Exploring the Short Sale from Start to Finish. What sellers and buyers need to know:

Your home is now listed and active on the MLS. The agent has created a marketing plan and priced the home aggressively with in market value range. The offer and/or offers are coming in, you sit down with your agent and pick the offer that works the best. From there you submit the package below to start the process the bank.  

• Offer with all signatures
• Buyer Pre Approval Letter
• Copy of Buyer earnest check
• Buyer signed Short Sale Disclosure
• Seller Short Sale Package (already complete)
• Up to date financial Information from the seller
• HUD this is a form with all the numbers as related to the offer submitted

Off the file goes:

Once the lender has received all the information above they assign the file to a negociator. He or she  reviews all aspects of the file. All required paperwork must be complete without errors. 

Come on...You need what?

During the review process it's not uncommon for the negociator to make request for additional information from both the seller and buyer. In most cases we're asked to hurry up and produce the additional documents at lightning speed only to turn around and have the bank move at a snails pace. Unfortunately, it's the nature of the business and it's very important not  to get worked up about the requests and just keep moving forward.

Broker Price Opinion or BPO:

In most instances, once all the information above has been reviewed by the negociator, they order an opinion of price. They submit the opinion to the lender. From there, typically the process from BPO is 6 weeks to 3 months of waiting while the Loss Mitigation works  the file. You might wonder? What takes so long for the approval process to come? Most loss mitigators are working on hundreds,  if not more,  files at one time.

Hang on and why?

Often buyers become so frustrated with the wait they retreat. In most cases, if they only held on for a while longer the outcome could have been different. The benefit for the buyers to hang on is purchasing a great home at a very competitive price! It's very important for a good buyers agent to coach their buyer clients as to exactly what they can expect in the short sale process. Buyers shouldn't make any plans to move, and it's very important to have a back up plan. Once the short sale approval comes the clock starts for the buyer and his or her financing. Most buyer financing is FHA, this processing can take 45 days to complete.

Next in this series:

Short Sale Approval to Closing

Exploring the Short Sale from Start to Finish. What sellers and buyers need to know:

Completion of the Short Sale Package:

The agent and the seller work close to assemble the proper paper work (short sale package) these documents must be filled out truthfully and complete. If the banks receive anything that's not complete they could ignore or move the file to the bottom of the Short Sale pile.  I cannot stress enough the importance of concise and complete information when filling out the Short Sale package.

Occupying the home:

While your house is listed as a Short Sale your bank will send someone out to check the occupancy of the home. If they find the house is vacant they can Accelerate a foreclosure on the property. I suggest to remain in the home until the sale is complete.

Utilities and HOA Dues:

When selling a home via the Short Sale process it's important keep utilities in place. It's always better to show a home that has heat, electricity and water. The home owners responsibility is to pay all bills associated with the property. As an example, if the water bill or home owner association dues are not paid the home WILL NOT CLOSE. Banks will not pay these bills.

Deficiency Judgments, 1099s, and Short Sales:

If the lender moves forward and forecloses or allows a short sale you only have a few options, they will write off the dept or issue a 1099-C (cancellation of Dept) OR they will choose to pursue a Deficiency Judgement. It's important the seller/s always consult their own attorney and/or accountant to review the possible ramifications of a short sale. Check out the Mortgage Forgiveness Dept Relief Act aka, HR 3648

Behind the scenes:

• Your agent should set the best price to get the home sold. It's important not to come in to high or low and attempt to hit the sweet spot with the listing price. 
• Contact your bank and obtain an overview of their processes, correct contact numbers ect. Complete all the paperwork, take photos and implement the marketing plan.
• Receive and process all inquiries on the house. Set up showings, communicate with bank and seller all activity with listing. Review the pricing each month and implement a reduction if the home is getting no activity.

Exploring the Short Sale from Start to Finish. What sellers and buyers need to know:

So you've consulted with your lender and possibly a non-profit home counselor and decided you want to proceed with the short sale. Where do you start?

1-Meet with a certified SFR real estate agent. They can assist with all questions related to the processes of the Short Sale. Ask the agent how many Short Sale transactions they processed last year.

2. The agent should ask questions to make sure you would qualify for a possible Short Sale on your home. These types of transactions take dedication and patience from both the sellers and real estate agents. 

3 All lenders require a short sale package to be assembled that includes current financials, hardship letter, letter of authorization and W2's to name a few. Again, your agent can assist you with this process.

4.  The Letter of Authorization gives your agent permission to talk to your bank and see exactly what needs to be done to get the ball rolling. Under the HAFA program some sellers could qualify for assistance with moving expenses ect..all lenders are different, they only way to know for sure  is to communicate with the bank.

5-Depending on your banks processes they could recommend you get the house listed and bring an offer first before anything else can be done or they order and estimate of value and share with the seller and agent what price they might be willing to except for the home.

Watch for my next blog. I'll explore what happens next in the Short Sale Route for Sellers.

Exploring the Short Sale from Start to Finish. What sellers and buyers need to know:

Considering a short sale and not sure where to start? You should speak to a non profit home counselor or a trusted real estate professional that has earned the National Association of REALTORS SFR Certification. 

Look out for the following:

• Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay - walk away!
• Beware of anyone who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
• Never submit your mortgage payments to anyone other than your mortgage company without their approval

You would only want to consider a short sale if you know for certain you cannot afford your home and you see that foreclosure could happen if you don't do something. It's much better to have a short sale on your credit than a full blown foreclosure.  

 

Purchasing a home can be filled with excitement and anticipation for homeowners. It can also be a time where additional responsibilities are acquired. Having the assistance of a reliable and honest agent will make all the difference in when buying a home. One of the many things that can go unnoticed is taking precautions against obsolete and toxic building materials which may still be present in homes. Citizens of Grand Rapids are pushing for continued use of new green, eco-friendly technologies. Green construction brings together many techniques which aim to reduce or eliminate the impacts in which physical structures have on the environment and health, especially when remodeling or re mediating older homes. Asbestos Used throughout the 20th century to insulate pipes, boilers and in roofing, asbestos gained recognition due to its resistance to heat and electrical conductivity. Homes built before 1980 should be aware that older homes may still harbor asbestos materials. In most situations, asbestos appears in roof shingles, dry wall, attic insulation, popcorn ceilings, joint compounds and electrical wires. If asbestos is located, it must be left un-touched until a professional can provide a course of action. In many situations, the best action is no action. Asbestos that is disturbed or damaged due to age is known as “friable” asbestos. This is a concern because its toxic fibers can easily circulate and become inhaled. If asbestos removal is recommended, it should be performed by a licensed abatement contractor who is trained in handling asbestos materials. They must wear protective equipment such as masks and gloves to avoid any exposure. Asbestos fibers are thin and strong, and when inhaled frequently, an individual can develop mesothelioma, a rare but severe lung ailment caused by asbestos exposure. Symptoms may not show up from 20 to 50 years after exposure. Manufacturers of asbestos obtained medical evidence of its corrosive qualities but continued shipping the substance anyways, leaving workers and homeowners exposed on a frequent basis. Thousands have fought this by attempting to receive mesothelioma compensation for their wrongful illness. Green building is the consequence of a design that will increase energy efficiency, water and have a direct impact on your health and the environment. Implementing green methods of building can have positive environmental, health and economic benefits. These include: Conservation of natural resources, enhancement of air quality, energy sustainability, increase property value, improve quality of life, improvement of pulmonary/cardiac health and reduction of waste. Green options such as cotton fiber, cellulose and lcynene should be given consideration as replacements to asbestos. Cotton fiber is quickly becoming a favorite for home builders and renovators. Made from recycled batted material, it is also treated to be fireproof. Research has demonstrated that the use of Eco-friendly insulation alternatives can reduce annual energy costs by 25 percent.

Heritage Hill is one of the largest urban historic districts in the country. It was the first "neighborhood" of Grand Rapids and is adjacent to downtown.

Its 1,300 homes date from 1848 and represent over 60 architectural styles. These were the homes of lumber barons, teachers, judges, and legislators who shaped our city's future.

Today, the population is equally diverse. Professionals, trades people, artisans and students; singles, couples and families, renters and homeowners; people of all colors, backgrounds and incomes make Heritage Hill home.

 

 

This photo is the property of Mary Kent, Five Star Real Estate 1545 68th Street Suite 201, Grand Rapids MI 49508 and can not be duplicated without permission.

 

I find myself glancing at the cities you all are from and thinking... uhhmmm... what's your neck of the woods like? (sorry Mr. Al Roker!)

So hey...I'll go first!

My favorite place....drum roll.....GRAND HAVEN, MICHIGAN is a wonderfully inviting beach town known as Coast Guard City, USA. It includes a host of beautiful classic cottages up the winding hills with majestic views of Lake Michigan. My Mom tells story's about the fun she had at party's on the hill in the mid 1950's.

You will find tranquil beaches, trolleys, shops, restaurants, boardwalk, boats and fun galore! So come visit and enjoy the history and sites of my Grand Haven!

 

If your like me you're wondering how to keep your school age children busy this summer! My family and I love the Grand Haven area and spend a good part of our spring and summer in our own little piece of paradise! In the upcoming months I'll be blogging about all things Grand Haven!

Mary's May pick for family fun~

Visit Grand Haven State Park for the GREAT LAKES KITE FESTIVAL the weekend of May 15th-17th 2009. This is a spectacular cause to benefit the Children's Leukemia Foundation of Michigan. This event is also sponsored by Mackinaw Kite and Toys in Grand Haven, Michigan.

 

 

Check out the SCHEDULE OF EVENTS for the Kite Festival, it's full of fun for the whole family! For walkers out there  The Children's Leukemia Foundation has a walk scheduled for May 15 that will  wind its way from Grand Haven State Park through the downtown business district and back to the park for lunch and the Great Lakes Kite Festival. SIGN UP FOR THE WALK HERE!

 

 

 

 

 

 

 

 

 

If you're looking for a dedicated professional real estate agent in Grand Haven or Ottawa County call Mary Kent, agent with Five Star Real Estate @ 616-915-3987 or visit http://ottawacountyhome.com