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The don'ts of a Short Sale in Colorado

The Don't of a Short Sale in Colorado
aurora colorado homes, aurora colorado real estate, homes for sale in colorado, colorado homes for sale, spanish speaking realtor, spanish speaking real estate agent, colorado spanish speaking, short sales, colorado homes 1) Don't ever fax a short sale to the seller's lender in the listing phase
2) Don't ever fax an incomplete short sale package to the lender. They Receive around 300 to 400 requests a day for shot sales, if it is not complete they will not begin to process it and they might toss it.
3) Don't ever tell the selling agent we should hear in a week or so, Be honest
4) Don't ever submit a short sale package to the lender if that lender has taken the property to foreclosure sale and you are in the redemption period. YOU CAN NOT DO A SHORT SALE IN THE REDEMPTION PERIOD, I have been told by other guys that is possible, LOL :)
5) Don't ever recommend that the buyer do their inspection and appraisal before you have approval on the short sale.
6) Don't advise the seller to move out the property, especially when they have an FHA Mortgage.

Are you experienced about Short Sales? Please add more to the list and I will includethem in the main blog,

Aurora Colorado Real Estate Homes for sale in Colorado Spanish Speaking Real Estate Agent Realtor

Also Click here to Read the Do's of a Short Sale

Posted by Aurora Colorado Real Estate Ray Saenz, Colorado Realtor on 05/18/2007 08:55 PM

Comments (47)

aurora colorado short sales for sale, aurora colorado homes for sale, aurora colorado real estate, short sales in colorado

This post has been included in Colorado Information
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Post is included in group: Short Sale Specialists & Pre-Foreclosure Education
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Post is included in group: Short Sale

47 Comments on The don'ts of a Short Sale in Colorado

MAY

2007

Great info!

Sally, Not Enough, I want more comments :) LOL, just kidding with you, hm... you do not have something to add here Sally ?

Ray, I have had very limited experience with Short Sales, but from what I have experience I would say this is great advice to follow.

Ray, it is very important that sellers check with a tax advisor regarding short sales. Most real estate agents fail to tell the seller that they will be taxed for the "gain" they get for forgiveness of the amount owed vs. the amount of the sale to a buyer. It can be substantial. Short sales are not for all sellers.

George, I always appreciate your comments, thanks for stopping by and make your effort to help us :)

Joan, As soon as I have time I will add it to the main blog ok ? :) thanks for your extra cents here :) I appreciate it :P

I just wrote an offer on a 899,900 house today. WE are getting it for 830K, the listing agents tells me the seller who moved to Az, a year ago has 1) great credit 2) needs a short sale.

The bank appraisal was 1.5 million when he paid his ex-wife off so now he is upside down. The listing agent said they would know in a week from his bank. He is not late on any payments and has good credit.

Should I be worried ? My clients flew back to England tonight and we put in the contract, we needed to know by next Friday or it would be null and void.

You post is timely and brought up questions, when you said don't tell a time.

Missy, very intesting topic, I will post it in a few, right now I am going to dinner, but please check the blogs later on :) thanks

I have sold two listings doing a short sale and in my opinion they are named wrong, they should be called long sale. On the second one we lost two buyers along the way because it took so long.

Last year I had 2 buyers that were told at almost the 9th hour that the home they were buying was in foreclosure. (Sellers attorney orders title-we don't know until we see title) The first, a single woman, sold her home, moving out of the suburbs to a Chicago condo. Her sale is scheduled they buyers need to move, they have sold their home, and the domino effect would happen. She gets permission to move into the vacant condo in Chicago from the attorneys. I inform my client that this may not be such a great idea since the property is in foreclosure, it could go to sale prior to working out the short (very looooooongg) sale. She moves in anyway, paints, carpets etc. 60 days later we are finally able to close. This was a very scary time for her, but she took the chance, thankfully it worked out for her.

The other couple did not renew their lease and had to be out, they also worked out a deal with the attorneys to move into their first home. Again, I suggested against it. 90 days later they were able to close.

They got VERY lucky! I do not know why you would want to move into a home knowing it could go to sale and your personal belonging could be out by the time you come home from work. To much risk for me!

Here's another "don't" for the list... If you're the selling agent, DO NOT tell the buyer's agent that you've gotten a stay on the foreclosure sale if you haven't gotten it! We had a contract on a house a couple of months ago that we pulled out of because we found out the seller's agent had lied about what was going on. The house had indeed gone to the foreclosure sale and was in the redemption period. For goodness sakes, tell the truth! It's painfully tempting to go the NAR or CAR or whomever and put in a complaint against this seller's agent.

If you're not aware, during the redemption period ANYONE can go redeem that loan and snap that house right out from under you even if you have a contract. Does this fall under "buyer beware"?

For those who don't know me, I am a foreclosure consultant and short sale negotiator. If you have any questions, feel free to contact me!

Michelle Schoen

The Permanent Record, LLC

303.733.0885 - Phone

303.733.4372 - Fax

720.334.3280 - Cell

Real Estate Administrative Assistant & Transaction Coordinator
Short Sale/Foreclosure Negotiations

Website Design & Maintenance

Search Engine Optimization

http://www.thepermanentrecord.net

MAY

2007

Ray, I have found working with short sales to be very frustrating because there is often no personal contact with the lender and you either leave voicemails or emails, and wait for someone to hopefully eventually answer.

Have you found a way to establish personal relationships with distant lenders of sellers who are about to be foreclosed? I have thought of googling for the corporate management tree and trying to get direct phone numbers to someone who could actually help. I haven't yet had the opportunity to actually try this. What do YOU do?

i'm a mortgage lender in southwest florida and shorts are becoming a normal part of the market and yet the many that the seller's lenders deal with the shortsis both inconsistent and unpredicable.

look out if there's a second.

i hope others contibute to your don't do list

because to quote frazier crane

i'm listening

for helpful information

Missy, some lenders take between 30 days to 60 days for a short sale approval, now, if the seller has a FHA loan and and he already is not living on that home, it will be something to worry, I wish the best luck on this transaction, but remember that short sales are not fast, they take time, if you are expecting to have a resoltuion between one week, it will not happen, now, if it is a short sale approved already, that's good, but it is say "subject to short sale approval" o something related, it will take time believe me, whether your client loves the home and see potential, then be very patient and keep bugging the listing agent to move his/her .... to have an answer if the listing agent has a negotiator , some lenders do not have negotiators, so it is very difficult to work with, as wells fargo it does not have any , :(

Marchel, thanks and many thanks, so now we are in the same page , and everybody can believe now what I wrote :) they should be called long Sales :P or Dinosaur Sales thanks for stopping by, any more comments that you would want to share on those experiences ? It will be very interesting, so everybody we learn.

Ok, guys / gals, I have to go for an appointment and I will be back with more writings about short sales, experiences, etc :) keep the good work and I will add more to the list :P

Kim, well if you do not want to go in risks, go for Reo's / lender owned properties and short sale approveds so they will give you an answer at most in 2 or 3 business days :) thanks for sharing your story / comments and for stopping by , you are on my list !

any suggestions on how to get ahold of the REO lists? My husband is looking to rehab some properties, some for rentals some to sell. I think until you totally understand the foreclosure market it can be very frustrating!

Brian, as the mortgage lender wrote from southwest florida and he did not write his name and information to get in touch with him, LOL :) well short sales are becoming very popular these days on this market, buyer's market, I understand your frustation, it is a really pain in the .... to deal with them and I will tell you why, they have between 300 and 400 requests every day, they take only complete packages and they ignore the incomplete ones, so that's the reason that you need to send a super complete package before trying to arrange a short sale, and it can take betwen 30 to 60 days for an acceptance, wells fargo they do not have negotiators, and some others are bad to deal with, so you need to have experience on this, it is not easy task. Hmm... I wish I could help, but there is not very good help these days to deal with them. just to try to the best to get an acceptance.

Michelle, I understood what you wrote, first of all, I got it still when it was not well written, Selling Agent you tried to say the"listing agent"? Selling Agent = buyer's agent anyway, it is bad to read that you got in that problem, but it is easier to sell a home when it is in the redemption period with proper disclosures and proper autorization from the seller than to sell a property in a short sale, much much easier believe me, you only need to check what was the bid amount, you need to order the intent to redeem and add the agent's fee + closing costs fees and VOILA!!!! much easier job, the buyer can get a very easy deal and not that big hassle, It will be good to share information, experiences with you, I love these theme, Short Sales and foreclosures. :)

I have learned a lot, :) and I am an agent :) and my background is Loan Originator, so learn is awesome :P

mortgage lender in southwest florida: Please send me your email, :)

Kim, there are some lists around, but companies are not to good on that and they charge, send me an email to recommend you a good realtor who can work together with you on that hunt :P

MAY

2007

As usual Ray, wonderful advice. I will save this information for that time when our market slows down.

Ray- These are both great posts.. short and to the point.. Here's another to add to the Don't List..

Don't tell the seller that he is free and clear if the sale is accepted by the lender. As George noted...he may have to pay taxes on the forgiven amount and it the loan is a refi.. he may actually have to sign a note with the lender and pay the difference over a period of time as a lender can get a default judgement on a loan that is not a purchase money loan

MAY

2007

Randy, you are welcome my friend, I have saved many useful information that you always post :) thanks for stopping by :P

Kaye, true :) as soon as I have time enough to do everything I will add these ones to the top on the main blog so people can read it :) thanks for your comments and for stopping by :P

MAY

2007

thanks for part 2

Siha, you are welcome, I hope that I will improving more these short sales series :) keep the good work

MAY

2007

Seeing how SHORT SALES are unfortunatley popping up all over---this is GREAT INFO!! Thanks for sharing...

Susie, you are welcome thanks for your comments and stopping by :)

SEP

2007

We stumbled upon a house we'd like to buy and found out that it is a short sale property. The listing agent just told my agent that any offer we provide would take 6-8 weeks for any sort of answer. Does this sound right?

OCT

2007

Ray I have been doing short sales training for many years. I have also picked up short sales training materials from other people and I am amazed at the amount of disinformation contained in some of the materials from very expensive boot camps, workshops and seminars. The big thing is that the process and the industry is undergoing changes and, as a lender, I am privy to information most of the "gurus" have yet to see. In fact, in the recent 3 or 4 months I have had 2 well known trainers attend my seminar to get updated. Another thing to keep in mind is that not all states have a "redemption period". State laws govern how foreclosures are handled. I would love to have you join me for a conference call. Since I don't advertise in other people's comments just visit my profile and follow it to my website. Thanks!

MAR

2008

How about - Don't list a short sale unless you have completely and fully qualified the seller's hardship. At the end of the day there has to be a reason oater than a desire to sell for just about any bank to accept a short sale.

Great post, thanks.

Alex Charfen
http://www.1cdpe.com/

CDPE Logo
Get Certified Today!

APR

2008

I am looking for a good Short Sale Transaction Coordinator.. Any ideas on where i can find one or more?

APR

2008

We are on the 5th lender negotiator in a current short sale. The process has taken months (yes that is MONTHS) and we are nowhere close to completion. These things take on a life of their own.

APR

2008

Testing

MAY

2008

We need to sell large home in CO. Moved in 2007, have caretaker there. Not late on payments, but we've been borrowing the $ for months, and now are DEEP in debt! Loan on CO house was a re-fi, and we ended up moving because of family emergency, and bought a home with cash from the refi in another state. This was at the beginning of 2007 - just before the housing market began dipping... we were SURE our house would sell!

Our current loan is an ARM at 10%, due Jan of 09, no pre-payment penalty, not assumable.

I've called the bank monthly and told them we can't pay - but every month so far we've borrowed the $ cause we need to keep our credit rating so we can get good balance transfer rates on the borrowed $. It was never our intent (and still isn't) not to pay everything....

Bank is considering Short Sale or Deed in Lieu (short sale preferred) cause they took down our income/outgo statement and know we CANNOT keep paying on the loan. Very little income above social security.

We had an interested buyer - originally thought he'd consider short sale, but now he'd only do that for MUCH less than what's owed, and it's my understanding that the bank can come against us for payments for up to 10 years (thing bank said that would be just the difference in principal, with no interest added - is that right?). Now our realtor contract has run out. Bank said we could try to work something out with this potential buyer - but then house HAS to be actively listed.

Can a real estate negotiater write up a contract (instead of a realtor)? Do I have to pay a realtor, a negotiator, and a lawyer to get a sale? We're already getting 0 on the house.....

Can bank get a judgment against our other home which was purchased with the re-fi $?

Keep PRAYING we'd have a sale - it's a wonderful house - but LARGE with 6+ BR, 4 BA, zoned RMF8 on 4 city lots.

Appreciate any input!

Karen

JUN

2008

Karen,
Sorry that I missed your message, can you send me a message through here or to my email so I can contact you ?

thank you
Ray Saenz

JUN

2008

Ray - still have the house, and would REALLY appreciate connecting with you!
Email: HighVision@juno.com Karen B

Karen,
I already sent you an email with all your concerns/questions.
sorry for delay, let me know if you got it.
Ray Saenz.

Alex,
Yes, to do a short sale, we need solid situations, some people they think that because they home is not worth it they want to do a short sale, if they can afford it and they are not in a hardship financial situation, then it is not a valid reason to do a short sale. Short Sales need solid reasons.

JUN

2008

Short Sales are good if you know how to handle them. Short sales are good for realtors if they have patience and they take them with respect.

JUL

2008

Hi Ray,

Why is it bad to have the buyer do his inspection up front? In the short sales that I work with I don't take multiple offers so, in turn, I expect the buyer to do his inspection up front. We don't want to get an approval and then have the buyer back out because of inspection.

Just wondering.

Thanks,

Tim

AUG

2008

Hey Tim,
When you think and see that maybe is nothing to worry on a property, you can leave the home inspection for later, I know that there are things out of our hands and bad things can happen and there is nothing to do about it, but in my cases, there is like 5% chances that home can have something really bad or something that buyer and seller can not agree to handle it, the reason is because you almost know what home have or does not have. it is always good as realtor just to give a general check up before listing the property, so you can know ahead what is missing or not,

I am not a home inspector, don't get me wrong, but at least something that it is visible that you can notice and that makes sense, if it is bad or in good shape, so you can disclosure it and if they like it that's fine. I understand your point and I respect it, but many buyers don't want to spend $300 if they really will not get the property, when they see that there is something solid then they agree to pay for the home inspection, appraisal, etc. Short Sales sometimes are a risky, unless you know for sure that the lender from the side of the seller is getting enough then you can recommend to go ahead with the home inspection.

but your point of view is good and valid too, taht's a way to know ahead the your buyer really wants the property and wants to keep it for sure and is willing to accept a rejection too or a transaction not closed.

JUL

As a buyer in a short sale situation I would not deposit escrow money. I have seen it tied up forever.

AUG

I have a dilemma, Hoping you could help me ! I have a Short Sale listing and I submitted 2 offeres to the bank and now one of the buyers agents is saying that it was unethical to submit 2 offers. My sellers signed both of them since they are foreclosing anyways. My sellers moved out and now live in a different state. Can anyone assist please?

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