What are the Steps and Process of a Southeastern Michigan Short Sale ...To Avoid Foreclosure

May 20, 2012 - PRLog -- Completing a Short Sale is one of the most difficult real estate transactions in all of Southeastern Michigan 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.

We find 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't answer the questions below, we recommend seeking another opinion.

What is a Short Sale?

A short sale in real estate is selling a property for less than is owned on the property. For example:
Loan Amount: $250,000
Market Value of Real Estate: $150,000

In the above example, the property is upside down a minimum of $100,000. In order to get the bank to accept an offer at $150,000, 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 to complete a short sale?
   
   * Most 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 an application that is even off by one item. Our team ensures that your paperwork is completely filled out the first time so you have the greatest chance at acceptance.


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 or employeement 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 having a team such as us do this work for you, the number of calls you receive will be reduced by over 50%.


What kind of information will the bank as 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 and dated hardship letter
   * Copies of last 60 days pay stubs
   * Copies of P&L statements (if you are self-employed)
   * Completed financial worksheet - signed and dated
   * Copies of last two years tax returns
   * Copies of last 60 days bank statements
   * Copy of investment account statements
   * Copy of Listing Agreement
   * Estimated net sheet (Preliminary HUD-1)
   * Identification of liens on the property

   * We 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 from. It is important that it is truthful and explains what happened to the fullest extent possible.


What do I do with the letters I receive from the bank?

   * Read, review and get a copy of them to your short sale specialist.    

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

   * Unfortunately, there are many individuals out there who do not care about helping homeowners 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. This being said, there are several investors out there that are good, as well. They are in it to help people, and make a few dollars for themselves while doing that. (in which there is nothing wrong with that)

How do I choose someone to represent me in this transaction? 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 that the property is worth. They are not trained in negotiation and not trained on how to deal with the banks and their 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 short sale specialist who has helped both buyers and sellers on short sale properties will tell you that not all short sales are created equal. Success on short sales depends on a variety of reasons:
 

What does it cost to have you work with us on a short sale?

   * We will not charge you any fees, whatsoever! Your lender will gladley pay our fees to help avoid foreclosing on the property.

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 and do I still have to keep calling the bank?

   * Yes, communication is extremely important. The number one reason for foreclosure is a lack of communication. We prevent this from happening because we do the communication for you. You have a job, but this is OUR job. We get authorization to speak with the lender on your behalf, and make sure you stay informed of what is happening.


How do I know what is going on?

   * Your Short Sale Specialist will communicate with you regularly throughout the process.


Why should I use You?

   * We choose you. We choose to work with clients we believe that we can help. Our experience and success in short sales and negotiations allows us to identify the clients we can help. If we don't believe we can help you, we will tell you right away.

What if I have a pre-payment penalty?

   * Let us 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?

   * We specialize in negotiating with the bank and making sure they understand that working with us 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 one o four short sale specialists. Our goal is to make sure the bank works with us and you to resolve this stressful situation.


Why would a bank agree to do this? Don't they just want my home, anyway?

   * The bank doesn't 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.

Thanks for reading, Rick Giese.


Visit My Loan Modification Website www.miloanmodhelpdesk.com/
Visit My Short Sale Website http://www.miforeclosurehelp.com/
Visit My Short Sale or Stay Calculator Site http://www.mishortorstay.com


Rick Giese is a real estate associate broker at RE/MAX Advisors.
Phone Toll Free: 1-800-274-5656. email: Rick@RickGiese.com