Short Sales Explained

First Thing:

The Bank Pays All The Fees In A Short Sale!

A short sale in the Colorado Sprinsg area, can be an excellent solution for homeowners who need to sell and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy have improved the chances of getting a short sale approved.

But to be technical, here's a more official definition:

A homeowner is 'short' when the amount owed on the property is higher than current market value.
A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.

For homeowners to qualify for a Short Sale in Colorado Springs, they must fall into any or all of the following circumstances:

Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
Monthly Income Shortfall – In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
Divorce - This is a hardship
Upside Down on home value and have to move or just cant afford it anymore
Military Move - If you have to PCS or are ETSing

It is in the banks best interest to accept a short sale and they know it.

_________________________________________________________________________________

___________

A Quick Overview of the Short Sale Process in Colorado Springs

At one time short sales were done infrequently. In recent years they have become more and more a common way for a seller to sell there home. If you have a home that is underwater and you have to move or cant afford it then this is a great option rather than walking away from it or just giving up and letting it go into foreclosure. The process to market the home and get an offer is similar to doing a traditional sale.

Find an agent that knows short sales http://www.ChucksHomeRescuePlan.com
The agent lists the home for the current fair market value. - It's important to note here that the banks go off of the current value of the home not what it is you owe them.
You gather all the paperwork that the Realtor will need to send to the bank for the short sale department. - This is often the most annoying part for the sellers but can kill a short sale quicker than anything. If the bank is missing one item it stops the entire process in it's tracks. Items needed may vary but usually consist of 60 days bank statements, 30 days pay stubs, Hardship letter, monthly financials showing what comes in and what goes out. 2 years tax returns.
Once an offer is received the packet is put together by the Realtor and sent in to the bank.
The bank assigns a negotiator that will order a valuation of the home from a third party. It can be just another CMA from a different Realtor or a full blown appraisal. This is the value that the bank will use to determine if the offer is good or not. 30 - 60 days
Once the value is given to the bank the negotiator sends it to the investor that owns the mortgage to see if t meets there criteria. If the Realtor and negotiator are on it then it should be approved or at least receive a counter.
If the offer is accepted then the bank will send an approval letter to the listing agent. This letter will give a close no later than time that everyone needs to meet, usually 30 days. This is also important because the bank many times will put in the approval letter that they are waiving the right to pursue any deficiency. That's a good thing. You have to talk to your CPA about all the tax stuff.
At this point the dates in the contract go into effect such as inspection, loan, and appraisal deadlines. Usually short sales are sold as is. The inspection is for the buyers peace of mind.

The times and steps above are not written in stone but are a good example. If your loan is FHA or VA, then the banks will have a slightly different flow. The good thing about those short sale is that the VA and FHA tell you upfront they will not pursue a deficiency. The trouble with them is that if the valuation comes in too high (verifiably too high) that it can be almost impossible to get up corrected until 6 months go by

Short Sales are a niche in real estate that some Realtor's, myself included like to do and others hate and wont even show short sale if they can help it.

For this reason I can not stress enough to find a Realtor that does know the intricacies of a short sale. http://www.ChuckWartman.com

Please feel free to leave a comment or contact me directly. Have a great day!

_________________________________________________________________________________

CLICK HERE TO SEARCH HOMES FOR SALE

_________________________________________________________________________________

A Little About Me...

I first came to Colorado Springs while serving in Special Forces in the Army. Liked it so much, I stayed!

The demanding Real Estate market conditions in the Colordo Springs area requires a full-time,
fast -paced and dedicated agent to meet the needs of both the Seller and Buyer. I am committed to customer service and making it happen for you!

I strive to fully understand your wants, needs, and goals and put your interest above all others.

Please call me for a no obligation meeting.
I look forward to meeting and working with you in the near future.
_________________________________________________________________________________

Today, nearly 1 out of every 6 homeowners in America is behind on mortgage payments. These are tough and frustrating times. Now more than ever, it's important to identify your options. What about Loan Modification? Foreclosure can be avoided, your credit can be saved, and your financial future can be salvaged.

Through my experience handling distressed properties at RE/MAX Properties, Inc., I've found that homeowners today have more questions than answers about their circumstances. I have created this site to help you understand the possible solutions to foreclosure, as well as provide a detailed explanation of short sales, which may be the best course of action for some homeowners. Short Sales Explained .

I'm also offering you FREE Reports to explain your options and help you decide on a course of action. The idea of losing a home can be overwhelming, and I feel it is vital for you to have all the facts necessary to make an informed decision.

As an agent with the CDPE® Designation, I have a strong and unique appreciation of the factors affecting the market, and know that there are options available to you.

Rescuing families one home at a time!

Read my article on HubPages

If you would like to know more about your options, please call me at 719.231.5525.

I am here to help … in any way I can. CONTACT ME NOW FOR HELP.

Chuck Wartman