FAQ about Short Sales

08 Jul 2009 at 11:10

Chuck

As a Realtor specializing in short sales I sometimes forget that short sales in general have only became commonplace in the Ashburn and Leesburg area for only a few years now. As a matter of fact I remember a conversation I had with a Denver Re/Max agent about how many short sales there were in his area about 5 years ago. I can remember thinking to myself how glad I was that we weren’t seeing them in Loudoun and Fairfax County. Well that’s all changed! I’ve read statistics that report that nearly 60% of all homeowners who purchased a home in the Loudoun and Fairfax area are upside down. The last Northern Virginia economic conference I attended we were told that home prices are now at April 2004 levels. I don’t think it takes a great deal of insight to know that there are a lot of people who can you use some short sale advice.

So, let’s get down to those questions!

•    Is there a difference between a short sale and a foreclosure?
o    YES! A foreclosure will not just hurt your credit but will impact any background checks you need done for employeement. If you are even thinking of needing a security clearance a foreclosure is not something you want or need! If successfully done a short sale has much less impact on your overall future.
•    Short Sales never work!
o    This is the single biggest reason I hear most sellers just giving the keys to the bank. Simply giving up and leaving their fate to whatever the bank decides to do either now or in the future. For the most part the process for a seller is actually less painful in a short sale then a normal sale. Think about it, one of the most stressful parts in a normal transaction is the negotiation of the sales price and all the nonsense that goes along with it. In a short sale the buyer is working directly with the bank and the bank pays all fees including Realtor commissions and any improvements that might need to be done. It’s a no brainer if you are upside down and need to sell!
•    Do I need to hire a Lawyer to help negotiation with the lender?
o    NO. Some Realtors are using lawyers because they don’t want to deal (or are too busy) with the lenders directly. I personally handle all my cases. I feel it’s the best way to ensure my clients a level of service I can be proud of! And anyway, aren’t there enough ambulances for lawyers to chase?
•    I’m an investor will a bank approve me for a short sale?
o    Of course they will. Banks in general do not want your house PERIOD! A lender would like nothing more then to take a small loss up front then have to go to court to get your house.
•    I have two trusts is there hope for me?
o    If you had asked me this question before I took the CDPE –Short Sale Expert course I would have said no way. Two banks are impossible. Well, that was then and this is now! Two trusts are sometimes easier then one. For the most part if your house goes into foreclosure the 2nd lender gets nothing! This is great leverage when it comes to working with these lenders. Its also helpful that most of the lenders who specialized in 2nd trusts are either out of business or have written off most loans to very low levels.
You got more questions? I’ve got answers! Leave your questions and I’ll update this post with your questions.

Take care,
Chuck