We own a condo on Dayton in LP. Have run out of money and need to short sale. Do we choose a Realtor or wait for the bank to assign us one?

Asked by Sonia Rousseau, 60614 Wed Jan 26, 2011

3 bed 1.5 bath condo. Job change meant we had to move out of it. Bought in 08 for $420k. Was advised it's probably worth $365 - 385K now (if that). It is rented out but alas rent does nothing to cover mortgage, tax and costs. We have stopped paying the mortgage last month and want to short-sale. Have contacted the bank. Do we wait until the bank assigns us a realtor or do we find a realtor ourselves? Any advise in the short sale process would be greatly received.

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16
Ranj Mohip, Other Pro, Chicago, IL
Wed Jan 26, 2011
You will want to choose your Realtor as soon as possible. Get your Realtor and attorney on the same page, and know WHO is negotiating on your behalf--is it you, the Realtor, or the attorney. Make sure your Realtor and attorney have done short sales in the past. You don't want them learning on your deal. There are legal and financial repercussions to a short sale and you need to know them before moving forward.

The information in this answer provided by Attorney Ranj Mohip is general information and is not intended as legal advice, nor does the attorney intend to create an attorney-client relationship with any reader by answering this question or otherwise contributing as a member of Trulia.com.
4 votes
Christopher…, Agent, Chicago, IL
Thu Jan 27, 2011
Dear Sonia,

I've got to disagree slightly with Amy's response here. While professional short sale negotiators can assist you with situations like this, the same results can be achieved using only a real estate agent and/or a real estate attorney or both (or theoretically neither). You can achieve all of the same results yourself, but it will cost you some significant amounts of time on the phone.

Given the price ranges you're describing in your email (around a 15% slide in value in your worst case description), the short sale process should not be as difficult as one for a property that has experienced a much more steep decline in value (say 40% or higher). Since the bank's loss is comparatively low (compared to many other neighborhoods in Chicago and municipalities around the country), it's very likely that you could get this successfully short sold pretty easily (again in comparative and relative terms).

Again (at least in the state of Illinois) you don't "have to" hire a short sale negotiator in the same way that you are not "required" to hire a real estate agent or a real estate attorney, but any or all of these parties could make the process much less labor intensive for you and your family. And do not wait for the bank- if you're going to try to get it sold- get moving on that immediately.

Good luck and let me know if I could be of additional assistance.

Sincerely,

Christopher Thomas
Broker Associate, Keller Williams Realty Chicago Consulting Group
716 E. 47th St. Chicago, IL 60653
(773) 418-0640 (cell) (312) 577-0985 (fax)
cthomas@kw.com
http://www.myagentchris.com
2 votes
David Dorfman, Agent, Neptune, NJ
Wed Jan 26, 2011
Skip the realtor and bank. Go talk to an experienced real estate lawyer.

YOu know what they may tell you about a short sale - "DON'T"

1. A short sale generates a taxable with the amount forgiven.

2. They may tell you to STOP - stop paying mortgage. STOP paying taxes and let the house go into foreclosure. They might tell you for a few thousand dollars, the process may take a couple years - where you can stay in your home and pocket the money. Your credit may not be heavily damaged.

That's all a big MAYBE.

Go talk to a lawyer and see what may work better for you. A short sale or strategic foreclosure. Depends.
Web Reference:  http://www.rentlaw.com
1 vote
Christopher…, Agent, Chicago, IL
Wed Jan 26, 2011
Dear Sonia,

I'd strongly suggest finding your own Realtor now. Don't wait for your bank. It's not their credit or potential deficiency judgement on the line- it's yours. Be prepared to "hurry up and wait," so don't get frustrated with the bank's often unreasonable timetables. If you need assistance selecting a Realtor, I'd be happy to speak with you about listing your home for sale or referring you to someone else. Below are some general links on how to choose a Realtor (for buying or selling). Let me know if I can be of additional assistance, and good luck to you.

http://www.bankrate.com/brm/news/real-estate/picking-agent1a.asp

http://www.realtor.com/Basics/Buy/Looking/Realtor.asp

http://homebuying.about.com/od/choosearealestateagent/

http://realtytimes.com/rtpages/20041209_chooseagent.htm


--
Sincerely,

Christopher Thomas
Broker Associate, Keller Williams Realty Chicago Consulting Group
716 E. 47th St. Chicago, IL 60653
(773) 418-0640 (cell) (312) 577-0985 (fax)
cthomas@kw.com
http://www.myagentchris.com
1 vote
Michael Emery, , Minneapolis, MN
Wed Jan 26, 2011
You will need to contact a Realtor. The bank will require you to sign documents that will allow the Realtor to negotiate on your behalf. You will also need to prove financial hardship in order for the bank to approve the short sale. But you have already done the one step that most people don't do - contact their bank!

And when you look for a Realtor, unless you have an agent in mind, don't be afraid to interview two or three Realtors to make sure that you find the one that can get the job done. Not all Realtors are willing or experienced enough to handle short sales.
1 vote
Oanh Vo-Liu, Agent, Chicago, IL
Wed Dec 14, 2011
I'm sorry for your situation. Get in touch with a realtor who has teamed with a good attorney to discuss your options. The truth is that every situation is different and every bank treats each case differently. The rules of what the bank will or will not pay for in a short sale or whether they'll forgive the debt is constantly changing. Empower yourself by choosing who you want to work with through the short sale process. Good luck!
0 votes
John Walin, Agent, Libertyville, IL
Sun Mar 13, 2011
I agree with David, thumbs up on getting attorney involved. When it comes to negotiating with bank on the deficiency amount, an agent cannot layout the whole picture. Aside from a job change, what is your hardship? If you have assets bank will want you to bring some money toward the shortage. I have SFR designation and too many agents over promise as "specialized in short sales" Sounds good, however you are still on the hook for commission even if the bank says you need to bring X dollars to closing. If You say no I wont contribute and the listing agent says they brought a bonefiied offer and pay. Only Attorney can advise you to threaten bankiuptcy, and negotiate a deed in liew of foreclosure. Only an attorney can advise you to stop paying and layout tax consequences. Don't trust out of state agents that offer assistance. Stick to agents and attorneys that practice in Illinois and not Florida.
0 votes
Dallas Texas, Agent, Dallas, TN
Wed Mar 9, 2011
You need to start moving forward ASAP

Contact lender for short sale package for approval
Secure a Realtor

Short sales lenders will allow your choice of Realtors

FYI - keep in mind when you move credit scores COULD BE DAMAGED may require pay double deposits on rental be approx. 2 years after sell of short sale for you purchase another home

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Wayne Beals, Agent, Chicago, IL
Wed Mar 9, 2011
Sonia,

Find a great Realtor that is looking out for you. Waiting for the bank will likely just put you into default, They will accelerate the mortgage and file for foreclosure. They may offer you a loan modification, but it will likely require you live in the home.

You should initiate the short sale by having a consultation with a Realtor that can help you assess the true market value of the home. Once you know this, there are programs such as HAFA, that regulate some short sales. Either way, you should get the home on the market.

A short sale negotiator would likely be a waste of money in your situation. Most Realtors still in the business have a good handle on the short sale process. I attached a ink to the HAFA program for you to view. Interview a few Realtors. Find the one who demonstrates a strong understanding of your situation and the short sale process. You listing agreement with your agent should have provisions for bank approval on it. They should also compile a series of documents with you to submit to your bank. These include a hardship letter, bank statements, income docs, etc.

Once you have a rock star Realtor, get an attorney to provide you with a clear understanding of deficiency judgements and any legal clean up that may need to occur. This should be done before you agree to the terms of the short sale with your bank. You should also check with a CPA to make sure to have appropriate exclusions for the 1099 that the bank will likely send you for any deficiency.

Best of luck. This is becoming a routine process, so relax, exhale and get it done. Don't be intimidated or coy, just start moving in the right direction.

Wayne Beals
Realtor
Keller Williams
Chicago Consulting Group
312 77BEALS
312 772-3257
wbeals@kw.com
http://www.waynebeals.com
0 votes
Robert Lee, Agent, Arlington Heights, IL
Mon Mar 7, 2011
Paulette, Great Answer! It is not worth waiting on the bank for anything. The bank will not simply forgive the difference of the sales price; many circumstances have to be met before your off the hook

Best of luck
0 votes
Ellen Baren, Agent, Chicago, IL
Fri Jan 28, 2011
Hi Sonia,

I hope all is well...

The bank doesn't get involved with a short sale until there is a fully signed contract between the seller and the buyer.

This market has been challanging for everyone. In the last year or so, I have successfully sold several short sales on the list side and have a fantastic attorney that I recommend who has systems in place to move the sale along as well as negotiate your outstanding debt away. She succesfully negotiated away a $90,000 debt for the seller and she may be able to do so for you too.

Contact me if you would like to discuss...

Sincerely,
Ellen Baren
Web Reference:  http://www.ellenbaren.com
0 votes
Amy Givoni, Agent, Boca Raton, FL
Wed Jan 26, 2011
You need a professional short sale negotiator to handle this for you. You can use a Realtor of your choice, or we can help you find one that is versed in short sales. The bank does not assign a Realtor to you. You need to get your property on the market. There's really no need to contact the bank, since you've only missed one payment. You should contact the banke once you have an offer and are ready to submit a short sale packet.

We can prepare a customized short sale packet for you. We also have specific language we would recommend when you list the property and accept the offer. In order to get your short sale approved, the process really starts at the very beginning, when you list the property. So, please call us and we can guide you through the steps. Our services are FREE to homeowners. We look forward to hearing from you.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states
0 votes
Robert Nowak, Agent, Chicago, IL
Wed Jan 26, 2011
The first thing to do is to contact a realtor that specializes in short sales. I have years of short sale experience and can answer my clients most difficult questions so they know what to expect. Since your condo is now an investment that changes things quite a bit. I also have resources such as attorneys that specialize in short sales/foreclosure that can assist in negotiation and closing.

Robert Nowak
Short Sale Specialist
RE/MAX City
773-699-5151 Direct
0 votes
Paulette Bez…, , Chicago, IL
Wed Jan 26, 2011
I can see you have a somewhat difficult situation. NEVER wait for the bank to do anything because whatever they will do is in THEIR interest, not yours!

In order to do a short sale, you will need to show hardship and the banks scrutinize these carefully. What are some examples? Job change, loss of income, loss of employment, illness--. In short, a sale of this nature doesn't mean that you can do it just because you might want to walk away from the property. Did you have to move out of state or to another city for your job change? If so, that may qualify. Feel free to contact me at paulettebezazian@gmail.com. I am a Broker Associate with Keller Williams Realty and have been in this profession for 19 years.
0 votes
Spirit Messi…, Agent, Tucson, AZ
Wed Jan 26, 2011
Dont wait for the bank to do anything, if you need to short sale your house, start interviewing Realtors now. If you think about it, the bank is NOT in a hurry to go ahead and sell your house, and "forgive" the difference of what you owe and what you sell it for. You need to work with a Realtor who has a lot of Short Sale experience, as they take a lot of work and if it is not done right, well it can be frustrating to say the least. Ask to see how many Short Sales transactions they have successfully completed and in your case, I would work with one that has done many Condos as well.

Best of luck.
0 votes
Sergio Herna…, , Naples, FL
Wed Jan 26, 2011
You should select a Realtor knowledgeable with the marketing and sale of short sales.
Web Reference:  http://www.golftobeach.com
0 votes
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