ken@getyourphx.com
602-456-9388
You need to get out of a bad situation, but you don’t want to foreclose on your home. You don’t want years of bad credit. But you know that you need to do something!
Don’t let short sales scare you!
Many of the scary things you’ve heard about short sales are no longer true. Much of the short sale process has become easier over time and we can help you get that house sold so you can move on with your life.
Moreover, the market is improving quickly (see here for data) and so it most likely will be easier to get short sale approval from your lender.
The first step is to understand the basics of short selling. The first half of this article will help you with some important definitions and process questions. The second half of this article will tell you how my Get Your PHX team gets them closed.
1) A Couple Key Definitions:
Foreclosure. If you have not paid your mortgage for more than three months, the bank can foreclose. They will give you notice to pay in full by a certain date. If you do not pay, someone else can buy your home or the bank will take it back.
Something to note: banks are going to lose money on both a short sale and a foreclosure. They may lose less on the short sale, if they are willing to negotiate. A good Realtor representing you will know this and will know how to keep the home from going to foreclosure.
Short Sale. Basically, you get authorization from the bank to sell the home for less than you owe before it forecloses. You and your agent list the property. Once you get a reasonable offer, you go back to the bank and ask for their permission to sell at that price. This is where you need a quality agent –one who can get your property seen, set a reasonable price and coordinate with the bank for the quickest possible sale.
If you are at the point where you might want to sell, please contact us at ken@getyourphx.com.
Here are some more things that can help you with your decision:
2) What is Going on in the Market
The number of short sales that are selling has increased, but the entire inventory of homes has shrunk quickly. If you look at the chart, below, you will notice that the percentage of short sale homes that are active is starting to go down in relation to the normal and foreclosed sales (REO). This means that you have a better chance of selling your home quickly and at a better price.
Some Realtors make a serious mistake when listing a short sale. They tell their clients that they will sell more quickly by listing the property at a low-ball price in the hopes of grabbing attention and buyers. The problem here is that the bank simply won’t go for it. They already have an idea of what they want to get for the property. If they don’t like the price, they could spend months deciding just to tell you “no.”
You need a team that understands the market, KNOWS what is realistic and KNOWS how to make it through the process.
4) Questions and Answers
Q: How do short sales work?
A: Here is the abbreviated version: You meet with an attorney and financial advisor. You list the property and let your lender know you want to short sale. You get an offer that you like. We communicate that to your lender that you got an offer. They (hopefully) approve the price. We continue with the escrow process and close! Really, this is getting so much easier than it was even a year ago!
Q: Will my credit suffer less from a short sale than from a foreclosure?
A: Foreclosure counts against your credit score more than a short sale does. A foreclosure takes longer for you to become eligible to buy a home again. However, you need to speak with an attorney and a financial advisory. We are not financial advisors or tax advisors.
Q: Will I have to pay some law firm lots of money up front to negotiate for me?
A: We don’t believe you need to do that. While you should consult an attorney, we use a process (below) that could save you a lot of money while still making certain you are protected.
Q: Will I have to pay the Realtor’s commission if I sell? I can’t afford that.
A: A good agent will get their commission directly from the bank. Talk with us.
Q: Are there are any up-front fees?
A: There should not be other than an initial consultation with your attorney. Unlike some agents, we work with attorneys and title companies to save you money. We do not believe that you need to pay one of those expensive law firms to handle the entire process for you. See below.
Q: Why are Short Sales Moving now? Are banks moving faster now?
A: Banks are getting faster and some real estate teams are more familiar with the process and are creating direct relationships with the decision makers. This is resulting in better odds that the file will be reviewed and approved. This is where we excel.
5) The Get Your PHX Process
1) We have great relationships with attorneys who will charge you for an initial consultation fee, which will include looking over the short sale price agreement letter from the bank to make certain you are protected. 90% of the time, this consultation and service should cost about $250. Sometimes an attorney would have to charge extra if you needed extra representation (but not for simple questions). This will save you a lot of money over paying a law firm to handle the entire process.
2) We work with a title company who will work with our team to communicate with your lender as the process moves forward. Be advised that you can use whatever attorney, financial advisor or title company that you want.
3) We list your property after doing a thorough analysis of the market conditions and your best price point.
4) We work to get your property seen by likely buyers and we bring the best price that we can get in the market. Please see this page to learn more about how we get homes sold.
5) We communicate with your lender, the title company, your attorney and you to complete a smooth transaction.
Did you know that short sales are now happening in about three months, rather than 6 or 9 months, as they had a couple years ago?
Call us today at 602-456-9388 and we can make it happen for you!
