WHEN YOU TAKE A LISTING WITH LITTLE OR NO EQUITY YOU MAY WANT TO ASK THESE QUESTIONS:

1.         IS A "SHORT SALE" IN THE BEST INTEREST OF YOUR CLENT?

Since short sale transactions will typically have some form of tax consequences, it is important that you do not give financial or legal advice to your client. It is best to refer them to their own tax attorney or certified public accountant.

2.         DOES YOUR CLIENT QUALIFY FOR A SHORT SALE?

Not all sellers will qualify for a short sale. The lien holder may require the seller to provide them proof of hardship, prior to a short sale being considered. What constitutes a hardship will vary from lender to lender, so you may want to contact the lender of record to get a guideline of their procedures.

3.         WHEN SHOULD THE APPLICATION PROCESS BEGIN FOR A SHORT SALE?

The listing agent should submit a completed package to the existing lien holder for consideration while the property is being marketed. Be sure to make a notation on your listing that any offers are contingent upon approval of a short sale prior to the close of escrow.

4.         WHAT FORMS/ADDENDUMS NEED TO BE INCLUDED WHEN ACCEPTING AN OFFER TO PURCHASE ON A SHORT SALE?

When you receive an offer on the property, you may want to attach the C.A.R. Purchase Agreement Addendum (PAA). The approved C.A.R. addendums have preprinted language regarding the short sale process and contingency. Consult with your broker if you have any questions regarding which form or forms are preferred by your office.

SHORT SALE PRE LISTING INFORMATION

1.         Obtain letter of permission from Seller/Mortgagor to speak to their lender.

2.         Contact lender, BE NICE!!!!

3.         Determine the banks needs (borrower info, property info, etc.)

4.         Hardship letter, list all monthly bills, income info. Make sure that income info is post loan funding, not pre, (fraud!!!). Obtain a list of repairs needed with approximate costs, termite, etc. Don't talk the property down too much. BE HONEST!!!!!

5.         Determine true market value of property, with documentation (Market Analysis)  30 days marketing time. Be accurate..

6.         Try to get something in writing from the bank.

7.         Commissions should be negotiated with the bank as well as borrower prior to putting in MLS.

8.         Borrower must be made aware that they will receive NO CASH.

Graham Holmes

Realtor - e-Pro

Vice President

Mission Grove Real Estate Inc.

For all your Real Estate needs.

Offices in Hemet & Yucaipa

On the web at: www.missiongrove.com

E-Mail to:     gholmes@missiongrove.com

Office: (951) 927 8940

Cell Phone: (951) 634 4118

Fax: (951) 927 8942