The reality of the Real Estate market is that we are faced with a growing inventory of pre-foreclosure properties to market and sell. The following is an account of an actual short sale transaction. The actual names and dates of people, companies, places and dollar amounts have been changed for privacy protection.
CHAPTER ONE
Phil Marshall of Exquisite Realty has been a full-time real estate agent for over 5 years. He had a great year in 2008, but 2009 has been quite a different story. The Melville, Indiana real estate market has taken quite a hit and is flooded with short sales and REO properties. To be successful in this market, an agent must be willing to become proficient in dealing with the short sale process. Phil took classroom and online studies within the past two years from experts who are experienced in pre-foreclosure properties and he felt that his knowledge would easily translate into his everyday business.
On February 22, Phil received a referral from another agent in his office that was having difficulty with a short sale listing they had been marketing for some time. Phil felt his knowledge and "by the numbers" approach in handling a short sale would make this property an easy listing to market and take to closing.
Phil reviewed the existing listing file as a first step in determining a strategy. He found that the file needed some attention. Realizing the need to have the file ready to go as soon as an offer was accepted by Seller and Buyer, Phil went to work. He contacted the Sellers and got the Letter of Authorization updated with his contact information so he could talk to the bank after the short sale package was put together.
An important ingredient in a successful short sale transaction is a willing Seller. The details of this particular Seller's situation were as follows:
This Seller had purchased this 4 year old 1700 square foot town house during the height of the real estate market. With the downturn of the economy, the Seller had to relocate and change jobs. The property had a first and second mortgage (80/20 loan). After the Seller made an unsuccessful attempt to negotiate a loan modification, it was up to us to help him. The shortfall in payoff versus final net to the bank with penalties and accrued interest was over $40,000 even after the Seller managed to pay off the second mortgage. The lis-pendens had already been filed, but no foreclosure date had been set. The home was in move-in ready shape, which was reflected in the MLS listing. The hardship letter was already complete and sent to the bank along with current financial documentation.
To be continued...............
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