Welcome. I've put together some tips on how to avoid foreclosure through selling your home or property as a short sale. I hope you find this information valuable. My experience is extensive. I've represented sellers for shorts sales in Vancouver, WA and Clark County since 2003 and have closed hundreds of these transactions.
Short Sales: What are they? A short sale occurs when a seller wants to sell a home that is worth less than what is owed on the property. Therefore net proceeds from the closing are not sufficient to payoff the mortgage/mortgages in full. Hence, the payoff is short of what is owed....a short sale.
Why would a seller consider a short sale? Typically it's because they cannot afford to keep the home or investment property any longer and would like to avoid having the bank foreclose on the property. A foreclosure will have a greater negative effect on your credit score than a short sale or short payoff. That being said, the effect on your credit is a situation by situation basis. Nothing is black and white and it very much depends on the banking institutions you're working with and how they report to credit agencies.
Why would a bank approve a short sale? Well the short answer is- statistically it costs a bank or investor much more to foreclosure on a home/property then it does to accept a short sale. The initiation of foreclosure from a bank involves attorneys, asset management companies, appraisers, Realtors, locksmiths, lost payments, lost interest, fees, lost market time, etc. etc. etc. Banks are not in the business of owning Real Estate nor do most of them want to be. It benefits them financially to work with sellers and Realtors to get the home/property sold quickly prior to actually foreclosing on the home or property. This is definitely the case with short sales in Vancouver, WA.
When can a seller consider a short sale or selling their property for less than what is owed? Anytime. In fact, the sooner the better. As we all well know the Real Estate market isn't what it was 2-3yrs. ago. Homes take longer to sell and much more effort on the behalf of the seller or the Realtor that they enlist to sell their home. Plus, if the seller has stopped making payments there is a time line for how much longer they will own the home before the bank forecloses. Time is of the essence and I can't stress that statement enough. Many times people will wait because of pride, humiliation, the hope that somehow they will come up with the money to afford to catch up on their mortgage. The best thing I can say is that many, many people right now are going through this same circumstance. A very high percentage of homes for sale in Clark County Washington or Vancouver, WA (and many other regions in our current market) are short sales or homes facing foreclosure. Making a definitive decision to sell your home as a short sale sooner than later will aid in the successful sale of your home and negotiation of your short sale.
How does a person go about pursuing a short sale? Well, to start with you should enlist a Realtor with experience in short sales. I can't tell you how many times I've heard a Realtor tell me that they are supposed short sale experts. Then I ask how many they have closed and they say 3 or 4!!! Short sales are a different breed of Real Estate Sales all together and they should be treated as such. There are strict time lines , foreclosure dates and postponements, percentages banks will accept, procedures banks require, pitfalls to avoid, different policies that change daily, PMI guidelines, FHA guidelines, weary buyers, the list goes on and on and on. The only way you could possibly be represented properly by an agent is if they have successfully sold many, many short sales over a respectable period of time. Just like any other business, relationships are built with experience. A reputable relationship with a bank that I've worked with previously can mean a 2-week approval turnaround compared to a 4-month turn around
How Much? Free, or at least no out of pocket expense to the seller. If someone approaches you with a short sale service with an up front fee run quickly and pursue another avenue. The facilitation of a short sale is part of the listing agents job if the seller isn't taking care of it themselves (which I don't recommend for the same reasons I've stated above) and will be part of the reimbursement of commission paid at closing. There are companies out there charging sellers for services. You shouldn't have to pay anyone out of pocket to help you with a short sale. The commission paid to the Realtor is part the closing costs approved by the bank. How Long is the process? Well, first you need an offer on the home that has been mutually agreed upon by both parties. Once you've got that it depends on a) the level of experience your Realtor has with facilitating short sale offers/approvals b) which bank you have your mortgage(s) with. Some banks don't have the inventory of short sales/pre-foreclosures that others do so the time that it takes them to respond to an offer could be 21 days. Conversely some banks have gigantic inventories of short sales and are doing their best to respond within 90-120 days.
*Let me share a little discussion I had with a contact of mine at a very large, well known financial institution the other day. 7 weeks ago this bank opened up a "new" department to help expedite the time it was taking them to process short sales. At that time they opened their new department with 3500 files in process and approx. 60 employees. Over the course of 7 weeks they were up to 85,000 short sales!!! That's almost 10,000 files a week! Needless to say they are hiring. Unfortunately this is more common than not.
Who am I? My name is Chris Galyon and I work for Northwest Properties located in Vancouver, WA. I've been a Top Producing Realtor for the past 7 years. I have specialized in short sales, pre-foreclosure sales & helping sellers threatened by foreclosure in Vancouver, WA for the length of my career. I would consider myself one of the most experienced Short Sale Realtors in the area for selling homes on strict time lines, dealing with bank negotiations & aiding sellers avoid foreclosure at all costs.
Why do I do this? Well ultimately because I like helping sellers sell their homes that might otherwise think there is no hope left but to let their home go to foreclosure. There is a way to successfully sell your home, avoid foreclosure and have your bank pay for it. I've personally sold and/or processed hundreds of short sales in Vancouver, WA and Clark County Washington over the past 7yrs. I've developed both systems and bank relationships that allow me to close these transactions in less than avg. time lines and with a very high success rate.
As I said earlier, do your research. If you decide that selling your home as a short sale is the option you'd like to pursue make sure you enlist someone who has vast knowledge & experience. Ask for referrals, their experience over time, transactions closed, what is their success rate? Also, just because someone says they have a "team" of people working on your file doesn't necessarily mean you’re in good hands. This is an important decision that you may be only able to make once. Handing the fate of your home to someone who is in-experienced in short sales could mean the difference between selling your home or getting foreclosed upon.
Chris Galyon Northwest Properties www.excellentnwhomes.com 360.521.7565 element57@comcast.net
I hope to have shed a little light on Short Sales in Vancouver, WA or Clark County WA.
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