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Qualifying The Short Sale Seller

Yesterday I got a referral to a Short Sale seller. The agent who referred her was not familiar with Short Sales and thought I could help. I called the seller. The phone conversation went like this:

Wendy: "Why do you need to sell the house?"

Seller: "It is really too much for me."

Wendy: "In terms of...?"

Seller: "The market value has declined and we pay too high a mortgage. We can rent a house like ours for less, and I want a different house."

Wendy: "Can you afford your mortgages payments?"

Seller: "Yes."

Wendy: "You don't have a hardship. The Short Sale lender will only approve a sale where there is a legitimate hardship and inability to pay."

I proceeded to go over her income and expenses and we found she had about $700 extra per month after paying bills. It is prudent to qualify our sellers before we take a Short Sale listing.

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Selling Real Estate on the Emerald Coast of Florida: Destin, Fort Walton Beach, Navarre, Niceville, Santa Rosa Beach and vicinity. Call 1-877-487-9639.

www.ShortSaleForeclosureHelp.com

www.RulnickRealty.com

Posted by Wendy Rulnick "Its Wendy!" Destin Real Estate -Florida on 07/18/2008 03:19 PM

Comments (19)

qualifying for a short sale, short sale sellers, destin florida real estate, short sale hardship

Originally posted at: Destin Real Estate - Emerald Coast of Florida: Qualifying The Short Sale Seller

Post is included in group: Short Sale Specialists & Pre-Foreclosure Education
Post is included in group: Short Sales Specialists
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19 Comments on Qualifying The Short Sale Seller

JUL

So this person just doesn't like her house anymore? Gosh with all the people who truly need help I'm always surprised at others who try to take advantage of the system. Thanks for writing. Veronica

Good advice and great questions to ask a seller before proceeding with a short sale.

Great point Wendy. This is becoming popular among sellers to say they have a hard ship just because they think they can't aford the payments.

Good info. Nice to hear other people with the same view point as me :)

Tracey

www.360realtygreensboro.com

Thank you for such great info. It is too bad that so many sellers are in this position.

AMEN! over and over again we explain.... In any business decision or self interest, doesn't it amaze you that they don't pick up a paper or check out the internet just to see what they are talking about???

Veronica - I think it's becoming "trendy" to do short sales!

Angelia - Thank you, I usually go over their income and expenses in detail before proceeding.

Mike - You're right!

Tracey - Thank you. Why should we waste everyone's time with an unqualified seller?

Jim - It is sad.

Patricia - Thank you. I think it is fear of financial dealings, of the unknown. Or perhaps it's just that they hear a headline on t.v. about "short sales".

JUL

Excellent advice, Wendy, thanks for the post.

JUL

Wendy- I hope you didn't take it.....I just can't understand folks that think that a short sale is a way out of a declining market because they feel that they made a bad investment. That's fraud! I won't help them either.

Robert- Thank you.

Mark- No way I took it!

JUL

Wendy, that is something. At least you prescreen them in advance rather than wasting your time down the line.

Wendy: Thanks for the sharing the Q & A. I've also learned to ask alot of question before I'll take on a short sale listing.

www.kathytorline.com

Jim - Thank you. There is so much work involved. Taking such a listing wouldn't be fair to the buyer, either.

Kathy - I agree. I also scrutinize their financial worksheet.

Wendy: Great point...

JUL

Roland- Thanks!

JUL

not exactly true. A lender will absolutely approve a short sale with no delinquency, and no "hardship" There may be strings attached (promissory note) but they will do it. Do I reccomend a short sale just because someone just doesn't feel like paying their mortgage? No, but I have done quite a few where they needed to move due to transfer, an investment property draining them, etc. It can definately be done.

Joseph- Promissory note- that's outside the box thinking... most think of "short" as less than full amount of loan. Thus, it's something to be carefully considered when deciding whether to take the listing- that the seller has the means, and you have the time to take the chance that such a deal would be approved.

JOSEPH--As a matter of definition for the lenders, the following events are considered "hardships": Loss of a job, business failure, damage to property, death of a spouse, death of a family member, severe illness, inheritance, divorce, relocation, military service, increase in mortgages, increase in insurance, increase in taxes, reduced income, too much debt, separation and incarceration.

As you can see Joseph, the examples you give ARE hardships.

Yes, you are correct by definition, however, many agents, as well as lenders will tell you that they only consider death, disease, and destitution to be hardships. My point was, the lenders will accept more than that, as you so kindly pointed out.

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