Wellington Short Sales- Facts vs Fiction- Myth #2 Busted!
Read Short Sales Myth #1 Busted first before you read myth #2.
The next myth that we are going to bust is that you have to be broke to do a short sale. I get this one all the time. A seller will call me and say that they need to do a short sale but that their attorney, their real estate agent or one of their well meaning friends told them they would not be able to do a short sale because they have a pension plan, they have a 401k or they have money in their savings account.
Since we already know from busting myth #1 that the only constant thing is change- the rules change constantly and that each lender and investor does things differently. There is no such thing as one way to do a short sale.
Three addages that come to mind in this scenario are:
- There are exceptions to all the rules.
- Rules were made to be broken.
- The rules are always changing.
You can be approved for a short sale even if you are not living on your very last penny. You do not have to be totally down and out to be approved for a short sale. You also don't have to have a financial hardship. The words, financial hardship are relative at best. What that means to one person and one lender may mean something else to another lender and situation.
We have been getting short sales approved for both those who are more than broke and others who have enough money to get by to those who are just trying to soften the blow.
The worse the hardship is of course the more you are going to be relieved of the obligation to pay back a deficiency and other matters that are involved in the short sale approval process. But the myth busting is about the statement that you can do a short sale if you have money and that is simply not true.
The more financially stable you are the more you will be asked to contribute to the short fall. We have negotiated down those deficiencies to as low as 10% of the deficiency.
We are working with a older couple who have well over 1 million in their retirement accounts and savings accounts that they need to live the rest of their lives with as they are in their early 80's. In our negotiations with the bank is not that they have this money it is rather that at their age they may have to stop working tomorrow. Anthing can happen and they need that money to help them in their twilight years. So instead of a pay off deficiency of $120,000 we are able to negotiate with their lender to accept the buyers offer along with a sellers contribution of $20,000 in cash at closing to make the deficiency go away.
So blanket statements like you have to be penniless to get a short sale approved is false and does a disservice to your clients if clients are allowing foreclosures to take place without even trying to do a short sale first.
Look out for Myth #3 Busted
Read Short Sales Florida Myth #1 Busted here.
For more information about short sales read our series at Short Sales Florida.
Contact Nestor Gasset and Katerina Gasset, CIPS, Realtors®, International Properties and Investments, Inc. Licensed Realtors® in Florida at 561-753-0135 to list your property for sale or to purchase a property in Wellington, Royal Palm Beach, Loxahatchee, Lake Worth, Hypoluxo Island, Lantana, West Palm Beach and the rest of Palm Beach County Florida and Port St Lucie Florida. We are accepting referrals.
To view all the Wellington Florida Homes For Sale Click here and then click on Search For Homes We know Palm Beach County and will help you get your home Sold if you need to Sell your home and help you buy your Short Sale in Palm Beach County Florida : Call us today.
Disclaimer:The information provided herein is supplied by several sources and is subject to change without notice. Wellington Homes Blog does not guarantee or is any way responsible for its accuracy, and provides said information without warranties of any kind, either express or implied. Entries on Wellington Homes Blog represent the opinions and ideas of the author(s). Wellington Homes Blog does not express the views of International Properties and Investments, Inc or those of the broker.
Copyright © 2009 By Katerina Gasset, All Rights Reserved.*Short Sales- Palm Beach County- Facts vs Fiction- Myth #2 Busted!*
Short Sales-Palm Beach County- Facts vs Fiction- Myth #2 Busted! was first published on South- Florida-Luxury-Living.com.
Nestor Gasset and Katerina Gasset- Realtors®, CIPS, ABR, SFR, GRI, REOS
Hi Katerina...Great Post on Short Sales in Florida, I'm sure you treat each Short sale differently, the important thing is a Seller hire with a Realtor like you that can help them Sell Quickly.
Cheers, thanks for sharing :O))
Great Information as always. Now I have to skip back to #1 and read it!
That's right, Katerina. It's great to prepare the sellers upfront that they may have to contribute, especially if they are more financially sound than others. I have a couple with many thousands in the bank, that think they will not have to contribute a penny, when they own multiple investment properties and have equity in their home, plus positive cash flow. That's not going to happen, but they STILL can do a short sale!
You tell'm Katerina!
The banks will do what's in their best interest! If you can convince them that it's to their good any thing is possible! Banks are only concerned with the how the seller's hardship affects and causes additional hardship for the bank. Banks with large stocks of REO's are much more likely to accept a short sale than banks with few REO's. Knowledge is power when negotiating short sales, both knowing the sellers position and the banks.
With one exception it never hurts to ask. The exception is an absurd offer that steals the sellers precious time need to find a legitimate buyer.
What's absurd? That's hard to tell ahead of time, certainly offers the bank turned down were absurd, but the same offer three months later might be completely acceptable.
Bill
Katerina, I'm beginning to wonder if some lenders even look at the financials anymore. You are certainly right that what ever worked or didn't work today can be completely different tomorrow. Times they be a changin'
Katerina- Wellington is lucky to have you! What a wealth of information!!
Thats a terrific post! We hope to have short sale expertise here in New York city and communicate this through our blogging!
Good point. Retirement assets are untouchable and the key is to negotiate, negotiate, negotiate. A small unsecured note is a small price to pay to avoid a foreclosure.
Katerina,
Your a wealth of Knowledge !!!!! I have a client who has a job that requires a security clearance. He has a decent retirement and savings account, which he has been using to pay bills & make his mortgage payments. I educated him on how to request a loan modification and the benefits of a short sale should he not qualify for a loan modification. When I educated him that a foreclosure could jeopardize his security clearance he was shocked.
This client verified with his employer that if he missed a mortgage payment or went into foreclosure he would loose his security clearance, thus loose his job. He contacted his lenders and explained his situation to them. The lenders instructed him to submit the same information I had instructed him to submit for a loan modification request, unfortunately his DTI was to high to qualify for a loan modification. Even though he has not missed a mortgage payment they have approved him to do a short sale. His property was listed 14 days ago.
Great info. Thanks so much. This will come in handy. Have a great year.
Great series, I will be reading everyone of these. Did I mention, I hate short sales? I am only dealing with them because they are in the way.