Short Sales: A Dignified Solution to a Homeowners’ Financial Crisis

The words “short sale” is  heard a lot, but not really understood by many.  A short sale may happen when a homeowner that NEEDS to sell their home can’t because the value has dropped below what they owe.  The “needs-to-sell” determines who qualifies for a short sale.  The “need”, in the eyes of the lender, is a circumstance or series of events that has made it impossible for the homeowner to continue to pay the monthly mortgage payments. Do you qualify?  These circumstances could be a reduction in income as a result of a pay cut or loss of commissionable income, a job loss, a divorce, a job transfer or new hire out of the area forcing a move; a death of either a family member who is a wage earner, or one who is not, prolonged illness, any serious medical condition causing a forced move, increase in medical bills, sustained medical leave of absence from the work force, or disability.  In many situations there is a combination of factors that when compounded, the homeowner finds his savings depleted and the possibility of losing his/her home a more probable occurrence. 

A short sale may be the best solution after you have tried the other options available to ease your financial crunch.  Seeking advice, from your lender, for a possible refinance, loan modification or forbearance are possible ways to stay in your home while reducing your monthly financial obligation.   Visit www.makinghomeaffordable.gov to research the viability of these programs for your situation.  If those avenues don’t achieve successful results the short sale becomes the alternative to avoid foreclosure. Click here to see what the process is.

How you make your case to the lender?  A critical part is the homeowner’s hardship letter which outlines what happened and what he/she has done to try to prevent foreclosure.  Presenting one’s story in a 100% transparent fashion is the best approach.  The letter accompanies the documentation one assembles when trying to qualify for a loan, however, in this situation, you are looking to de-qualify yourself from your present loan. 

Each case is specifically unique and there is not a hard and fast rule as to who will qualify, with what lender conditions that may or may not be imposed, and who will not qualify. In most situations, the lender does not render his decision to accept the short sale until you receive, execute and submit a purchase contract contingent upon the lender and seller work-out agreement.  Most lenders only want to review completely executed contracts and will not review any partially executed contracts.  Remember this is a sale between a seller, the owner of record, and a qualified buyer with a contingency on seller lender approval, much the way a buyer makes his offer contingent upon a buyer’s loan approval from his lender.  This is not a bank owned property where the bank collects multiple offers and makes a decision of which to select.

Does that mean you could go through all the documentation, showings, negotiations and contract acceptance and either be turned down by the lender or more probably be presented conditions by the lender that you cannot accept?  The answer is “yes”.  However, in today’s climate, lenders are actively interested in working with the homeowners to prevent foreclosures.  Remember,  the lender is in the business of lending money not acquiring property. 

Not all homeowners will either get their loans modified or get an approved short sale and some will still face foreclosure.  However, at the end of the day, it is important that you know you, along with your skilled REALTOR by your side, did everything possible to avoid foreclosure. 

Your REALTOR plays a very critical role in this process and requires special training and acquisition of special skill-sets to understand how to best present your case.  The CDPE designation, (Certified Distressed Property Expert), indicates a commitment to understanding the complexities of the short sale and the knowledge and skill-sets to maneuver through this tedious process.   A highly respected national organization with more than  10,000 members, the CDPE training never stops as the short sale processes within every lender is continuously evolving.  The initial training spans two days and more than 15 hours and is followed with opportunities for three hours of ongoing training monthly through scheduled member conference calls and twice monthly Advanced Webinar training.  Your team to guide you through this complex maize should include your short sale specialist REALTOR, both a tax and real estate attorney, and a short sale trained Escrow officer to act in concert with you to assist you in accomplishing your goal of avoiding foreclosure, as there is a big difference in life without foreclosure as opposed to life after foreclosure.  Look for the CDPE logo before you make your  REALTOR decision.

If you have any questions or would like a referral to a CDPE in your area, contact Sally Scrimgeour CDPE, Coldwell Banker Burnet, serving Eden Prairie, Chanhassen, Minnetonka, Chaska, Victoria and Waconia. AvoidForeclosureMinnesota.

FBI: Stripping Foreclosed Homes Illegal.

 See Video Here
BEWARE! Homeowners who may be facing foreclosure who feel they own their appliances and fixtures, think again. If you take the built in appliances, cabinets, plumbing, etc., it is considered stealing. When you try to sell them, you could face charges for mortgage fraud.

Foreclosure’s consequences not always understood

Few people fully understand the ramifications of a foreclosure, said Sally Scrimgeour, a certified distressed property expert with Coldwell Banker Burnet in Chaska, Minnesota.

Distressed homeowners reach out to solve mortgage troubles.

“If you go to apply for a job and you have had a foreclosure, and that is a question that is asked of you, employers say that is potentially one of the top reasons they rule out a candidate for employment,” she said. “Also, there are some employers who do periodic checks on people’s credit.”

Scrimgeour advocates short sales, in which the homeowner sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds to the lender usually in full satisfaction of the debt.

Lenders are more open to short sales because their loss is much less than with a foreclosure, Scrimgeour said.

“Frequently you have the homeowner still in the house taking care of the property and paying the utilities,” she said. “The home is maintained and the landscape is being watered. Frequently the homeowner is still keeping up with their homeowners association fees, and they’re usually paid up on their property taxes until their payment goes delinquent.” “What seller’s don’t realize is the do not write a check for commission if their are no proceeds.”

In a foreclosure, all of those expenses are on the lender while there is no income from the loan, Scrimgeour said.

In a foreclosure, the homeowner’s credit score will drop by at least 300 points, while a short sale usually results in a loss of  as little as 50-150 points, Scrimgeour said.

“In maybe as little as 18 months, if you do a short sale, you can requalify for a mortgage,” she said. “If you’re going through foreclosure, it might be five years, seven years or 10 years, and with some people they may never be able to buy a house. You’re really risking a lot.”

If you are having trouble making payments, lost a job, income reduction etc… call us,  there is no obligation.

 

Chaska Agent Attends Star Power Convention

Sally Scrimgeour of  COLDWELL BANKER BURNET in Chaska, MN, attended the 2009 Annual Star Power Convention in Denver, Colorado.

 Howard Brinton Star Power Conferences bring together 120 of the Top Real Estate Agents in the Country to share their knowledge and experience.  1000 of the Top Real Estate Agents in the  Country attended this information packed conference.  Various Seminars were held each day featuring different topics such as “Short Sales”, “Foreclosures”, “Marketing”, “Social Networking” and much more.

Featured Speakers included Howard Brinton, Founder and CEO of Star Power Systems, Jim Gillespie, President and CEO of Coldwell Banker; Dave Liniger, Co-Founder and Chairman of the Board of RE/MAX INTERNATIONAL;  Gary Keller, Founder and Chairman of the Board – Keller Williams Realty International; Earl Lee, President of Prudential Real Estate and Relocation Services; Michael Russer, a.k.a. “Mr. Internet”; Jim Casey of Jim Casey Seminars and Consulting.

Agents attending Howard Brintons Star Power are proven time and time again to be the top producers of the industry.  Sally is excited to have been a part of this conference and looks forward to implementing all the wonderful ideas and strategies that she has learned in to her local markets in Chaska, Chanhassen, Eden Prairie, Victoria and Waconia Minnesota.

 

Tax Credit Bill Extended & Explained, See Details Here…

The JimandSally.com Team is committed to bringing you the latest in real estate news.  This truly is exciting news for buyers.  Now more than ever we need to take advantage of this opportunity. This is said to be the last housing tax credit that the government will offer so first time home buyers and move-up buyers should take advantage of it. Continued recovery in the housing market is key to returning stability to the overall economy, and this extension and expansion of the tax credit will create a strong foundation for future growth of housing sales, and make a measureable difference in our economy.

Here is a link to a YouTube video of Senator Isakson’s remarks on the Senate floor, including a prominent thank you to Richard Smith, Realogy CEO(CSPAN2, Nov. 4, 2009) http://www.youtube.com/watch?v=hXOYoNBVxxg  The thank you to Richard is about 1 ½ minutes into this six minute video clip.

Call us for all your buyer needs!  We are here to help you find the best buy!

Carver County Acreage Sold by JIMandSALLY.com

12720 Wynwood, a beautiful 10 acre wooded property was sold this past week by the JIMandSALLY.com Team for full list price!   JIMandSALLY.com Team specializes in Acreage properties in Carver and Wright Counties.