Home Selling in Colorado>Question Details

Longmonthome…, Home Seller in 80503

If I might need to sell my house as a short sale depending on the offer/sale price, should I hire a real estate agent that specializes in short

Asked by Longmonthomeowner, 80503 Tue May 18, 2010

sales? Are short sales marketed differently from regular sales?

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The phrasing of your question leads me to believe that you don’t know a whole lot about short sales. Short sales have consequences which you need to understand. Short sales are also not what one decides to do just because their house has not sold after being on the market for a while. Short sales have to do with an owner who is upside down, underwater on the house and has a financial hardship.

In a previous Trulia post you said that your house is not selling so you are thinking about renting it. Do you have an agent or are you trying to sell the house yourself? If you have an agent, your agent should be able to answer all of your short sale questions. If you don’t have an agent, you should get one.
1 vote Thank Flag Link Tue May 18, 2010
Hello Longmonthome,

Sorry to hear of your troubles. It is rough right now.

I'm right here in Longmont and I know your neighborhood. I am a longtime professional in real estate here in Longmont - more than 20 years with national and international brand companies.

Indeed, as noted here, there are compelling reasons for using an agent, not the least of which is a local agent has the marketing experience and savvy to get a short sale accomplished. There is a difference in marketing a short sale.

So, if you wouldn't mind calling me - when your contract with your existing agent expires - I'm at 720 810 0683. Email: bouldersuz@gmail.com

I'll look forward to hearing from you when you are ready.

Best,
SuZ
PML/Tuxedo Real Estate
0 votes Thank Flag Link Thu May 20, 2010
I would recommend interviewing several agents who specialize in short sales and look at their marketing plans as well, then choose with who you think would be best suited for the job. They will most likely write price reductions into the listing contract, so that the home is continuously being priced reduced every couple of weeks or so to encourage offers. Once an offer is received, then you as the seller can decide whether to move forward yourselves with the cost or request a short sale from your lender.

I would definitely market it as a short sale up front once you hit the price point that you know you cannot afford. If for some reason you can still make the sale happen without the short sale assistance of the lender, I'm sure it would be a pleasant surprise to the buyer (just make sure the buyer knows it's purchased "as is" so they do not request too many repairs, fix-ups, replacements, etc. during inspections). Stigma or no stigma, there are plenty of short sales that are closing.
0 votes Thank Flag Link Thu May 20, 2010
Thanks for the information. We originally thought we could afford to rent but after running the numbers it looks like we would lose too much money if the market isn't going to recover for another couple of years. We are underwater with our mortgage and home equity loan both held by Citimortgage. Citi has said that they would work with us because we have a hardship case (job loss, relocation for employment). However, we would like to avoid a short sale because of the credit hit and cover the loss ourselves (if it isn't too much). We have had the house on the market for the past 4 months and have lowered it 10% and made improvements but still have had no offers. Our contract with our realtor is almost over and we are looking for a new one. We are trying to decide whether we should try one more time to do a regular sale with a new realtor who will hopefully do a better job marketing the property and then, if that fails, switch to a realtor who specializes in short sales. Or do we switch now and list it as a short sale (even if we might be able to cover the difference ourselves)? Is there a stigma against a property once it is considered as being listed for a short sale?
0 votes Thank Flag Link Thu May 20, 2010
Good question and a lot of good answes below. As previously stated, consult with a CPA and/or attorney. When looking at short sales you need to consider what you own and what you owe. In other words, if you have a positive net worth outside the house (IRA, Retirement, Stocks, investment properties) you should consult an attorney who is skilled in this area. Oliver Frascona would be a good one. Google him. He's not hard to find. To facilitiate a short sale many agents are going with outside short sale facilitators. The minimum I'd expect is the agent to make weekly calls to the mortgage companies to follow up once you get a contract. If they aren't willing or able to do that then require the agent to hire a short sale facilitator. Most title companies have that type of service. Good luck.
0 votes Thank Flag Link Wed May 19, 2010
Hi Longmont seller,

Benefits of using an agent that specializes in short sales: 1. they handle a lot of the transaction, negotiating and communication with the lender on your behalf (less stress for you). 2. They will receive their commission on the sale of the home from the lender, not you.

Yes, there can be taxes owed on the difference, as someone has already mentioned, but there is the 1099 Tax Relief Act through 2012 that help cover this if the short sale was on your primary residence, and covers you for the original purchase amount (not the refinanced amount if you took out an equity line of credit). Feel free to review the details on the IRS.gov site.

Also, fill out the HAFA form on the short sale and have your agent submit that with your short sale request. If the lender participates in this new program, they may allow you some funds at closing to help cover the upkeep up the home (best to leave home in excellent condition) as well as relocation assistance. No guarantee, but will not hurt to ask!

Best of wishes!
0 votes Thank Flag Link Wed May 19, 2010
Yes, That is a great Idea! You are on the right track. Good luck.

Brian
0 votes Thank Flag Link Wed May 19, 2010
I recommend talking to your accountant before you get excited about the short sale option. The bank will 1099 you the amount they "short" which will be ghost income you will have to pay income tax on. This mortgage that has been shorted will also report to the credit bureaus as "settled for less than full balance" which will negatively affect your credit for a long time. Just a few other things to think about.
0 votes Thank Flag Link Wed May 19, 2010
Longmont
I would HIGHLY recommend usiing a Keller Williams agent with the "Certified Home Rescue Expert. they have access to attorneys, economists, accountants and your REaltor. They can educate you on the process and if it becomes a short sale, they have professiolnal negotiators to deal directly with the bank.
Kimberly Ryan
303-523-8333
0 votes Thank Flag Link Wed May 19, 2010
Yes. Not all agents are experienced in negotiating with the lender; your lender. A. short sale is very different from a regular sale in many ways.
0 votes Thank Flag Link Tue May 18, 2010
A short sale needs to be disclosed that it is a short sale in the MLS. The agent really doesn't market it any differently from a regular transaction, but should have some experience and or knowledge of how short sales work.

It is not the job of the agent to handle the short sale, but rather to guide the seller through the short sale and help them with what will be needed for the package the bank will require. It's the sellers responsibility to request the short sale from the bank.

The transaction will be handled just like any other listing with the exception that the agreed upon contract will be contingent upon bank approval. The process can take months and an agent handling a short sale should be aware of how the process works and what to expect.
0 votes Thank Flag Link Tue May 18, 2010
A short sale is only considered by a bank if you owe more than the current market value.
Short sales take longer due to the bank and owners reaching an agreement.
Its always best to get an agent familiar with them and agressive and patient at the same time.
Yes, short sales are marketed differently because buyers need to know it takes longer to close.
I hope this helps and if you need help, don't hesitate to call.
Liza King
Web Reference: http://lizaking.com
0 votes Thank Flag Link Tue May 18, 2010
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