Questions about short sales?!?

Asked by Aneissa Van Metre, Colorado Springs, CO Thu Sep 4, 2008

I have a friend who owns a condo in Galveston and is having difficulty keeping up with it. I mentioned to him that he might be able to do a short sale. I would like to see if there is a Realtor in Galveston who can explain to me the short sale process and how that would effect my friend's credit. Thanks in advance.

Help the community by answering this question:

+ web reference
Web reference:

Answers

10
Frank Linares, , Gaithersburg, MD
Thu Sep 4, 2008
I'm not an agent in Texas, but I do have some short sales experience as a Realtor in Maryland. I don't imagine there is much difference from state to state on how the process is handled. In fact, since the market here has tanked more than in Texas, you may not have many Realtors in Texas that are as familiar with the process of a short sale. But I'll do my best to explain how it works here. Keep in mind there may be some differences between Maryland and Texas, but I don't think it would be much, at least as what the agent has to do. As you probably know, a short sale is a transaction in which the seller's lender will recover less than what is owed. As such, any contract that is ratified between the buyer and the seller is subject to the lender's approval. The approval process, depending on the lender, may take as much as 3 or 4 months to complete. The lender will need to see a "short sale package" which includes the listing agreement, the contract of purchase, the seller's tax return and W-2's for most recent two years, last month of pay stubs, a couple of most recent bank statements, a financial worksheet detailing income and expenses, and a hardship letter explaining the situation. Once this is submitted to the lender, at some point a BPO (broker's price opinion) is ordered which is basically an opinion of the property's value in the current market. Once the approval process is completed, the lender may accept the offer or they may counter the offer. If the offer is countered, then the buyer has to decide if he/she will accept it or withdraw the offer. The reason a short sale is more attractive than having a foreclosure is that a foreclosue will affect your friend's credit for around 9-10 years, while a short sale will affect it for 2-3 years. Also, there is some evidence that a short sale property will sell form more money than a foreclosure and from that standpoint the lenders prefer a short sale instead of a foreclosure.
2 votes
The Hagley G…, Agent, Pleasanton, CA
Wed Nov 12, 2008
The site below is very consumer friendly and offers a lot of great information, as well as answers to frequently asked questions about short sales.
1 vote
Mike Linkena…, Agent, Jacksonville, FL
Sat Sep 13, 2008
It is definately a "niche", and the absolute most important thing is to have an agent with tons of experience in them. We are a statewide network of Short Sale Specialist Realtors in Texas, we have a couple agents in Galveston who are Short Sale Specialists in them! Check out http://www.firstcoastre.com/professional66.shtml. By the way, hope you are OK in Hurricane Ike, as I type this I know you are in the middle of it!!
1 vote
Margaret T.…, Agent, Conroe, TX
Fri Sep 5, 2008
Aneissa,
First, is this condo a second home - if so it does not qualify for a short sale. Second just having trouble keeping up with the payments is not a good enough excuse for a short sale with the lenders. There has to be a reason. Job change, Illness and so on. It can not be that the income is better spent elsewhere.
Your friend must be behind on the payments and I am not sure that they want to do that to their credit until they know that they are qualified for a short sale. The Condo must be listed.
Now if your friend meets these requirements I can refer them to a short sale specialist in the Galveston Area.
I am outside of the area and would not properly represent them but can certainly find a true specialist not just a hungry Realtor to help.
Margaret
1 vote
Yvonne Cousar, Agent, Round Rock, TX
Thu Sep 4, 2008
Hi Aneissa..... please see my blog dated 8/25/08 entitled “Everything You Wanted to Know About Short Sale, But Was Afraid to Ask.” I hope this information will provide you with a little insight regarding the process of short sale.

Yvonne Baker, Real Estate Consultant
http://www.YvonneBaker.com
ycbaker@kw.com
Web Reference:  http://www.YvonneBaker.com
1 vote
Lee DeForke…, Agent, Galveston, TX
Thu Dec 10, 2009
Aneissa,
Being Certified in Short Sale and Foreclosure is very important with today's problem. I suggest that first you get with your friend and make sure they start the dialogue with the mortgage company. Also, look at the bottom line for the property and see if it is in their best interest to try and sell now and how the other comps compare. I have the SFR designation and so does my partner, Jill Costa. We can help with your friends situation and try and provide the best solution to address this. We wish you and everyone the best of luck this coming year.
Lee
Web Reference:  http://www.leedeforkejr.com
0 votes
Angela Sarge…, Agent, Austin, TX
Sun Sep 13, 2009
Frank-I'm sorry to disappoint you, but we have had our fair share of short sales.

A short sale DOES affect credit. It is better than foreclosure though. But hurt is hurt. Have your friend speak with an attorney to ascertain whether he would be better off with a deed in lieu of foreclosure.

Selling the property may be a better option for him. If he hasn't gotten behind, this may be a good option.

You didn't mention whether this is his primary residence. Regardless, he needs a good Realtor and would still be wise to discuss his options with a Real Estate Attorney.

Best wishes to you and your friend.
0 votes
Lorna Pressw…, , Galveston, TX
Sat Sep 12, 2009
Hi, I'm a Realtor that works exclusively in Galveston and I've handled several short-sales here. A short sale is often available by the lender/lien holder if there is danger of foreclosure. If the lender agrees to a short-sale, what that means is that the person that has the loan will be able to sell the property for less than the loan value and whatever is still owed can be paid off over time to the lender without a foreclosure. Depending on the situation this will prevent the huge impace of a foreclosure on the person's credit report but some negativity may still show until the final portion of the loan is paid off. Going with a short-sale is strongly advisable over letting your property go into foreclosure. If I can help in anyway or if you have further questions, feel free to email me or give me a call. Good luck to your friend~ Lorna.
0 votes
Mike Linkena…, Agent, Jacksonville, FL
Tue Mar 17, 2009
You'll likely find this an extremely helpful resource, and also would help you find an excellent short sale realtor in Galvestor. We have one in our network
0 votes
David Hale, , Renton, WA
Fri Dec 19, 2008
We really don't know how a short sale will affect your friend's credit. I think we can say it will be a lot better than a foreclosure but probably worse than a 90 day late payment. The Transunion, Exquifax and Experion will have their own formulas for determining how much detrimental effect there will be.

You can get an idea of the short sale process at http://www.ShortSaleSuccessKit.com . There is a free sample available there that may help.
0 votes
Search Advice
Search
Ask our community a question
Market Conditions in Galveston Zip Codes

Email me when…

Learn more