From Short Sale to Sold!

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1 From Short Sale to Sold! Donna Bosze, Realtor 4016 Raintree Road Chesapeake, VA Phone Fax

2 What is a Short Sale! When you owe more on your mortgage balance then you can sale your home for in the current market. The difference between the Mortgage Balance and the Current sold price remaining amount is called the deficient amount.

3 IT S NOT TO LATE!!!! If you re behind on your mortgage payments or in foreclosure I MAY be able to help you!

4 Required Documentation Hardship Letter - explains your story to lender. Two months most recent pay stubs- or letter of explanation for unemployment. Copy of most recent mortgage statement- or payoff statement. 2 years Tax Returns (if self employed with Schedule C)- or letter of non filing explanation. Authorization to Release Info permission to discuss transaction. Financial Statement- Outlines your current assets and debts.

5 Guidelines for Short Sale Approval! Must be Insolvent- more money going out monthly then coming in. Must have real Hardship- divorce, job loss, relocation, military PCS, in ability to rent, etc Must be cooperative and patient- Process can take from 2-6 months or longer (possible 1 year) from start to finish. Must have no Equity- market price less fees should be less than current market value. Owner can not receive proceeds from sale unless it is a HAP approved file.

6 How to get started: Homeowner to call lender to request short sale package. Gather Basic Documentation. Complete listing agreement. Get property ready to be shown. Complete bank short sale package when received. Submit Short sale package with all documents, listing contract, copy of MLS listing, Market Analysis, and repair estimate. Wait for pre approval. Submit again with new contract when received. For Short Sale approval.

7 Pricing a Short Sale Your list price on a short sale should start 10-15% lower than current market value. With further price reductions every 2 weeks as needed until an offer is received. Bank will not do anything to stop a foreclosure if you price lower than market value you can compete with foreclosures to obtain a quick offer. Bank will order a Brokers Price Opinion BPO only once an offer has been received. Bank has final approval on price and terms.

8 Benefits of Short Sale Processing! I act as a short sale middleman! Fight with bank on your behalf! Exceptional follow-up! Proper pricing! Effective Marketing! Settlement Service provider. Staff Attorney will explain Alternatives, Legal issues and Tax Consequences.

9 Pros and Cons of Short Sale PROS: CONS: Avoid Foreclosure. Retain a better credit score. Ability to repurchase sooner. Limited loss in income compared to renting the home. Peace of mind once sale is complete. Better option than foreclosure. Credit score to drop based on late payments only. May have deficiency Judgment up to 2 years after sale. Can be Taxed up to 2 years after by Can take 2-6 months or even longer. Can not receive proceeds from sale.

10 Foreclosure vs Short Sale FORECLOSURE: Credit Score reduced dramatically points. Foreclosure is reported on credit report up to 10 years. Eligible to repurchase a Fannie Mae backed mortgage for 5 years or more based on lender guidelines. Investors- 7 years. Difficult to find a rental home or obtain credit because of damaged credit. SHORT SALE: Credit score reduced on late payments, shows mortgage paid in full. If short sale was due to a Fannie Mae backed mortgage can be eligible to purchase in 2 years from short sale based on lender guidelines. Easier ability to acquire rental or obtain credit. Short Sale has no effect on a security clearance. Security Clearance can be revoked or marked as ineligible.

11 All About Offers The real time lines will not start until bank receives an offer and orders a BPO broker price opinion. The Bank may reject an offer or counter an offer. It may take more than one offer to get the home sold! Early buyers may not be as patient and may pull out of a contract prior to bank approval! Easier to market a preapproved short sale than non. Bank has power and makes ultimate decision on pricing and terms! Seller will either except or reject terms!

12 Because it takes so long we need to keep watching the mail for Notice of Default this is the initial foreclosure notices. The Bank Short Sale Dept has no communication with the Foreclosure Dept. So applying for a short sale does not stop foreclosure and will not stop collection calls from lender!!!!

13 You can not quit! This will be the biggest headache! You must give bank everything they request even when they request it more than once. Be prepared to wait!!! Be prepared to play phone tag with the bank worker- asset manager. You can not say forget it and just give upcommit to see it thru. Be prepared we may need to go thru more than one offer. Buyers pull out, Bank may disapprove price, etc Be patient!

14 Qualities of a Short Sale Seller 110% MOTIVATION! Dedication to process! Must be Cooperative and Compliant! Must be Attentive to the process!

15 LETS get it SOLD! Are you ready to take control of your future! Let s get started! LET US HELP YOU TURN YOUR SALE IN TO SOLD!!!

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