Is doing a short sale on a 2nd home possible? Just a few months ago I received a call from another agent in a different market. We knew each other from networking in real estate forums. She said she had a family member in my area that was unemployed and could no longer afford to continue making payments on his Cape Coral 2nd home and his main residence in New Jersey. He was considering a short sale and she asked me if I could help. Shortly thereafter, I contacted him and the lines of communication were open between the two of us. He had many questions and concerns. Feeling comfortable with the process, he eventually decided to start the process of listing his house to do a short sale with his bank’s approval.
What steps were taken to get the short sale process started? As stated above, the first step is to open the lines of communication with someone that has the knowledge and experience in short sales. If the decision is made that the short sale is a good option the next step is to price the home correctly taking into account its condition and competing sales and listings within close proximity. In this case the house went under contract within a month. While the house was on the market, the seller and I worked on gathering the necessary documents that are often required by banks to review and approve a short sale.
What was the outcome of this short sale? First let me say that multiple offers were received. Buyers, through their agents, were screened for patience and financial strength. They knew upfront that we were looking for someone who could wait for the process to take place and not decide to walk away because the short sale was not approved within a month or some unrealistic timeline. Of course, this is not a guarantee that the buyer will stay in place but it increases the odds for an ideal outcome.
Since this loan was serviced by Bank of America, we uploaded the package to Equator. Shortly thereafter, the loan servicing rights were transferred to Seterus, Inc. This change in servicers set the process back about 3 weeks. In the end, the servicer, with investor’s approval, approved the short sale and waved their right to pursue a deficiency in writing. In exchange for the waiver to pursue the deficiency and since it was not a main residence, the seller had to make a small $500.00 contribution for a deficiency of about $100,000. Since the buyer was paying cash, we closed the short sale within 7 days of approval from the seller/borrower. Yes, the seller wanted to review the letter, he met with his accountant as well and once he was comfortable, he signed the short sale approval letter. Total days on market from list date to sell date about 120 days.
How is the seller doing now? This seller avoided foreclosure and has one less thing to worry about. He is still facing the challenge of losing his main residence and is grateful that he can now concentrate on this one problem and not worry about the 2nd home he could have lost to foreclosure and of course there are the normal worries about having money to feed the family, including a special needs son.
Are you facing foreclosure in Cape Coral? You have options; the lender usually pays closing costs, agents’ commission and sometimes waves the right to pursue you for a deficiency. Contact me now or call 239-313-0710 if local or toll free at 800-584-9721. Help is available, all you need to do is ask. All information is kept confidential.
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