Qualifying The Short Sale Seller

By
Real Estate Broker/Owner with Rulnick Realty, Inc.

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

"It's Wendy... It's Sold!"

Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

Call Wendy Rulnick 1-850-650-7883 ext 204

email itswendy@rulnickrealty.com

www.rulnickrealty.com property searches and community info

 

Wendy Rulnick is the marketing choice for sellers on the Emerald Coast who want to list and get their homes and condos sold in Destin, Sandestin, Bluewater Bay, Santa Rosa Beach, 30-A, Watercolor, Seaside, Rosemary Beach, Seacrest Beach, Kelly Plantation, Regatta Bay, Destiny and more.

Rulnick Realty

 

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Rainer
24,818
Veronica DeCarolis
Weidel Realtors - Flemington, NJ

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

Jul 18, 2008 08:27 AM #1
Rainmaker
238,410
Angelia Garcia
Pure Realtors - Dallas, TX

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

Jul 18, 2008 08:27 AM #2
Rainmaker
216,639
Michael Wayne Jackson
Coldwell Banker - Novato, CA
Realtor - Senior Real Estate Specialist

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.

Jul 18, 2008 08:29 AM #3
Rainer
18,532
Tracey Shrouder
360 Realty - Greensboro, NC
Listing Specialist

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

Tracey

www.360realtygreensboro.com

 

Jul 18, 2008 08:45 AM #4
Rainer
2,651
Jim McLellan
RE/MAX Twin City Realty Inc. Brokerage - Cambridge, ON

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

Jul 18, 2008 08:46 AM #5
Rainer
15,428
Patricia Murray
Premiere Plus Realty Co. - Naples, FL

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???  

Jul 18, 2008 08:48 AM #6
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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 18, 2008 09:49 AM #7
Rainmaker
76,060
Robert Monk
100% Realty, Inc. - Santa Rosa Beach, FL
Florida Real Estate

Excellent advice, Wendy, thanks for the post.

Jul 19, 2008 08:33 AM #8
Rainmaker
383,968
Mark Horan
Resident Team Realty, LLC & Toni's Property Management LLC - Saint Cloud, FL
"The Resident Chef" - Resident Team Realty LLC &

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.

Jul 19, 2008 05:36 PM #9
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Robert- Thank you.

Mark- No way I took it!

Jul 20, 2008 03:02 AM #10
Rainmaker
25,925
Jim Quinn
Century 21 - Anaheim, CA
North Orange County Real Estate

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

Jul 23, 2008 07:01 PM #11
Rainmaker
320,116
Kathy Torline
ERA Herman Group Real Estate - Colorado Springs, CO
Colorado Springs Real Estate Blog 719-287-1049

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

 

Jul 24, 2008 12:37 AM #12
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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.

Jul 24, 2008 12:45 AM #13
Ambassador
625,165
Roland Woodworth
Q Realty - Clarksville, TN
Q Realty - Power In Real Estate

Wendy: Great point...

Jul 24, 2008 04:04 PM #14
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Roland- Thanks!

Jul 25, 2008 12:24 AM #15
Rainmaker
25,041
Joseph Alfe
Short Sale Processing Inc. - Chicago, IL

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.

Jul 28, 2008 07:03 PM #16
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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. 

Jul 29, 2008 01:19 AM #17
Rainer
32,233
Sidney Jimenez
Keller Williams - Miramar, FL
CDPE, Short Sale Expert, 954-665-9449,

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.

Jul 29, 2008 12:24 PM #18
Rainmaker
25,041
Joseph Alfe
Short Sale Processing Inc. - Chicago, IL

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.

Jul 29, 2008 02:11 PM #19
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Rainmaker
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Wendy Rulnick

"It's Wendy... It's Sold!"
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