Saving Your Investment through Short Sale

You cannot have mortgage without a security interest in the property, giving the lender the right for a foreclosure when you, the borrower, fails to pay the home loan. Like all homeowners, you do not want to have anything to do with a foreclosure as it can only blemish your homeowner’s credit. One best way to avoid that predicament is to resort to the short sale option.

With the rising numbers of foreclosures in the country, many homeowners are now turning to short sale, which is a win-win solution for both sides as well as a good way to avoid foreclosure. Yet again, since short sale is relatively new in the real estate industry, many homeowners are having some doubts about what short sale really means, and how it can help the homeowners.

Defining Short Sale

Short sale is defined as a sale of real estate property, an special agreement between the borrower and lender, in which the lender offers to sell the property at a lesser rate than the amount owed. But it does not mean that the borrower is released from his accountability to repay the remaining balance of the mortgage.

With our recent experience of the global economic crisis, resulting to an increase of mortgage rates and a decrease of home prices, homeowners found themselves at a difficult situation wherein selling their house for a profit to pay the mortgage becomes very hard. This has also resulted to significant numbers of foreclosures.

However, it was once said that necessity is the mother of invention. This time around, we have the short sale option which proves to be highly beneficial for all concerned rather than engaging in foreclosure, which involves in hassle processes and hefty fees.

Two Types of Short Sale

1.    Deficiency judgment. Generally, all short sales have the so-called deficiency balance or the remaining balance of a home loan. This is the first type of short sale wherein you will be under obligation of the law to pay the remaining loan balance. Prior to a short sale, you and the lender should reach an agreement with regards to the deficiency balance.
2.    Payment in full. As the term suggests, this is the type of short sale wherein your remaining home loan balance is already considered paid in full without pursuit of the deficiency judgment. In short, you will no longer need to pay the deficiency balance between the laon balance and the sale cost.

Criteria for Short Sale

Although short sale a good option  than foreclosure, there are still lenders who do not want it. Or there are some cases that the borrower does not qualify for the option. Here are some of the criteria for short sale:

A homeowner is experiencing a disaster or a death in the family resulting to the difficulty to pay the mortgage.
A borrower has no other asset to pay the loan other than the property.
A homeowner should make a default in loan repayment for an agreed period of time.
The borrower will require the borrower a letter of hardship that explains the short sale option.

As implied above, short sale is a much better option to go when a homeowner is facing a financial crisis, but does not want a foreclosure. It will be best for you to hire the assistance of a short sale expert or a real estate attorney who can advice you more on this matter.

Do You Need a Realtor For a Short Sale?

Short sale homes are a great choice if you’re after a good price, whether for your first home or an investment property. But just like anything in real estate, it always comes with a risk. That’s why a Realtor always comes in handy when you buy short sale homes. Not only do they help you manage the risk, they also guide you throughout and help you make the right decisions.

With a good Realtor on your side, you can buy short sale at the price you want and with terms you’re comfortable with. Read on for more reasons why you need a Realtor to buy short sale property today. Professional planning Short sale or not, it takes careful planning to find the perfect home. When you decide to buy short sale, it’s always followed by decisions on budget, timing, location, and several other factors.

A Realtor can help you map out the steps to Buy Short Sale property all the way to closing day, and make sure each choice you make works to your advantage. Wider range of   choices. People who buy short sale are often unsure where to start looking. Although short sales can be listed as conventional homes, not all of them are available on public listings.

Most agents have access to exclusive listings and can search public ones specifically for short sales. That way, you can cut down on search time and move on to buy short sale faster. Better negotiating because your offer has to be approved by the bank, there’s always a bit of negotiation involved when you buy short sale. Sure, you choose to buy short sale for the discount, but the bank wants to get as much as it can out of it.

Your Realtor can help you set a budget and plan out strategies so you can buy short sale at a price that works for both parties. Efficient processing Short sales typically take place within a short time frame because the seller is given a deadline for closing. That’s why people who buy short sale often have to make quick decisions and scramble to meet the dates.

With a Realtor, you can get all the paperwork done on time, avoiding unnecessary delays that can let the deal slip out of your hands. Financing assistance finally, a Realtor can help you arrange for financing to help you Buy Short Sale Property. They can help you get a pre-approval—a common requirement to buy short sale today—and help you choose a mortgage that best suits your capacities.

Doing a Short Sale Will Not Hurt Your Credit

Tim Mackey is a Scottsdale-based lawyer who handles all types of bankruptcy and short sale filings for clients at the Mackey Law Firm PC. According to Mackey, short sales can be excellent opportunities for struggling homeowners to sell their homes and be released of their debts. While many people overlook these opportunities out of fear or harming their credit scores, the good news is that this fear is often unfounded.

In general, selling a home via a short sale will not hurt a homeowner’s credit score, and certainly the process will not be as damaging as a foreclosure would be. For many families, the choice between continually struggling to make ends meet or trying to sell their homes seems easy. Due to universal drops in home prices, however, selling a home for the amount that is still owed on a mortgage is not necessarily an option for every struggling homeowner. For people in situations like these—where the home itself may no longer be worth the amount owed on a mortgage—a short sale is almost always going to be a better choice than going through foreclosure or continuing to pay for a property that one cannot afford.

Benefits of Doing a Short Sale

For many homeowners in this situation, one common concern is how to find another place to live in if there is a significant drop in their credit scores. With more and more rental companies looking into FICO scores before leasing to new tenants, this is a valid concern. Luckily, homeowners in Scottsdale who work with lawyers on their short sales can be confident that their credit scores will not be damaged to the point where they won’t be able to find new places to live.

In fact, depending on the bank that a homeowner is working with, he or she could be eligible to buy another new house in a matter of just two or three years. That is a major benefit for the homeowner who can oftentimes qualify to buy a new home just two years after going through a short sell, because homeowners who go into a foreclosure typically have to wait a full four to five years before their credit scores are high enough to get a mortgage.

While filing for bankruptcy—which is another option for homeowners who cannot afford their mortgage payments—will damage a person’s credit score, it isn’t as bad as foreclosure either. Homeowners who file for bankruptcy can usually get another mortgage on a house an average of two years after their initial bankruptcy filing. For people whose banks are willing to work with them on short sales, going through the process is almost always the better choice when comparing a short sale to a foreclosure or a bankruptcy.

Why a Short Sale Might Not Work

Although a short sale might be the most favorable option for those who are unable to pay their mortgages, unfortunately, the process sales can sometimes fall through. While successfully selling a home through this process is generally better on one’s credit than other options, there are a number of reasons why a homeowner might not be successful in his ability to short sale a home.

First, if there are no interested buyers, a short sale might not work. Even if there are interested buyers in the market, that doesn’t necessarily guarantee that the deal will go through. The lending bank’s willingness to accept the deal is imperative in a short sale case, since it is the bank that ultimately has the power to decide whether to accept the offer from the new buyer and discharge the current homeowner of the debt he or she still owes on the house.

Secondly, problems with short sales can sometimes come up when the seller starts the short sale process too late in the game. Banks are less likely to work with a homeowner who only becomes interested in trying to short sell a home late in the process.

Lastly, a short sale might not go through if the person selling the home is trying to do it himself without the help of a short sale lawyer. In fact, a lot of our clients have tried to do short sales themselves, and they end up coming to us after they have failed.

Of course, for many families, deciding whether or not to go through a short sale can be a difficult choice. And there is no single solution that works for everyone. But for those who have excessive amounts of debts on their homes—and whose banks have agreed to work with them and release them of their deficiencies—a short sale can be an excellent option to release the burden of debt without necessarily ruining their credit scores.

This article is for informational purposes only.  You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel.  Publication of this article and your receipt of this article does not create an attorney-client relationship.

How Does a Short Sale Work When Borrowers Are Facing Foreclosure?

“How does a short sale short work?” is a question I am often asked. As a real estate investor who invests in foreclosure homes, I recommend borrowers who have become delinquent with loan payments to discuss the option of short selling with their lender. However, it’s important to call mortgage lenders at the first sign of distress because real estate short sales are no longer an option when homes enter into foreclosure.

To properly answer ‘how does a short sale work’ is challenging as policies vary by lender. While each mortgage provider adheres to similar short sale protocol, the exact procedure will deviate.

The first step of short selling involves contacting the bank’s loss mitigation division. When mortgagors fall behind with loan payments their account is assigned to a loss mitigator. This person is responsible for helping borrowers develop a plan to save their home while curing mortgage arrears.

Bank loss mitigators typically offer other types of strategies such as deferring loan payments, loan modification, or real estate forbearance. Short sales are usually the last option offered because lenders incur a financial loss.

Short sale literally refers to selling the property ‘short’ of the balance owed. The majority of lenders hold mortgagors responsible for monetary deficiency between the short sale price and loan balance. However, some lenders will enter into ‘payment in full’ contracts, meaning they accept the sale price as satisfaction of the loan.

When mortgagors are responsible for deficiency amounts, but unable to pay the amount in full, lenders can obtain court ordered deficiency judgments. Once a judgment is placed against borrowers, it remains on credit reports until fully repaid. Banks can enter into wage garnishment to collect the debt, so it is important to work out a feasible payment plan when deficiency amounts must be paid.

Borrowers should be prepared to submit detailed financial records to their assigned loss mitigator. Most banks require pay stubs, bank statements, tax returns, and a list of income and expenses.

Banks often require borrowers to submit a short sale hardship letter as well. Hardship letters provide borrowers with the opportunity to outline the details that caused them to fall behind with mortgage payments. The hardship letter is a crucial element in obtaining short sale approval, so mortgagors should take care when writing it.

Lenders are usually more willing to enter into short sale agreements with borrowers who have engaged in strategies to rectify their financial challenges. Therefore, it is a good idea to provide details of action taken within the letter of hardship. These might include obtaining a second job; engaging in car pooling; selling a second car; or eliminating cell phone or cable bills.

The home must be sold quickly once short sale approval is granted. Lenders often require mortgagors to have a preapproved buyer in place before entering into real estate short sales. Others give borrowers time to list their home for sale through a real estate agent. Buyers are required to obtain preapproved financing unless they plan to purchase the short sale property with cash.

The average duration of the short sale process is 4 to 6 months. Lenders report real estate short sales to credit bureaus, so borrowers should consider engaging in credit repair strategies soon after the sale. Short sales can reduce FICO scores by upwards of 100 points or more. If borrowers commit to paying bills on time and do not incur additional debts, they may be able to qualify for a mortgage loan within 2 to 3 years.

The Key to Successful Short Sales Transactions – Understanding Motivations

We have spent a lot of time talking with our users over the past year about what works (and perhaps more importantly, what doesn’t work!) when managing your short sale pipeline. One of the key differences between successful investors and agents and ones that struggle (and a key factor in improving your successful closing rates) is quite simply putting yourself in all involved parties shoes and finding common ground. You need to think about the motivations of the bank or lender, the homeowner, the real estate agent, the buyer(s), and any 2nd lienholders that drive the decision making process. Understanding how these motivations conflict with each other will help you find common ground to get deals closed.

Let’s run through them one by one!

The Bank or Lender (Primary Lienholder)

This is it – the big kahuna. The bank has the keys to the castle, so don’t underestimate their motivations when it comes to a short sale transaction. The bank’s short sale decision making process is driven by a single factor – money. Remember – the bank’s ideal situation is that you continue to make your payments on the agreed-upon schedule. This ensures that they make the interest on the loan and get the balance paid in full.

Let’s circle back to motivation. What motivates the bank to accept a short sale offer? If you guessed $ $ Money $ $ , you are right! It’s a bit of an inverse situation though – banks get into loans expecting to be repaid the principal balance plus interest. In this case, you are asking them to take less money – and the only way that is going to work is by demonstrating that the alternative is even MORE less money. In other words, the burden of proof is on you to motivate the bank to accept your offer by proving to them that their financial position will be worse if they do not accept the short sale. This is typically done by carefully explaining to the bank what the outcome will look like if they go all the way to foreclosure, and then additionally proving that foreclosure is imminent.

So, let’s recap on how to motivate the bank -

Prove that foreclosure is a more financially damaging than a short sale and back it up with evidence! (See screenshot below)
Prove that foreclosure is imminent and cannot be prevented and back it up with evidence! ( A good short sale hardship letter helps)

The Homeowner

The homeowner is in a different situation. They are falling behind on their payments, are hopelessly underwater, and it appears to them there is no way out!

Similar to how the bank is mitigating their losses in a short sale, the homeowner also wants to mitigate the damage to themselves and their families. The motivating factor for a homeowner to pursue a short sale is getting themselves out of a bad situation that is going to get worse. The interesting thing about a short sale from a homeowner’s perspective is that, unlike a typical home sale transaction, the homeowner / seller really does not care any more about the sale price of the house. This is because they are already underwater – and to them, getting out of ,000 or ,000 really isn’t significant – it is the getting out that is significant.

The only time that changes is when the lender is looking for the homeowner to assume a deficiency judgment. In that case, the homeowner will still be motivated to minimize the loss, since they will be responsible for it after the sale completes.

Use the homeowner’s motivation to get out of their situation to get them to play their part in the transaction – including providing necessary supporting documents about their financial situation and a good, strong hardship letter. It is best if you can negotiate away any deficiency judgment (HAFA properties will automatically have no deficiency) to keep the motivation of the homeowner strictly on leaving the property – but recognizes this directly conflicts with the bank’s motivation – money. Our recommendation in this scenario is to try to work for the homeowner’s benefit – carrying a deficiency without having any asset to back it up is not a fun situation to be in.

The Realtor

Like any real estate transaction, realtors want to close the deal and make commissions (under the guidelines of NAR or other realtor ethics codes). It’s their job, after all!

A motivating factor for agents is most certainly the time involved in a transaction. Time is money, and many real estate agents despise working with short sales because (yes, it is true) they take more effort than a standard transaction. Being in the middle of a real estate transaction is enough work, now you have to throw in the multi-month bank approval process and due diligence phase and deal with additional red tape, for the same commission.

Motivating realtors, then, can be done by improving their processes or saving them time. If you are the real estate agent, then your motivation should also be to save more time. If a particular home nets you a commission check of 00, and it took you 30 hours to make it happen, vs. 60 hours for a similar check on a short sale, you worked for half the rate on the short sale! ( an hour vs. an hour, respectively).

How do we improve time? By building efficiencies and work flows into the process, especially for repetitive tasks. Short sale software like Short Sale Artisan is certainly one way to improve efficiencies. So is a simple spreadsheet. Another one is simply making win-win situations right off the bat by reading blogs like this and understanding how to meet the motivations of the parties involved in a transaction to improve both rate of a successful close as well as reduce the effort needed for each transaction.

Another motivating factor for agents is simply business. They just want business – quantity is important! Even if agents do not like short sales, the bottom line is being a successful agent in today’s market depends on understanding and working the short sale process successfully. If you want to have a good pipeline of work going, then you need to include short sales in your portfolio.

The Buyer

The buyer’s motivation is the same in a short sale transaction as a normal transaction – it is all about getting the best price! Whether the buyer is an investor looking to eventually flip the property or a family looking for a place to live, the price is what matters. Many buyers are attracted to short sales and are motivated to work through one despite the onerous timelines and red tape simply because they often represent a good deal.

We again have a conflict here – the conflict that in a normal transaction exists between the Buyer and the Seller, in a short sale transaction is between the Buyer and the Lender. In a short sale, the buyer still wants the lowest price possible, but this time the lender, not the seller, wants the highest price.

Like any other real estate transaction, keeping a buyer motivated depends on their needs. For a family, it might be demonstrating a property to be a good family home, in a good neighborhood, or demonstrating a great value. For an investor, it might be demonstrating the ability to improve the value of the property and resell it at a future point in time, or keep it and rent it out. In any case, there is really nothing unique with the motivations of an end buyer in a short sale transaction to differentiate from your typical transaction.

The 2nd Lienholder or Subordinate Lender

The second lienholder, if there is one, has the exact same motivation as the first lender – money. So the same rules apply. The only additional wrinkle with the 2nd lender is that their “loss” in a short sale is typically much more than the first lenders. For example, a second lienholder may have a principal balance of ,000 and only expect to recieve 00 at closing – a measly 4% of the principal balance in such an example.

This is why the case needs to be ironclad that foreclosure is imminent (in which case, the 2nd lienholder would get nothing). The bottom line though: if there is any doubt as to the validity of the hardship, a 00 check may not be enough to keep the lender motivated to accept the terms of the short sale arrangement. So it is doubly important to make your case well to these parties!

Keep the motivations of everyone in mind

The bottom line: when handling a transaction, you are effectively juggling the motivations of all parties involved in the short sale transaction. Keep that in mind when you are dealing with individuals, and you will close more deals and be able to find common ground when disputes occur quicker. Flexibility and some political posturing apply!

What are your thoughts on motivations and how to use them to inspire success? Post in the comments!

How To Find An Investor To Complete Your Short Sale

Get An Immediate Offer

If you decide to try a short sale, you should take steps to close the transaction as fast as possible.  This will help to limit the damage to your credit.  Each month that the bills aren’t paid is another negative mark on your credit.  In some cases, the months of missed payment cause more credit damage than the actual short sale.

Each month the mortgage isn’t paid increases the balance of the loan.  Unlike a typical sale of real estate, a short sale is more about the speed of the transaction then receiving the absolute highest price for the property.

After all, if you’re doing a short sale you can’t receive any funds from the sale.  It’s important to keep that in mind.  The lender will have a loss and they will not allow any compensation to the homeowner.  Therefore, the ultimate goal with the short sale is to eliminate the mortgage, reduce credit damage, and get into a better housing situation.   Often the best way to achieve this is to work with a committed buyer who can make an immediate offer on your property.

Benefits Of Working With A Real Estate Investor

There are many benefits to working with a real estate investor who can make an immediate cash offer on your upside down property.  

An immediate offer will speed up the process and save valuable time.  Since a legitimate offer must be received before the lender will consider a short sale, working with an investor can increase the likelihood of success and help to limit the damage to your credit. 

An additional benefit of working with a real estate investor is having a committed buyer involved.  A knowledgeable investor understands the short sale process and expects the inevitable delays.  In some cases it may take 3+ months to receive lender approval on a short sale.   These delays can lead to problems for the distressed homeowner.

One of the key factors with the low closing rate of short sales is buyers often back out of the transaction.  Buyers back out for a number of reasons but often it comes from frustration with lender delays. 

Another issue that comes up with a typical homebuyer is they make several offers on many short sales and bank owned property.  However, most homebuyers can only close on one property.   Once they close on one, they back out of the others and this leads the seller in a bad position.   When working with a real estate investor this is not an issue. 

With short sales in 2010, losing buyers is a widespread problem for agents and sellers.  Working with a committed real estate investor completely eliminates this major issue for a seller. This could be the difference between a foreclosure & a successful short sale.

Some of the key benefits of working with an investor on your short sale include:

Immediate cash offer saves valuable time for you.
You do not have to spend any time showing your house and hunting for a buyer.
We are committed to closing the transaction and will not back out because of lender delays.
Quicker finish to a stressful situation

In summary, a short sale is a very complicated and time consuming process.   There are many more benefits of working with us on your short sale.  In order to improve your chances of success you should consider working closely with a cash investor who will remain committed to completing the transaction.  

To find short sale investors in your area just jump on the Google and search for them.  For example in New Jersey you can search “New Jersey Short Sale” for a short sale investor such as USshortsalebuyers.net, or Florida Short Sale for investor like StopForeclosureFastFL.com.  In Oregon try “Portland Short Sale” and you’lll find an investor such as StopForeclosurePortlandVancouver.com who can put an immediate offer on the table with the lender. 

Investors like these are out there in every market.  If you need an immedaite offer to send your lender be proactive and find them.

Top 5 Short Sale Myths: A Message to Santa Maria Short Sale Sellers

Top 5 Short Sale Myths:  A Message to Santa Maria Short Sale Sellers

Myth #1:  I have to be an owner occupant to qualify for a short sale.   Where did this myth come from?   I’ve done short sales for investors and non-owner occupants.  They happen all the time.  I just listed a home where the lender told the owner to do  a short sale on their rental property.  You can sell your investment or rental property via short sale.

Myth #2: I’m upside down and that is not enough to qualify for a short sale.  First off, rarely do people want to short sell just because they are upside down.  Usually there is a trigger:  a job loss, interest rate change, divorce, etc.   Every lender uses different criteria to approve short sales.  The handwriting is on the wall, and some lenders understand that being severely underwater means you are at risk for default later on down the road.   Many lenders prefer short sales to loan modifications.  Being upside down impairs your ability to sell your home which can be a financial hardship.    

Myth #3:  I need to be bankrupt to qualify for a short sale.   In cases where a borrower has assets, many times banks will negotiate a small contribution in exchange for approving a short sale.  They don’t advertise this fact openly, but it occurs with regularity.  Sometimes, no contribution from the seller is required at all.  You don’t have to be completely broke to qualify for a short sale.

Myth #4: I need to miss payments to qualify for a short sale.  Banks approve short sales without missed payments.  This is also better for your credit.  If you know that the time is fast approaching that you will not be able to make your payments, you can approach your lender about a short sale while you are still current.

Myth #5:  I can’t afford to pay a real estate agent’s commission so I can’t afford a short sale.   Typically, you don’t have to pay your real estate agent’s commission when going through a short sale.  All the major expenses of selling your home are included in a short sale.  This includes escrow, title and real estate commissions.  The real estate commission is deducted from the lender’s “net recovery” as an expense of sale. 

* Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement — this article does not offer legal and tax advice

Guide to Buying a Short Sale

Currently out of over 20% of all residential listings in the United States are estimated to be under water.

Short Sale Defined

This occurs when it is reasonably believed that the listing price or purchase price of the property may not be sufficient to cover payment of all costs and liens including commissions, taxes, prorations, mortgages and other similar charges. Not all such circumstances qualify for a short sale and only the seller’s lender can make that determination.A successful short sale is contingent upon the seller’s lender’s approval of the purchase price, terms of the agreement and the settlement statement. The seller’s lender must agree to accept a payoff which is less than the balance due on the loan or other debt.When making an offer, you must decide how much time you are willing to wait for the short sale approval. We recommend allowing 45-60 days with the option to cancel the agreement or extend this time period. Keep in mind that it could take much longer and that there is no guarantee of the short sale being approved. On average, our buyers find that it takes about 90 days from the time they submit an offer until it is approved, countered, or rejected.The lender is not a party to the agreement and is under no obligation to approve the agreement and allow the short sale to take place. Just because the seller agrees to your price and terms, does not mean that the lender will. The lender is not required to consider, respond, or approve an agreement.An offer has been accepted by the seller and submitted to the lender for approval.

What does it mean when the description says “an offer has been accepted by the seller and submitted to the lender for approval?” Most Multiple Listing Services requires this sentence to be placed in the public remarks when the seller has already signed a contract with a buyer and is going to continue to market the property and accept back-up offers.

Will the seller and/or lender accept multiple offers?

The seller may continue to market the property and accept and submit multiple offers. The seller may continue to market the property, accept offers, and enter into purchase agreements with other buyers, and submit those contracts to the lender for approval. If a different agreement is approved, your agreement automatically terminates.
The seller may continue to market the property and accept multiple back-up offers. The seller may continue to market the property and accept back-up offers. However, back-up offers will not be submitted to the lender for approval until your initial offer has failed.
The seller may not continue to market the property. During the time period that you allow for the approval process, the seller cannot market the property, accept other offers or submit other offers to the lender for approval.

How long does it really take?Our research indicates that the average short sale in Florida took just over 8 months from the time it went on the market until a successful closing. From August 2009 to August 2010, there were 221 successful short sales closed in our local Multiple Listing Service.The shortest short sale took 15 days. The longest took 2 years and 4 months. The average took 8.3 months and the median was 7.2 months. Again, this is the amount of time between listing to closing. On average, our buyers find that it takes about 90 days from the time they submit an offer until it is approved, countered, or rejected. It is difficult to gather data from our MLS about the time it takes from when an offer is submitted to the lender until the offer is accepted, rejected, or countered. Because most sellers and their agents leave the listings as “active” in the MLS even after accepting one or more contracts, the listings are usually not marked “under contract” or “pending” until the contract is approved and a closing is imminent.

Are you serious?
We believe the average time of 8.3 months is somewhat misleading; it appears that many listings do not initially go on the market as short sales. Many sellers attempt to sell their homes for enough money to cover the outstanding mortgage(s). After a few months on the market and several price reductions, these listings turn into short sales.

Well I don’t mind waiting if I can get a good deal…Following the same logic, the final sale prices tend to be lower than both the original listing price and the most recent listing price. On average, short sales sold for 17% below their original listing price and 5% below their most recent listing price. However, when you take a closer look at the numbers, separate from the averages, 15% of short sale listings sold at or above the original listing price and 40% of short sale listings sold at or above the most recent listing price. This can be attributed to the listings that initially went on the market at a below market price with the intention of soliciting several offers and getting the short sale process started as soon as possible. Also, many sellers and their agents will change the most recent listing price to reflect the approved short sale numbers.

What percentage of short sales actually work out?
Although the answer is difficult to obtain given the available data, we believe approximately 40% of attempted short sales result in a successful closing. Out of the 572 ss listings in our local market that went on the market from August 2009 to August 2010, only 221 closed. 157 listings expired and 194 were withdrawn from the market. Despite some listings being double counted if the seller went through several agents or attempts at selling, this is our best guess. Keep in mind that some listings will also go through several offers and several buyers before an agreement is finally approved. Some buyers walk away before closing and some banks have unrealistic expectations. Unfortunately, many unsuccessful short sales result in foreclosure.When deciding if you should buy a short sale, consider the following:

The amount of time the short sale could take – are you willing to wait?
The complexity of the situation – how many mortgages and liens are attached to the property?
The experience of the buyer’s agent and seller’s agent – can they keep the contract together?
The probable final sales price – is the deal worth the wait? Is there even a deal?

Chase Short Sale Negotiations

“Major banks are coming up with more efficient and user-friendly processes for short sales in a bid this help more homeowners out of foreclosure. JPMorgan Chase, for example, has taken steps to educate borrowers on the short sale process and help them get approval. The short sale Chase process can still take time, but borrowers now have better control over it. Here are some tips on Chase short sale negotiations and how you can improve your chances of getting approved.

Obtain A Short Sale Packet

Chase offers an online information packet detailing the short sale process both for new short sale Chase applicants and those who have previously applied for loan modification or have a pending short sale. It also includes the basic forms you have to fill in, plus a checklist of supporting documents you have to provide. Simply fill out the forms and send them along with other short sale Chase requirements by fax or post.

Hire A Short Sale Agent

Borrowers are allowed to represent themselves in a short sale, but an agent can help you get better results and offer tips on Chase short sale negotiations. Since they know the market better, they can lend some credibility to your case and explain your situation to the bank, as well as deal with potential buyers. Make sure to write an authorization for your agent so they can handle your personal and financial information during the short sale Chase process.

Make A Proposal.

Your short sale proposal should be as detailed as possible, so that the bank can see how much the short sale will cost them. Your agent can help you get market information and other data that can support the terms you’re proposing, and give you an edge in Chase short sale negotiations. Make sure to take into account your home’s value, your mortgage balance, and estimated selling costs including agent’s commissions and processing fees.

Prepare Backup Documents.

Some of your documents may be lost during processing, and this can extend your short sale waiting time. Make copies of all the documents you submit, so you can furnish them as needed and avoid unnecessary delays in Chase short sale negotiations. If you have any documents that can help your case, such as a medical certificate or divorce papers, don’t hesitate to include them in your package—chances are the bank will ask for them later on, and you’ll cut the short sale Chase process by a week or two.”

What is the tips of short sale

“Short sales have become a popular recourse for struggling homeowners in the past two years. As financial distress hits more and more borrowers, many turn to their lenders’ short sale departments to steer clear of foreclosure. But what is a short sale? How does a short sale really work? Does it apply to all homeowners? How do you qualify? This guide explains the tips of short sale and how to do short sale.

What It Is

A short sale is an agreement between you and your lender allowing you to sell the home for a price lower than your outstanding mortgage balance. Your lender then accepts the proceeds as payment for your loan and forgives the rest. The mortgage is then settled and you’re free of obligations, without having to go through the foreclosure process. Lenders usually agree to sell a short sale home because it costs them less than a foreclosure, and leaves the responsibility of selling to the borrower.

Pros and Cons

The main advantage of selling a short sale home is that you’re safe from foreclosure, which damages your credit more than a short sale does. You don’t get to keep your home, as you do with a loan modification, but you limit the impact on your credit report and keep your credit options intact. Short sales usually work best for borrowers who have little or no equity in their homes, as their value cannot cover what is owed on the loan.

Getting Approved

The best candidates for short sale home selling are people who are in financial distress and have no other means to pay off their mortgage. Lenders usually look into borrowers’ assets and bank accounts to see if there are other ways to settle the loan, such as seizing other properties. You may be asked to provide a statement of assets and liabilities, along with standard documents such as bank statements, tax returns, and pay stubs.

Selling The Home

Once you’ve been approved to do a short sale, the next step is finding a buyer. This can be the longest part of selling a short sale home, as most cities have large inventories and stiff competition for home buyers. Have an experienced short sale agent help you market the home and show it to as many potential buyers as possible. Offers on a short sale home have to be approved by the bank, so make sure to choose only the most viable bids and keep constant touch with your lender to make sure your short sale is moving along.”