Hot question of the day: I owe $X, do you think the bank will take $y?
When selling your home via Short Sale, most people think the bank is concerned about what is owed on the property. Regardless of what is owed, the bank’s only concern is what the property is currently worth.
That means, if you owe $1.5mm dollars on a beautiful waterfront home and the surrounding waterfront comparable sales point towards a price of only $900,000, the bank wants an offer around $900,000. Will they do their due diligence to make sure they aren’t giving it away: YES.
If you need to sell and find yourself upside down in value, it’s time to Short Sale. It’s the best option if a Loan Modification doesn’t work or doesn’t help. It’s the best option as opposed to a Foreclosure.
Short Sales are very complex and take everyone working together to finally get an approval from the Banks. To learn more about short sales you can go to our Short Sale Information Guide.
A trend has started to emerge within the Short Sales that we have been negotiating. The banks, for what ever reason, have denied several short sales due to lack of communication with the Owners.
If the owner has fallen behind on payments, the lender will often start collection calls – sometimes twice a day! Even after we have a buyer for the house and have submitted an offer to the lender, the calls keep coming in. The banks are so over capacity with short sale business, the different departments within the bank have no idea of what is happening in the other departments. Therefore, you can tell the collection agent that you have a short sale till you are blue in the face, but they will just call again tomorrow.
The owners, can’t blame them, get irritated and stop taking the collection calls. At some point in the process the negotiations start to happen, the short sale attorneys representing the seller are communicating with the lender, the listing agent is communicating with the lender, but the seller/owner has stopped communication due to the harassing collection calls. At that point, several sellers/owners have received rejection letters due to “lack of communication”.
This has happened with Wells Fargo’s short sale department….so far.
Short Sale Tip:As much of a pain as it is, take the collection calls and tell them, “I am short selling my home, I have a contract that we have submitted, we are waiting for your negotiator to give us an answer, are you the negotiator?”
Short Sale Tip Bonus: Send your bank a certified letter stating the above.
Short Sales are a mess, but they do serve a purpose. In this slow and messed up process with the banks, the more communication you can have with them, the better!
Jacksonville Short Sale Specialists – RE/MAX Agent
A short sale is a loooong and tedious process for the seller, the buyer, the agents, and the bank/s holding the mortgage. No matter what, it takes more time to close a short sale than a regular real estate transaction. Can you speed it up? Yes, absolutely. However, it requires knowledge on the front end.
Keys to speeding up a Short Sale:
Work with Professionals: First and foremost, you must choose the right REALTOR to sell your home. Choose the wrong REALTOR from the beginning and you have pretty much sealed your fate. Questions to ask? How many years have you been doing short sales? Have you ever closed a short sale deal? Do you negotiate with the bank or do you have a team that does it or an attorney that does it? What % of your business is short sales? What % of your short sales are under contract? KEY POINT: Choose wisely on the front end and the rest will fall in to place. Check out Short Sale INFO for Sellers Here.
Document submission: Your REALTOR team should be doing this for you, but if they aren’t: Don’t submit one document at a time to the bank. Get it all together at once. Get everything & leave nothing out. Submit it all to the bank and call them every day until they have confirmed that they received your documents. Bank of America often takes a week or more before they will confirm they have received the docs.
Contract: ALL Short Sale contracts should be AS IS with NO repairs to be done by sellers. Can the buyers get a home inspection, yes – however they should get one PRE-CONTRACT.
Contract Offer Price: The offer price should be the TRUE market value or close to it. Will the bank take a little less? Yes but not by much. If you are a buyer looking to “Steal” a property, honestly you will probably never get what you are looking for as those properties are not the properties that you would agree to live in. Submitting a very “Low Ball” offer to “see if the bank will take it” is a complete waste of time. If the house is in a war zone or in complete shambles, and I’m talking basically destroyed, you can get away with submitting a low ball offer, otherwise don’t waste the time writing up the contract. KEY POINT: Submit a realistic contract and offer price supported by recent comparable sales.
Follow up: Call, call, call, call, and continue to call the bank. Squeaky wheel. Your agent should do this, your attorney should do this, and you the seller should do this. It only helps to keep the pressure on. Squeaky wheel them!
Expectations: If you are a Seller, Buyer, Buyer’s Agent, Seller’s Agent, set the appropriate expectations. The expectation is that this is a contract, it all hinges on the bank’s approval and it will take 60+ days in most cases.
Jacksonville Short Sale – Ponte Vedra Short Sale – Jacksonville RE/MAX Real Estate Agent
OUCH! This map hurts a little. Unless you bought a home Pre-Boom, you are probably experiencing some negative equity right now. If you need to sell, you could possibly be looking to the Mortgage company to take less than you owe on the mortgage. That is a Short Sale. Don’t Panic!
In order to Qualify for a Short Sale in Jacksonville, FL, you must have a True Hardship. Get in touch with the bank ASAP and ask to submit a short sale package or a hardship package. Banks are really picking up their game when dealing with short sales as this is a much better option for them vs. them owning the house.
If you are selling in this market, you are competing against Short Sales, Foreclosures, and Bank Owned Properties in just about every community within Jacksonville. Understand this: It’s about a 99% chance they will beat you on pricing!
So how do you compete? Simple- Be a Better Value!
Jacksonville Real Estate Agent – Jacksonville waterfront homes
Good news is coming out of Washington this week for Jacksonville Home Owners. In efforts to speed up the Short Sale process, the government is working with mortgage companies to streamline the often tedious event.
“The government will pay mortgage-servicing companies up to $1,000 and borrowers up to $1,500 for successful short sales or “deeds in lieu” transactions. It will also spend up to $1,000 to help defray the cost of getting holders of second mortgages to release their liens so these transactions can be completed.”
Up until the last few months, short sales in Jacksonville and Ponte Vedra where a thorn in the side of most banks. They took FOREVER and where a headache for everyone involved. That is all changing. Banks/Lenders are sending out information packets with instructions and expectations of everyone involved and seem to have an actual process for successfully completing the Short Sale. The Banks are actually helping now….this is good!
If you have a home to sell in Jacksonville or Ponte Vedra and are under water, you may be eligible for a short sale. Make sure you are working with a Professional Jacksonville Realtor and Jacksonville Real Estate Agent that has successfully completed short sales…..(Shameless plug for me here).
Also, keep in mind that you are still competing with all the other homes on the market. Once your bank gives you the green light for moving forward with a short sale, we still have to sell it. No matter the condition of your home, get it in near perfect condition to help get it sold….and don’t forget curb appeal! The home must stand out. We recently sold a home in a neighborhood where homes sit on the market for 6 months. We sold it in 45 days due to the right curb appeal and great condition.
MANY Jacksonville Home Owners are dealing with the fact that their home is worth less than they owe. In fact, a recent Jacksonville Business Journal article states that almost half of Jacksonville home owners who bought their homes in the past 5 years, now owe more than it’s worth.
Add the drop in house value to a hardship situation, and you have yourself a potential short sale scenario.
It’s tough. You’ve got a true hardship, loss of value in the home, and it’s hard to keep paying the bills. At this point, you need to get a handle on your situation sooner rather than later. The last thing you want is a foreclosure so you must act quickly.
Contact the bank! Ask to submit a hardship package & submit it ASAP! Find a Professional Jacksonville Realtor who does Short Sales. (Like me) READ all Short Sale INFO here.
The main point here is that it’s not the end of the world! It sucks, yes, but the housing bust has left many of us in the same position. It’s happening everywhere, on every street, in every neighborhood, so accept it and understand that life moves on.
The Good News:
Credit Hit is only Temporary: Your credit report will be hit fairly hard, but not as hard as a foreclosure. Expect about a 200 point drop. If you pay all your bills on time, you will see a heavy rebound of your credit score within 6 months. Monitor your credit at myfico.com.
You can Purchase another Home: Just not anytime in the next year to two years. I’m hearing 18 months more and more often, but set your thoughts on 2 years to be safe. You probably don’t want the financial burden of another home quite yet anyways.
If you find yourself in this position, contact me. We can work together to sell the home ASAP and you can get back to living!
Before you attempt a short sale on your Jacksonville Real Estate, know if you will potentially qualify. If you cannot answer yes to all four requirements, you may not qualify for a short sale in Jacksonville.
The Home’s Market Value Has Dropped. The home is worth less than the unpaid balance on the Mortgage. The only way to prove this is by looking at recent comparative sales or have an appraisal done by a licensed appraiser.
In Default or near default. Lenders are all over the board on this one. Some want you to be current, some don’t care, and some require that you be late and in default. Many lenders are now eager to head off future problems by considering a short sale sooner rather than later.
Seller has not assets. You will have to prove that you don’t have enough assets/cash sitting around to pay off the difference. The bank will want to see copies of your bank account.
Seller Has a True Hardship. The seller must submit a hardship letter that explains your hardship. Sadder the better, however understand what a true hardship is.
Examples of a hardship:
Unemployment – Loss of Income
Divorce
Medical emergency / sudden illness
Bankruptcy
Death
A few examples that do NOT constitute a hardship are:
Bad money management.
Unhappy with the neighbors or unhappy with your house.
Buying another home.
Pregnancy is not considered a hardship.
Moving just because is not a hardship.
If you need help to Short Sale your house in Jacksonville or Ponte Vedra, work with a professional Jacksonville Realtor who does Short Sales (shameless plug for me here) and knows how to Market your Home For Sale.
Also, Beware of all the scams out there! Every wannabe real estate investor has suddenly become a short sale expert, so make sure you are working with a reputable Jacksonville real estate agent and/or a Jacksonville Realtor.
Legal Notice: Always seek legal counsel before attempting to pursue a short sale as well as speaking with your tax advisor to discuss any tax consequences. A real estate agent cannot give you legal advice or financial advice.
