Home Prices in Northern CA
details about a Short Sale
What's the 1st Step before deciding to do a Short Sale?
In your initial Consultation with Ginger Hopp, she can determine if you qualify
for the "Short-Sale" or you may possibly qualify for one of these new "Loan Modifications" if you want to keep your property with a lower payment and lower loan balance.
If you have no income, then it will be a Short Sale you need.
The Lender must approve your Short-Sale, and they make that decision based on your Hardship
and other financial informaiton included in your "Short-Sale-Package".
How Much will it Cost to List my Property for Sale with Ginger
- NO COST to a distressed
home seller, who "Qualifies" for a Short-Sale, when that Property is Listed for Sale with Ginger Hopp.
The Seller(s) are required to co-operate in the preparation of the "Short-Sale Package" as outlined on **Exhibit
A. Additionally, the seller(s) will be expected to co-operate fully during Open House Showings and other showings of
the Property to potential Buyers. In a normal Listing, it is always the Seller who pays the
6% Listing fee to sell their property.
What is a "Short-Sale Package" ? Your "Short-Sale
Specialist", will need to gather financial information from you in order to prepare this "Special Short-Sale Package. So,
understand that this Package is like a blue-print and is mandatory so that the Lender can make the decision
to sell Short of your loan balance; it has to make sense to them. Even if I bring them several Pre-Approved Buyers all putting
offers on the property at current Market Value, the Lender cannot accept the deal without this "Short-Sale Package".
If the lender is able to see the entire picture at a glance, they usually take the deal, and can then decide if
they approve of the Buyer and his offer.
Why is a "Short-Sale Package" so important? The
bank does not have a department capable of putting together a "Short-Sale Package" and they rely on the Listing Agent
to prepare these documents for them in order to bring the matter before their board and make a wise financial decision for
the bank. If it makes sense on paper, they are willing to act. If they don't have any facts in front of them, their hands
are tied and they can do nothing except wait for the buyers to bring in all of the cash, including fees that were added due
to a Notice of Default and other fees. Obviously, the borrower couldn't even pay the payment, how are they going to find
the additional expenses? But, with the "Short-Sale Package" showing the bank a win-win for both the bank and the borrower,
now they can say "Yes" to the Short-Sale. Banks are not in the business of owning property; they don't really
want to own it. Remember, the Bank is in the business of
earning interest, NOT selling houses. In years past,
a short-sale was only granted with extremely severe hardships, for instance you were thrown off a horse and one of your arms
is now paralyzed keeping you from doing any kind of work. So, now you can't make enough money to
pay the mortgage payment. Today, because of all the foreclosures, lenders have much more relaxed rules; they want to
make a deal. Having a "Short-Sale Package" gives them the CYB documents they need to write it off, too. You cannot
hire just any agent, you need a "Certified Foreclosure Specialist" who knows how to prepare your complex package for the lender.
It is important to you, the home owner, to know that you
need this special "Short-Sale package" put together by someone who knows what they are doing.... because
you want to avoid Foreclsure and salvage your credit from any further damage, so that I can help you purchase another
home again when your income situation is remedied.
Can I use any Real Estate Agent, for instance my
Cousin? Yes, but NO, you shouldn't. Even if your cousin or neighbor is
going to work really hard for you, it is not a good
idea for you to hire them unless they are trained and know how to do the short-sale package; you may end up in foreclosure
after all. Even though your Cousin or neighbor agent didn't mean to hurt you, they just might anyway from lack of know-how.
If an Agent has lots of Short-Sale Listings, they're an Expert,
right? NO, not necessarily. You
should always use a Realtor who is also a "Short-Sale Specialist", not just an agent who happens to List a lot of Short- Sale
Homes for sale; there is a big difference.
During the first six months of 2008, the statistics have shown that
the majority of real estate agents who took Listings for Short Sales, only had a 10% success rate in getting the Lender to
accept an offfer of a Pre-Approved Buyer. What,
only 10%? Even when there were
multiple offers of many Pre-Approved Buyers? Sad, but true. That
means that 9 of those 10 homeowners were counting on that agent to save their house from foreclosure, and the agent didn't come through for them. Many of those agents simply complained that
they had lost the listing, saying now it was going into foreclosure and another agent would get their deal. They also
made comments such as, "the Lender didn't want to lose so
much money", or that "the lender was just taking too long to decide", as if it was the Lender's fault that no offers
were accepted on time. What about the home owners who lost out? The truth of the matter is, that the lender didn't have the proper documents
because the agent didn't have a clue about "Short-Sale Packaging", and so, the lender didn't get the necessary docs needed to
be able to say "YES" to an upside down offer. The property ended up in the next stage of the foreclosure
process, where an Asset Management Company would be responsible to hire another real estate agent to re-List the property
as a bank-owned property, also called an REO. So the unknowing borrower
lost the battle to save their home from foreclosure, plus their credit
is marred with a foreclosure now. Their credit was not Saved for a future home purchase. It's nobody's fault, just a total lack of information with the
agent, the lender and the seller.
You must be willing to save yourself
from a foreclosure and be willing to co-operate with the Marketing of your house so that as your Realtor, In
the meanwhile, you can stay in your house while it is being sold. Remember, Time is of Essence.
Call me for your free consultation, no matter where you live.
If I don't work in your area, I will be sure to find you a "Certified Foreclosure Specialist"
DO NOT JUST GIVE IT BACK TO THE BANK, YOU HAVE
In the past, a short sale had it's repercussions’.
You would recieve a 1099 in the mail at tax time and you would have to pay an average of 28% on the deficit
amount that the bank lost; that was how the bank was allowed to write it off. The 1099 was the defecit difference, and
since the home-seller was already distressed and couldn't pay the payments, they usually couldn't pay the tax either.
They would either arrange payments with the IRS or they would be slapped with a tax lien.
Lucky for you, Bush signed the 2007
Tax Relief Act. Bush to your rescue? The relief act will forgive your short-sale debt and you won't have to pay that tax to the
IRS. CA recently implemented a similar tax relief program. You will need to check with your tax person to see how it
affects you personally. Since the bank is still allowed to use the deficit as a tax write off, you may
still recieve a 1099. Of couse, your Tax person will ultimatley be the one to advise you on how this will affect
you in your situation; everybody's taxes are handled differently.
** Exhibit A will be presented during the Free Consultation, with No Obligation.