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  • Understanding Short Sales-Part 4

    The final misconception I commonly hear is that once the lender schedules a sheriff's sale it is too late to do anything. We often will attempt a short sale at the same time your lender is going through the foreclosure process. After the sheriff's sale you have a six month redemption period in most cases. We can use this time to negotiate with the lender. If you think about it, the banks and lenders do not want your house back. If they foreclose they incur huge costs, which they often don't recover and it is a long and expensive process for them. In most cases they would much rather negotiate with you now to get part of what you owe them instead of going through the whole long process and often ending up with much less. For them it is a business decision and that's how they treat it.

    The best thing you can do if you are faced with the possibility of late payments or foreclosure is to contact a competent Realtor and review your situation and your options. The earlier you do this, the more options you will have and the more damage you can prevent to your credit scores. Every lender and every situation is different. There are sometimes tax implications and legal implications that require further advice from an attorney or tax advisor. There are many people in today's market that are struggling to keep their homes and make payments. Foreclosure is a long, and often uncertain process. A short sale is often the best available option to stop the collection calls from your lender and salvage your credit, but you need a knowledgeable, experienced professional to guide you through the process. Feel free to post any comments to this blog or contact me with any questions.
    Posted Monday, March 31, 2008 6:23 PM by Matt McLaren | 0 Comments

  • Understanding Short Sales-Part 3

    The third common thing I hear from homeowners is that a short sale is going to hurt your credit just as bad as a foreclosure, so why bother. A foreclosure is one of the worst things you can have on your credit report. The foreclosure itself is a huge negative on your credit report, but the other part that really hurts you is the nine to twelve months of missed and late payments you will have by the time the foreclosure process is over. On top of that the lender may hold you responsible for the deficiency between what they ultimately sell the house for and what you owed them, including accrued interest, missed payments, legal fees, sheriff's sale fees, and late fees. With a short sale we are going to your lender, often before you even miss a payment, and negotiating the total amount you owe, what they are going to report to the credit bureaus, what they are going to do with the deficiency, etc. It saves your credit because it closes out the mortgage on your credit report and eliminates future late and missed payments, which is what hurts your credit along with foreclosure. It saves you money by eliminating the accruing interest from missed and late payments, late fees, legal fees, sheriff's sale fees, and penalties that the lender may charge you if they foreclose.
    Posted Friday, March 28, 2008 8:40 AM by Matt McLaren | 0 Comments

  • Understanding Short Sales-Part 2

    The second common misconception I run into a lot is that a short sale can happen very quickly. A short sale is generally not a fast process. We put your home on the market and try to get offers. Once we get an offer we present the offer to your lender and negotiate with them to accept less than the full amount you owe them. This negotiation and waiting for a response from your lender often takes several weeks for each offer. If you are working with an agent unfamiliar with the process, it can take much longer. The lenders are dealing with an enormous number of foreclosures and short sales, so they don't respond to anything quickly. If you submit an offer without all of the required documentation they will simply throw it away and you start over at the back of the line, often losing your potential buyer in the process. The lenders require much more documentation than is required for a typical home sale.
    Posted Thursday, March 27, 2008 6:30 PM by Matt McLaren | 0 Comments

  • Understanding Short Sales-Part 1

    Many people, and even many Realtors, do not fully understand what a short sale is or the process involved in negotiating one. The first common misconception is that a short sale is the same as a foreclosure. This is not true. Foreclosure is the process your lender (mortgage company) goes through to take the house back from you when you don't pay them. It is a long process, but once the lender has the house back they do an appraisal or broker price opinion to decide what they are willing to accept for the house and then they put it on the market to try to sell it. A short sale is when we try to sell your home for less than what you owe the lender before the foreclosure process or sometimes during the foreclosure process.

    I will post Understanding Short Sales Parts 2-4 in the coming days. If you have questions about short sales or if you would qualify to do a short sale, please call me. Feel free to post any comments to this blog. 

    Posted Wednesday, March 26, 2008 11:38 AM by Matt McLaren | 0 Comments

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