Cascade Real Estate Team serves "Short Sale" service
Cascade Real Estate Team prepared a quick brochure about Short Sale Guide to help our customer's basic understanding about short sale transaction. Please enjoy our online contents here or you can download this PDF brochure to print for your own.
Contents:
1. Who We Are. And Who We Are Not.
2. You Have Options. What Are They?
3. What Is A Strategic Default?
4. What Is A Lis Pendens?
5. What Is A Short Sale?
6. What Is The Short Sale Process?
7. What Are The Costs Associated With A Short Sale?
8. How Does A Short Sale Affect Credit?
9. Is The Short Sale A Guarantee?
10. Will I Get A Deficiency Judgement For The Balance?
11. Will I Be Taxed On The Balance If There Is No Judgement?
12. I Have Two Loans. Can This Still Be Done?
13. How Can We Help?
Contents:
1. Who We Are. And Who We Are Not.
2. You Have Options. What Are They?
3. What Is A Strategic Default?
4. What Is A Lis Pendens?
5. What Is A Short Sale?
6. What Is The Short Sale Process?
7. What Are The Costs Associated With A Short Sale?
8. How Does A Short Sale Affect Credit?
9. Is The Short Sale A Guarantee?
10. Will I Get A Deficiency Judgement For The Balance?
11. Will I Be Taxed On The Balance If There Is No Judgement?
12. I Have Two Loans. Can This Still Be Done?
13. How Can We Help?
Download a PDF Brochure -> |
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What Are Your Options
The following options in no way indicates a specific order to follow. Obviously you want to ensure you are making the right decision based on your personal circumstances.
1. Get Current - You might be facing a temporary scenario where you may be able to get all your payments current. If you can speak with your lender direct and find out the delinquent amount. Keep in mind you may be able to negotiate any late / attorney fees. Just be sure to get any agreement in writing and signed first.
2. Short Sale - The Short sale will be explained below and throughout the remainder of this book.
3. Bankruptcy - This will depend on the state and type of bankruptcy. Some bankruptcies may not include the real estate. It may be ideal for you to speak with a bankruptcy attorney. Ideal for borrowers who have other types of delinquent debt like credit cards, car payments, etc.
4. Repayment Plan / Forbearance - Designed so borrowers can pay back delinquent mortgage payments over a specified time period. Usually ideal for a borrower who has had temporary hardship, on their way to recovery and has a desire to stay in their home
5. Loan Modifications - Are essentially how it sounds. It is when the borrower and lender work together to come up with a compromise and modification of their loan so the borrower can continue paying the mortgage and in good standing. This could include an extension of an amortization schedule say from 30 years to 40 years. Or extension of a balloon payment. Or change in the interest rate in order to lower the monthly payments. And... In an ideal scenario for the borrower, all of these including a principal reduction.
6. Deed In Lieu Of Foreclosure - This is when the borrower voluntarily deeds the property back to the bank. This option the bank could still go after a deficiency judgement. So if a borrower decides to go this route, then be sure they get it in writing they will not pursue a deficiency judgement.
7. Foreclosure - This is when the bank takes the property back. The bank can still pursue their rights in many states to a deficiency judgment. Meaning come after the borrower on the difference in the amount owed after the lender sold off the property. This could include closing costs, attorney fees and back interest.
Strategic Default
This is when a borrower purposely stops making payments on their loan. Usually those in a strategic default have the financial capability to pay the loans. This many times is used by real estate investors who got over leveraged by not knowing what they were doing. Or certain partnerships went bust. Many investors will run the long term numbers to figure if the ROI (Return On Investment) is worth keeping the asset (or bad asset) in their portfolio. They maybe so underwater or the market may have dipped so low that it may make more financial sense to do a strategic default.
More Difficult - In our experience they are much more difficult as the lenders still want to review financials and hardship.
However, many times their personal financial statement looks ok and there is no real hardship. And... They have to 100% be honest and disclose all accurate reporting regarding tax returns, profit and loss, bank statements, etc.
What Is A Lis Pendens?
A Lis Pendens is a pending legal action and or formal notice. This is usually the first step in the foreclosure process. Meaning the bank is initiating moving forward with a foreclosure. If you are in default already and haven’t been served this by the courts, you likely will. So time is of the essence.
What Is A Short Sale?
Simply put. A short sale is when a lender(s) agrees to accept less than what is owed to them through by means of a real estate sale to a new buyer.
What Is The Process?
1. You meet with our team to talk in detail any and all questions that you have.
2. We will provide all paperwork to you that will need to be completed prior to starting the process. The paperwork may seem a little overwhelming but it is very comparable to all information that you submitted when you were originally getting a loan.
3. The short sale package must be completed in its entirety. Additional and sometimes redundant material may be needed throughout the short sale process.
4. The package includes the listing agreement which allows the broker to list the property for sale, subject to the lender’s approval.
5. The property will be listed and marketed on the open market to draw in an acceptable offer.
6. The release form will be sent to the lender to show who is working on behalf of the seller and allows us to communicate direct with the lender as well.
7. The offer will be executed but “subject to the short sale lender’s approval as well as the seller’s review and approval of the short sale lender’s approval letter and terms”
8. The entire package with the sales contract will be sent to the lender. Our team will follow up weekly in order to expedite this process that usually takes 2-4 months (more or less). Everyone must be patient during this time.
9. The lender will review the package and / or ask for additional information at this time. The lender will also higher a third party to provide a valuation in the form of an appraisal or BPO (Brokers Price Opinion) which you will need to allow access.
10. The lender will counter offer the buyer’s offer or if the value is close to the BPO, they may accept it as is.
11. Once agreed and accepted by all parties, the lender will issue a short sale approval letter which will break down the closing date, purchase price, buyer’s names and any additional terms. This is also where we will know if the lender will waive any deficiency judgments for the borrower.
12. Assuming the letter comes back suitable, we move forward to closing with the title company. Buyers and sellers will have paperwork drafted for signatures and the closing will take place like a traditional real estate closing. You will have to prepare for move out, etc.
13. We can assist you in finding housing here locally if you wish.
What Are The Costs?
A short sale traditionally doesn’t cost you anything. This of course depends if we need to hire an attorney to represent you and help to expedite this process. This can depend on state laws as some states require an attorney to handle this short sale procedures. This to be discussed when we meet in person.
For more information, you can download our brochure and learn more about it.