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Not All Short Sales Are Pre-foreclosures

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

March 04, 2011 12:36 AM

Did you know that? It seems many folks don't. If they did they wouldn't tell me "Your Seller needs to accept my low offer because it's better then being foreclosed on".

Pre-foreclosure means a Notice of Default has been filed. Payments haven't been made and the loan is in default. Foreclosure is imminent. There are many Short Sales on the market where this is not the case.

Being in default IS a requirement on some Short Sales but not all. For example:

FHA requires the borrower to be 31 days delinquent at time of closing on the PFS (Pre Foreclosure Sale)

It is also my understanding that the VA requires delinquency prior to qualifying for a VA Compromise Sale.

To qualify for HAFA a borrower must be delinquent OR default is reasonably foreseeable

Some lender/investors require default and some done. In fact with the new FTC MARS Rule we are not allowed to tell Sellers to miss payments.

So.....don't assume that that Short Sale listing is in foreclosure. It may not be. The Seller could be making payments even though struggling to do so OR it may very well be a Strategic Short Sale.

If you need to sale your property but are current on your mortgage and do not have a hardship you may still be able to do a Short Sale. I hope this helps.

Are you facing foreclosure in Florida?

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

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Rob Arnold

Sand Dollar Realty Group, Inc. - Altamonte Springs, FL

Metro Orlando Full Service - Investor Friendly & F

We are working a Bank of America short sale right now where the seller is current on payments but is headed into a distressed situation if the house does not sell soon. Should be interesting to see how this one plays out.

Mar 04, 2011 12:59 AM

Renée Donohue~Home Photography

Savvy Home Pix - Allegan, MI

Western Michigan Real Estate Photographer

EXCELLENT POST! There are so many assumptions going on in our distressed markets and one thing consumers can do is hire a trusted professional - that knows what they are doing - in order to get advice on the right way to proceed.

Mar 04, 2011 01:10 AM

Les & Sarah Oswald

Realty One Group - Eastvale, CA

Broker, Realtor and Investor

The new FTC MARS rule is just an extra piece to this already complex shortsale process.

Mar 04, 2011 01:25 AM

Kathryn Maguire

GreatNorfolkHomes.com (757) 560-0881 - Chesapeake, VA

Serving Chesapeake, Norfolk, VA Beach

Great post! You know what they say when you "assume" anything and there are a lot of assumptions out there in the public domain regarding short sales.

Mar 04, 2011 03:06 AM

William J. Archambault, Jr.

The Real Estate Investment Institute - Houston, TX

Bryant,

"Your Seller needs to accept my low offer because it's better then being foreclosed on"

Nonsense! But, commonly uttered by the ignorant and hucksters. The ignorant think you can buy every short sale below relative value. The hucksters know that it some times happens, they also know it might be a one in fifty or a hunderd chance and that the listing fool and the seller do all the work!

If you're in trouble or about to be you need to accept an offer at or close to the current market value! Low offers relevant to the current market steal you precious time! With short sales you may only have time enough for one try!

Bill

Mar 04, 2011 03:21 AM

Bob Jakowinicz

National Realty Centers Livonia--Bob Jakowinicz - Livonia, MI

Michigan Real Estate Agent-- MI Real Adventures

There is always someone out there looking to steal a house or property, I don't think this will ever change

Mar 04, 2011 03:35 AM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

Very good thought on that misconception Bryant. Also many lenders won't do short sales anyway. They would RATHER foreclose on you. No absolutes in this business.

Mar 04, 2011 04:49 AM

Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES

Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL

Florida Waterfront and Country Club Living

Buyers do seem to have that mentality when they submit their low offers. Then they are offended when the sellers counter with a more reasonable price.

Mar 04, 2011 12:29 PM

1~Judi Barrett

Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK

BS Ed, Integrity Real Estate Services -IDABEL OK

There are no absolutes in the short sale and foreclosure home buying. Your post should cause buyers and sellers, for that matter, to get a better grasp on that.

These are very uncertain times in attempting to purchase in that market. Buyers and Sellers both need to first acquire the services of a knowledgeable and helpful broker to guide them, such as you.

Mar 05, 2011 12:16 PM

Gene Riemenschneider

Home Point Real Estate - Brentwood, CA

Turning Houses into Homes

I cannot figure out what the bank is going to do or why most of the time. It never hurts to ask and then see what happens.

Jun 04, 2011 11:30 AM

Kenneth Young

Uni International LLC - Virginia Beach, VA

Bryant - Interesting, because I just ran across a short sale that was due to a divorce. The Agent told me that the loan payments were current even though the market price was way below the note.

Kenneth

Jun 08, 2011 12:08 PM

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