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WHEN YOU THINK TOO MUCH IS OWED ON THE PROPERTY, A SHORT SALE CAN STILL BE APPROVED

By Stella Barbour

Real Estate Broker/Owner with NoVa Brokers LLC 0225 094634 VA/ 643686 MD

November 26, 2007 05:37 AM

If you think too much is owed on the property and a short sale doesn't look like an option, it may still be an option. I want to share with you one of the most difficult short sales that I have had.

Here is one that I just completed sucessfully.

GMAC 1st Mortgage $465,000.00

GMAC 2nd Mortgage (different branch, with different investors) $120,000.00

plus fees, interest, costs, late mortgage payments, foreclosure sale costs, attorney fees, etc.

Contract for $400,000.00

4 months of negotiation, One foreclosure date put on hold while working with contract

Approved for: $400,000.00

1st Mortgage settled for $373,000.00

2nd Mortgage settled for $3,000.00

Settled and closed.

I thought I would share this one with you since it was one that the sellers had spoke to 2 other agents before me and both told them to foreclose, they have no chance in a short sale.

I guess third agent was a charm.

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Mark Horan

Resident Team Realty, LLC & Toni's Property Management LLC - Saint Cloud, FL

"The Resident Chef" - Resident Team Realty LLC &

Great job Stella. I called Countrywide to check on my short sales status today and found out that Thanksgiving causes amnesia. I had to resend all documents to my negotiator that supposedly sent everything in for approval 14 days ago. Glad you found some light at the end of a dark tunnel.

Nov 26, 2007 05:43 AM

Rosario Lewis

DDR Realty - Newburgh, NY

GRI, SRES - DDR Realty - Orange County, NY

You have proved once again, it never hurts to ask. I'm surprised by the agents who didn't even inquire about the possibility of a short sale. How much effort does it take?

Nov 26, 2007 05:46 AM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

Mark - With this one I actually re-sent package 4 times because of the entire file getting lost. How convenient to have the file lost 4 times. I am working on 2 with countrywide right now.

Nov 26, 2007 05:56 AM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

Rosario - You are right. you don't lose anything by asking. I am surprised by the agents also, I guess they felt too much work. It doesn't matter because it did get done and they received their end result.

Nov 26, 2007 05:58 AM

Lynn Pineda

eXp Realty - Boca Raton, FL

Real Estate Promises delivered in SE Florida

Stella, congratulations on your perseverance as it can pay off! Thanks for your example too...good to see others short sale examples.

Nov 26, 2007 12:37 PM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

Lynn - Thanks for stopping by. I thought examples might be nice and give us all hope.

Nov 26, 2007 12:39 PM

Krista Fuchs

Prudential Fox & Roach - Exton, PA

Chester County Realtor - (484) 459-8025 - Home Buying and Selling

Wow, great job! Look forward to reading your other posts!

Nov 27, 2007 12:24 AM

Jeanean Gendron

The Address Realty - Redding, CA

Specializing in Selling Unique Properties

Stella, I am curious on what 4 months of negotiation is.....the lender just dragging their feet and losing your file? Great job on hanging in there and getting it done. I do short sales and they do drag out, but I have never had it go 4 months. Dread that!

Nov 27, 2007 12:29 AM

Michael Shalen

Chicago Office Advisers - Chicago, IL

The second feels lucky that they got anything. Once the value of a property falls anywhere near the amount of a first the second knows they will be wiped out. Geat job.

Nov 27, 2007 12:31 AM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

Krista - Thanks for commenting and your interest.

Jeanean - File lost, transfer of offices (from one state to another) dragging their feet, not presenting to their investors, disagreeing with value, a little bit of everything.

Michael - Thanks - I had to beg the 1st to give the 2nd the $3k.

Nov 27, 2007 12:35 AM

Elizabeth Nieves

The Elizabeth Nieves Realty Group - Durham, NC

Bilingual Raleigh - Durham North Carolina Real Estate Team

WOW!! I obviously have a lot that I can learn from you. This is amazing!!

Dec 01, 2007 12:59 AM

Brian Block

RE/MAX Allegiance, Managing Broker/Branch Vice President - McLean, VA

Northern Virginia & D.C. Real Estate

Stella, thanks for posting this success with short sales story. It is very encouraging since I may have a short sale listing coming up very shortly in Manassas. The difference between the payoff of the loan amounts and the probable sales price is only about $30,000.

Dec 01, 2007 11:50 AM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

Elizabeth - Thanks for the comment. This one was difficult.

Brian - I thought if I start putting up success stories then more people will be encouraged to attempt the difficult ones. Your Manassas one should be one that gets approved since it is only 30K difference. I am in the process of listing 3 more this weekend and one of them is similar to one you are getting ready to do and the other two are like the one I just completed.

Dec 01, 2007 02:21 PM

Rosemary Brooks

BMC Real Estate - 209-910-3706 - Stockton, CA

The Mother & Daughter Realty Team

You go girl and thank you for sharing. SHort sale approvals just have no rim or reason so go for what you have and do your best -- might be surprised.

Dec 03, 2007 06:56 PM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

Rosemary - Thanks for stopping by and commenting. I thought that success stories would be encouraging for those that are really trying to make these work.

Dec 04, 2007 12:01 AM

Jack Hartzell

HomeAuctionAdvantage - San Diego, CA

In the San Diego market, I am regularly negotiating 2nd mortgages in amounts of $100k-$150k down to less than $10k

Short sale price reductions in some zip codes are $200,000 to $300,000 below the last selling price/present principal loan balances...with a 24 month inventory of listings, and 75 percent of all listings either bank owned, short sales or vacant. Other zip codes have little if any value loss.

I plan on at least 4 months and more like 6 months time to negotiate, at least 3 offers to get one that sticks,(I have had 6 offers before one could get closed)

Dec 09, 2007 05:56 AM

Natalie Langford

Realty Negotiations - Winchester, VA

Winchester, VA Real Estate

Great post! Thanks for sharing your expertise with us!

Dec 09, 2007 11:43 PM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

Jack - Wow, the longest one I have done has been 4 months. Your area is worse than mine on homeowners losing homes.

Natalie - thanks for your comment.

Dec 10, 2007 12:41 PM

David Dee

RMX REALTY - Alhambra, CA

Real Estate - San Gabriel Valley (L.A.) & N. Orang

Stella,

Great post and example! This is truly a test of persistency. That is amazing how you were able to get this approved. With the total loan amount of 575k and you got it down to 400k. Is the 400k the market value? I would assume this is most likely below market value on this property.

This appears to be a primary residence. Have you done one where it is an investment property that an owner purchased? I heard that most banks do not approve shortsales on rental properties.

What was the original commission amount asked and what did the bank settle for? It looks like 4-5% in this case since they are already taking a hit.

Congrats on the closing!

Dave

Dec 11, 2007 04:10 PM

Stella Barbour

NoVa Brokers LLC - Vienna, VA

Principal Broker, Serving Virginia and Maryland

Dave - Thanks for commenting. The value/appraised by the bank was $450K. This was a primary residence. Yes, on Investment property, I have not had a bank say no yet, but that doesn't mean it can't happen.

Dec 12, 2007 12:47 AM