Short Sale Information

Short Sale Facts

Understand Why a Short Sale can help you!

Completing a real estate short sale is one of the most difficult transactions in all of real estate. It is important to know that the company and team you hire to complete this process for you have expertise in this area.

I found it beneficial to make sure our clients know what is going to happen throughout the process. Below are the most common questions that have been asked by our clients. If you are speaking with others and they can not answer the questions below, I recommend seeking another opinion.

What is a Short Sale?

A short sale in real estate is selling a property for less than is owed on the property. For example:

Loan Amount: $450,000
Market Value of Real Estate: $375,000

In the above example the property is at a minimum upside down $75,000. In order to get the bank to take an offer at $375,000 a team of experts who specialize in negotiations with banks and marketing short sale properties to the real estate community are needed.

Common Questions

How long does it take?
Banks can take up to 60 days to give an official approval of an offer once it is received. This process can be improved by communication with the bank by your representation. Open and consistent communication is what improves the process.

Ensuring that the required paperwork by the bank is correctly filled out increases acceptance by over 45%. Some banks will destroy any application that is even off by one item. Our team ensures that your paperwork is correctly filled out the first time so you have the greatest chance at acceptance.

How long do I have until I have to move out?

The bank is required to let you know when they have filed the notice of default with the county recorders office for the county you are in. The majority of banks do this after you have become 90 days late on your mortgage or 3 consecutive mortgage payments. From this time the earliest a sale date can be set is 90 days from that date. So you may not have to move out until 90 days after your third missed payment.

What are the consequences of doing a short sale?
Completing a successful short sale will mean that you will not have a foreclosure reported on your credit. This will also mean that on lending applications where it asks if you have had a property foreclosed upon you will be able to answer no. This is one of the single best consequences of doing a short sale. By requesting a short sale with your lender or myself do this work for you the number of calls you receive will be reduced by over 50%.

What happens if it doesn’t work?
If your property does not sell as a short sale it may end up being foreclosed upon by the bank.

It is of the utmost importance to get the bank an offer to review so that they can decide how they can best help you and to accept the offer you have received. It is for this reason that you need to have a realtor as myself, who specializes in short sales and will present offers to the bank on your behalf.

What kind of information will the bank ask for?
Each bank has their own separate set of forms that they can ask to be filled out. In fact if you have two loans the amount of information can be different between both banks. The types of information that can be asked for as follows:
*Signed hardship letter
*Copies of last several paychecks for all owners of the property
*Copies of P&L statements if you are self employed
*Complete financial form Each bank has their own standard
*Copy of Tax Returns
*Copy of Bank Statements
*Copy of Investment Account Statements
*Copy of Listing Agreement
*Estimated net sheet
*Identification of liens on property
I will guide you through all of the requirements regardless of which bank and which form that is required.

What is a hardship letter?
A hardship letter is a statement of how you and your family got behind on your payments. Banks are people too and they need to know what happened in order to help you out in the best possible manner. Events that should be included in

A hardship letter are as follows:
*Loss of Job
*Loss of overtime or income from a job
*Family issues pending divorce, medical bills, other family issues
*This is one of the main pieces of information that the bank uses in order to make its decisions off of. It is important that it is truthful and explains what happened to the fullest extent possible.

What if I have declared bankruptcy?
Bankruptcy can delay a sale of your home at a trust sale. Your bankruptcy attorney may have additional advice for you.

If you have declared bankruptcy please let me know and give me your attorneys information so I may be in contact with them.

What about bankruptcy?

Bankruptcy can delay the sale of your home. Please refer to your legal representation for detailed questions on bankruptcy.

What do I do with letters from the bank?
Read, review, and get a copy of them to me. These letters contain different pieces of information and it is critical to review all of them as they may have legal consequences to them. Banks can send you letters in regards to the following:

Loan Modifications – They can modify your loan so that the payment is more affordable for you and your family.

Loan forbearance This is a temporary adjustment by the bank of the requirement to pay your mortgage. They can do this for reasons such as health, job, or family issues. The amount that you do not pay is generally added to your loan balance or spread out over multiple payments.

What do I do about people offering to buy my house if they want me to just sign the deed over to them?

Unfortunately there are many individuals out there who do not care about helping home owners in a time of need. They in fact only care about being able to profit from your situation. Our recommendation is that you make sure to have a real estate professional look at anything prior to signing any offer from one of these individuals. If the person has a legitimate offer they will not care who reviews the offer. Do not sign over the deed and beware of Investor Option Contracts.

How do I choose someone to represent me on a short sale?
The agent you select first of all needs to have the expertise and training necessary in order to complete a short sale transaction.

The team should be experienced with loss mitigation negotiations.

The representatives should be able to tell you up front if they can help you and what they are going to be doing for you.

Shouldn’t I just call my local realtor who markets in the area?
Unfortunately 99% of real estate professionals are not trained on how to handle a property where more is owed than the property is worth. They are not trained in negotiations and not trained on how to deal with the banks and the banks representatives.

Agents need to have specialized training in order to complete this process so as to prevent further action by the bank against you. In addition agents need to have a deep understanding of the process and be able to explain the value to the bank of working with the home owner.

Are all short sales the same?
No. It would be great if they were as it would make things easier for home owners. Any team who has helped both buyers and sellers of short sale properties will tell you that not all short sales are created equal. Success on short sales depends on a variety of reasons:
*Uncooperative banks
*Inadequate disclosure by the seller
*Poorly prepared buyer
*Banks delays
*Poor communication by listing agent with bank
*Buyers back out
*Seller fails to cooperate

Will I get a 1099 for the difference between the sale price and what I owe?
Yes. Each bank is different and the vast majority of banks will send you a 1099 for the difference. The difference or shortage may be forgiven under the Mortgage Debt Relief Act. I recommend you contact your tax advisor for assistance.

Why shouldnt I just let the home go to foreclosure?
Your credit! Foreclosure is one of the biggest damages to your credit that can be done. You will have to disclose the fact that you had a foreclosure every time you try and purchase a new property in the future no matter how long it has been since you had the foreclosure.

What do you cost?
The bank decides. Since the bank is losing money on the transaction they will decide what I get paid. The most important thing in this process is you the home owner and I hope to help you with a buy or purchase.

Is it better or worse if I have two loans?
It depends. Having two different lenders is one of the hardest short sales that can be done. It depends on how each bank has viewed the transaction and how they have both been communicated with during the entire process.

Is communication important & do I still have to keep calling the bank?
Yes and Not with me! The number one reason for foreclosure is a lack of communication. I stop this from happening because I do the communication for you. You have a job but this is my job! I get authorization to speak to the lender on your behalf. I take care of the communication and make sure you stay informed of what is happening.

How do I know what is going on?
I communicate with you at a minimum of every week every 7-10 days. You also receive e-mail communication from me.

Why should I use Bobby?
I choose you; I chose to work with clients we believe I can help. My experience and success in short sale negotiations allows me to identify the clients i can help. If I do not believe I can help you Iwill tell you right away.

What if I have a prepayment penalty?
Let me worry about that for you so you can get back to your life.

Can the bank come after me or do they just get my property?
I specialize in negotiating with the bank and making sure they understand that working with me and you is in everyone’s best interest. The bank can ask for more information or seek other means to get payment if you have lied on your mortgage application and may or may not do this depending on the situation. If you believe you may have lied on your mortgage application please tell me. Our goal is to make sure the bank works with us to resolve this stressful situation.

Why would a bank agree to do this don’t they just want my home?
The bank does not want to own your home. The foreclosure process is a very expensive process for the bank to carry out. There are legal fees, property fees, court fees, and additional staff required by the bank to handle foreclosures for a bank. Their goal is to prevent properties from going into foreclosure.

Cant I just do this all myself?
You could, but would you go to court without a lawyer if the side that was facing you had 15 lawyers? The fact is that this is a complicated real estate transaction with a large lending institution. This process can take 100s of hours for a trained professional to complete. Most people do not have the time to specialize in completing this kind of transaction. Our team is here to take the worry out of the transaction for you.

Who is Bobby?
I represent first time buyers, move up buyers, investors and network with real estate brokers who specialize in helping people get out of their properties that they can no longer afford or no longer wish to own. Regardless of your situation, the condition of your property, or how many you own we can help you. Everyone runs into difficulties now and then. My goal is to make your stressful situation go away so you can get back to your life.

Contact Bobby Moreno

(661)412-2080 Direct | (661)303-4792 Cell

(661)902-5139 eFax | Cal BRE Lic# 01700033

Miramar International Inc. 10800 Stockdale Hwy

Suite 101, Bakersfield, CA 93311

Miramar - Bobby Moreno