I would rather poke my eye with a sharp stick than deal with another short sale.
I can't decide which I like the least: the long, agonizing months it takes the bank to look at a file or the call you get from them saying they can't find your file and you have to resubmit everything.
The first step in doing a great job is being passionate about what you do. I'm a firm believer in that. I'm 100 percent on the "loving real estate meter" but when it comes to "loving short sales," the needle isn't budging, baby.
When it comes to short sales, here's what I am good at: Referring you to the best people in the business. Enter short sale expert Sylvia Howard. I sat down with her to talk about her passionate love of short sales.
1. What is a short sale?
Don't let the name fool you, "short" doesn't mean a short period of time. It is in reference to a homeowner selling their property with the consent of their mortgage holder for an amount less than the amount they owe. Let's say a person has a mortgage of $225,000 and now their home is worth $155,000. They can sell their house at market value with their lender's permission. It's a "short" payoff. The process can be a lengthy one so bring your patience to the table. It's worth the wait in many cases.
2. Why would you ever want to do one?
It brings me great satisfaction helping homeowners who don't know where to turn. They are stressed, they are "underwater" and the bank isn't cooperating with them. It's interesting that the bank seems to take realtors more seriously than homeowners. I want to help my neighbors get back on their feet. I think its criminal what some of the banks get away with. I know what it takes to make the banks pay attention.
3. What do you need from sellers to have a successful short sale?
The number one thing one needs is patience! You also need to maintain your property and get your paperwork to your realtor as soon as possible.
Here are some of the things you will need to submit. • Hardship letter (signed and dated) • Copies of two most recent bank statements • Copies of two most recent pay stubs • Copies of past two years' tax returns (form 1040) • Copies of the past two years W2s • Financial statement (income vs. expenses). Signed and dated
4. What sort of hardship does the lender consider legitimate?
• Family illness, injury or death, illness or injury in the extended family, particularly if it forced relocation • Job relocation when the property is equity deficient • Job loss or significant income loss • Divorce or split of domestic partners • Adjustment in mortgage payment or unforeseen increase in living expenses
5. Can you explain the Mortgage Forgiveness Debt Relief Act of 2007?
The 2007 law was passed to save struggling homeowners from getting whacked twice, first by the sagging housing market and second by the Internal Revenue Service. It has been extended through 2014.
6. What would surprise people the most about a short sale?
Every transaction is different. I can not emphasize enough that you will need patient, patience, patience.
7. Have banks got any better at getting short sales done?
In my opinion, yes. Many of them have gotten better but some are still lagging.
8. How does a short sale affect your credit?
A short sale does affect your credit but it's better than a foreclosure because you can purchase a house sooner. In some cases, FHA is lending to short sellers as quickly as one year after a short sale.
9. What can people expect during a short sale consultation?
You will be talking about your financial situation. You'll answer questions about how much you owe on your mortgage, if you have refinanced, if it's a purchase money loan. This process can be stressful, however a good agent will be discreet, diplomatic and compassionate.
10. Why is it important to have an experienced real estate agent involved in your short sale?
A good agent will be ethical, compassionate, easy to reach and a good communicator. They should have completed short sales and know the process. It could make the difference in the success or failure of a short sale. Unfortunately, there are unethical agents out there taking advantage of people when they are vulnerable. Beware of fast-talking agents who don't explain the process or other individuals who are out there wanting to buy short sales for their own gain. Always consult a lawyer and an accountant.
If you've got short sale questions or would like to talk to Sylvia about short sales, please contact us. You can hear Sylvia Howard on That Real Estate Show with Diane Brennan and Linda Williams Saturdays at 3 p.m. on News/Talk 92.3 KTAR.