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How Long does it take to close a Short Sale in 2011?

Craig — Thu, 01 Dec 2011 17:02:02 +0000

My all time record currently for a short sale closing in the Phoenix Real Estate Market is 9 months from offer acceptance to closing. That was in 2010. My current 2011 record looks like 7 months and I’m looking at a possibility of a new fast record of about 40 days. While you would think we would be able to manage these things better and faster, we’re still seeing hold ups at the seller’s bank approval stage. Real Estate Agents, Mortgage Agents, Buyers and Sellers seem to be more prepared and open to get the process done, but the banks are still managing quite a bit of data and haven’t found too many ways to stream line the process yet. Soon I hope to see them stream line their process more and standards become more obvious, but of course when we will see that is about the time when this distressed market will come to an end and we’ll start all over again.

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How long does a short sale take?

Craig — Fri, 25 Nov 2011 20:08:59 +0000

Short Sales are not new in the world of Real Estate, and Phoenix was hard hit with this latest Real Estate bust, so all of a sudden every practicing Real Estate agent has become trained and experienced in Short Sales. The number one question I get asked by Seller and Buyers alike is how long does it take to complete a short sale. The answer is: it depends. There are so many factors that are involved in the short sale that there is no real practical way to predict the time and length of the process. My fastest short sale was 60 days and it blew my socks off that it was that fast. My slowest one was 9 months and I never thought we would close that one. Typically (and I use that word very loosely), it takes 90 days. If time is a critical factor in your home search and you are short on time, stay away from the short sales (unless of course you are willing to pay the pre-approved amount if there is one). If you have a short time-table and need to close on the house, you should focus on the resale (owners are selling a normal sale) or lender owned property is your best bet.

If you have any questions about short sales or about Phoenix Real Estate in general, drop me an email or give me a call, I’d be happy to help you.

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Short Sale Myths

Craig — Wed, 12 Oct 2011 04:03:42 +0000

A lot of homeowners having been hearing false information about short sales. I hope I can show how a short sale can prove to be an option for many homeowners.

Myth #1- The bank would rather foreclose than do a short sale.

It is very costly for banks to take back a property through the foreclosure process. Short sale properties can sell for more money than foreclosed properties and if a homeowner is qualified for a short sale, the deal will be considered. If the deal makes sense for the bank, than it will happen.

Myth #2- An owner must be behind on a mortgage to qualify for a short sale.

In the past this may have been true. But, now banks are looking to verify hardship, insolvency, pending shortfall, and/or monthly cash flow shortfall.

Myth #3- There is not enough time to negotiate a short sale before my foreclosure.

Foreclosure is not instant and that it is a process that takes time. A short sale can be done and the foreclosure can be halted.

Myth #4- Listing my home as a short sale is an embarrassment.

The most recent statistics reveal that 1 out of 5 homeowners is in the same situation in the U.S. Homeowners who admit they need help, take action and find a qualified professional to help.

Myth #5- Short sales are impossible and never get approved.

They are more difficult to execute than a normal sale and homeowners need to learn about this process. But, this does not make them impossible. A seller just needs to be committed to the process to be successful.

Myth #6- Banks are not accepting short sales.

Banks don’t want to own real estate. They want to work with you and your real estate professional on a short sale so that they do not have to foreclose.

Myth #7- Buyers are not interested in short sales.

If a short sale is priced at market value, buyers are more than willing to purchase a short sale. Short sales do require a little more patience than a normal sale, but buyers are definitely purchasing short sale properties.

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Homeownership Survival Event

Craig — Fri, 12 Mar 2010 17:00:42 +0000

On Saturday, March 20, 2010 from 10am to 4pm, the Arizona State Escrow Association in conjunction with the Better Business Bureau, Arizona Department of Financial Institutions and the Arizona Mortgage Lenders’ Association will host the Homeowners’ Survival Event at the Steele Indian School Park / Memorial Hall at 300 East Indian School Road, Phoenix, AZ 85012.

Attendance at this community assistance event is FREE. Throughout the day there will be mini sessions on adjustable rate loans, foreclosure/homeowner eviction, short sales, scams, tax implications and second mortgages/credit impact.

Attendees who would like to meet with a counselor from Take Charge America are encouraged to bring copies of their current loan documents, e.g., Note, Truth-in-Lending Statement, etc.

Homeownership Survival Flyer

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The 4 M’s of Hardship

Craig — Fri, 12 Feb 2010 21:30:32 +0000

The hardship letter is the heart of a short sale packet. Without it the banks won’t give you much consideration. There are typically four areas that a hardship falls into: Monetary (job lose), Medical, Marital (divorce), and Military. There is one more, death, but chances are you won’t be writing that one for yourself.

Monetary

The quickest example is job lose. Or in this market, a reduction in pay can also be used. Explain the circumstances of why the salary was reduced or you lost your job and what you have been doing since that happened. One of my clients lost his job a year ago, did everything he could to find a new one and was able to locate employment in another state. He had to relocate to take the job. We showed the banks the documentation of his job lose, let’s from potential employers with bad news and the employment offer from his other job. The bank understood the circumstances and granted the short sale.

Medical

People get sick, and sometimes they get sick enough to require lots of medical attention and the resulting bills. And sometimes this will cause one to lose their job (see Monetary). Again, provide documentation of the medical situation, including a Doctor’s note and the bills as a result of your medical condition. I know of one case where a home owner was diagnosed with a terminal brain cancer and only had 6 months to live. He wanted to liquidate everything so he wouldn’t burden his family with his stuff. The banks again reviewed and accepted.

Marital

During these trying times, it puts extra burden on relationships. Sometimes that will lead to a divorce and these cases are harder for the bank to review. Providing court documents and proof that one or the other person cannot handle the mortgage is the best method with the bank.

Military

Let’s face it, we’re on two fronts right now, and if you are in the military and deployed, your not making the same as you would if you were home doing a civilian job. It’s much easier to go to the bank with your deployment orders, previous salary and military salary and explain it just doesn’t work.

Transparency

The name of the game is Transparency, give the bank everything so they won’t feel like you are hiding anything. They won’t spend a lot of time asking for more documents or investigating on their own. I know one package that exceed 450 pages and the owners said they were apprehensive, they put their entire lives in the 450 pages, every detail of their financial lives and they were scared. It’s a scary process and one that you shouldn’t come to without lots of thought and consideration. Contact an attorney, tax advisor, financial advisor and even a credit advisory until you feel like you have all the details to make the right decision.

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Let’s find a house and then talk to the bank….

When it’s Time to make the Short Sale Decision

Craig — Thu, 07 Jan 2010 17:07:04 +0000

There may come a time when you are faced with a crisis, something that puts you and your family at an uncomfortable financial risk. This could be something from job related to medical related, but none the less, you are losing sleep over the future. In the past you may have relied on your home to provide some extra income in a time of need. But today, it won’t help. In fact, your home has become a large source of the stress and burden.

At this point you start to realize that you don’t know or understand a short sale as much as you thought. You may know friends and family that are talking about it, but do they really know what is going on? You call an agent and if you get me, I’ll tell you what a short sale is, but I’ll stop short of advising you on weather you should do one or not. I’m a real estate agent, I’ve been trained and licensed to help in the purchase or sale of real estate. Part of that knowledge is what short sales are. I’ve also been trained to do short sales, which means that I set expectations with all the parties involved in the short sale. I’ve never been trained or claim knowledge in credit counseling.

Since you are already in a stressful situation, I highly recommend to those that are interested in doing a short sale or foreclosure to contact a FHA Credit Counselor, a Real Estate Attorney and a Tax Attorney to understand the pros and cons of a short sale. I’ve had a few customers take my advise and all of them have stated that they feel much better about their situation and the decision that they made. Everyone of them have stated it was the best money they spent. The FHA Credit Counselor is often free, the Real Estate Attorney is worth the peace of mind you will get and the Tax Attorney will give you confidence with your future. All worth the sound sleep you can get after talking to them.

While your emotions about the situation will probably not go away soon, at least you will find some comfort in knowing the whole picture and making a sound decision for the future of your and your family.

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