd may file a judgment against you for the amount they lost. But if that’s your best option then, yes a short sale is a great route to go. I would definitely seek help from an agent if you need to find some buyers…or investors in your area would probably love to do a short sale on them.

What is involved in a short sale?

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Question: What is involved in a short sale?

Answer: -This is a great question…the short sale process involves several steps. First the homeowner falls behind on payments because of some hardship or challenge and can no longer make payments. The house is over leveraged, so the loans are more than what the house is worth, so it makes it near impossible to sell.

If you are the homeowner, here is what is now involved in a short sale…

Homeowner – Buyer/Investor/Agent approaches you to buy your home for less than what it’s worth. You have to concent or authorize buyer to talk to lender about loan(s). You will fill out some paperwork describing your financial hardship, describing your current financial condition, and most likely you’ll also provice some pay stubb’s if you’re employed, bank statements, W2’s, etc. You will be asked to cooperate fully with the buyer to get the short sale pushed through. Once the offer is accepted, you’ll have to sign some more paperwork basically disclosing to you the terms of the short sale agreement and you’ll go to closing and be done. Then you’ll have to move out of your home if you haven’t already. Then the bank will either 1099 you for the difference they lost or they can file a deficiency judgment against you. But a good short sale expert can eliminate the whole deficiency judgment option all together, so really you just have to worry about the 1099.

If you are the buyer or investor, this is what is involved in a short sale…

Buyer/Investor – First you will fax the authorization letter to the bank, the homeowner just signed and wait 24 to 48 hours. Then you will request a “short sale” or “workout packet” from the bank. In the packet will be everything the lender requires in order to accept a short sale. Fill it out completely and make sure you include everything the lender requires. Once everything is filled out, send it back to the lender and start looking for an end buyer. If you already have your list of buyers, call them up and let them know about your deal. You’ll use wet funds to close your deal and sell the property to your end buyer. You make your money and do it over again.

We have a home in NY that we were unable to sell and will be going into foreclosure after trying to get the loan modified and bad renters.

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Question: We have a home in NY that we were unable to sell and will be going into foreclosure after trying to get the loan modified and bad renters. We currently live in PA and the PA house is paid for…will they come after me for the deficiency, put a tax lien on the PA residence or 1099 us? Thank you for your help.

Answer: -Typically they can’t come after your other assets because the loan was created based on the properties value which was collateral for the loan. So in the event you didn’t follow through with the terms, they could take the property. Now with that said, yes they can file a judgment against you which would affect your “assets” because you would have to pay that back or file bankruptcy. It’s more common that they would 1099 you for the amount they lost but you never know. They best way to counter a deficiency judgment is to do a short sale and get it accepted as full satisfaction for the loan. This means they give up their rights to go after the homeowner for a judgment. All they can do is issue a 1099. So I would definitely try to do a short sale because it also helps your credit.