We are all seeing the commercials in Massachusetts lately that say " Short Sale is the way to go" No commissions, No Closing Costs. Are these guys serious? Not everyone can do a short sale and yes, you need money to close these deals. Everyone gets to share in the pain.
You need to understand that the bank isn't the only entity involved in your short sale. There are investors, MI Companies, 2nd lien holders. All these people get a say in whether your short sale gets approved. Many of these entities want promissory notes, they are tired of taking the full hit. However, I digress.. the rest is for my client meetings.
First and foremost besides PATIENCE.. you will need:
1. Hardship Letter- This means a divorce, job loss and medical, NOT my investment isn't worth it anymore and I want out. You won't get approved.
2. Tons of Documentation- You need financial statements, bank statements, 401K statements, etc. If you don't want to provide them because it's your business...Then just give them a deed in lieu.- Don't waste anyone's time.
3. Money- You need to make sure your utilities and water bills are paid. You may need money to cover attorney fees and seller closing costs such as discharge fees, recording fees etc. Each bank is deciding what items they are and are not willing to pay for anymore.
4. You have to understand your credit is going to take a huge hit
This is not all it takes to get a short sale done but it's the start. This is the reality of the short sale transaction. You need a REALTOR who understands them, works them and can get you to closing. The longer it takes the more stress involved. Have an agent whether they are the listing or buyer agent who doesn't understand what this takes, then you are in for a long road on both sides of the deal. Worst case scenario: Seller goes to foreclosure, buyer has no place to live. Neither is a good option.
If you are facing a short sale or foreclosure situation, contact a REALTOR before it is to late. Ask the necessary questions and if you don't know what they are, email me: firstname.lastname@example.org, I will tell you what to ask. Good Luck to all in the New Year!
Today is my day to rant. I am both a listing agent and buyer's agent. So I really do understand both sides of the coin. The seller wants the highest and best price, the buyer doesn't want to overpay. Fairly simple I think. That is why we do Market Analysis on properties.
So here's the rub, If I present an offer to you, the listing agent with all my comps for the area, the sellers response of I can't accept that price because it doesn't net me what I want isn't reasonable. They need to take it off the market until they can accept the price. The comps are what they are!
The bank appraisal today is everything for financing. At least here in Massachusetts, the appraiser must be using comps within the last 3 months and within a mile radius. If you are doing a condo, the building solds come first. This is not rocket science. The market and numbers don't lie.
If you can't tell your client's the truth then get someone who will otherwise the inventory is just going to sit there and when I come back with my next offer, it's going to be lower than the first.