10 Frequently Asked Short Sale Questions
Here are 10 frequently asked short sale questions that are very helpful especially if you are just getting started or considering short sales as a means to acquiring pre-foreclosures. 1. What happens to the seller’s credit rating when they allow an investor to short sell their property? What typically happens is the loan will show up as “paid” on their credit report; however there will be a notation that says “settled for less than originally owed” or something along these lines. It is more favorable for a homeowner to short sell than to have a foreclosure on their credit report. 2. Where do you find investors for short sales? Depending on where you live, you may see investors who advertise with bandit signs or in your local newspaper. Call the investors directly and ask them if they are experienced in doing short sales and if they would be interested in working with you. Another good place is your local real estate investors club meeting. 3. Define a short sale? A short sale is really a form of pre-foreclosure sale and occurs when the mortgagee agrees to accept less than the loan amount to avoid foreclosure. A negotiated short sale results in a discounted purchase price for the buyer. The buyer would finance the acquisition much the same as in any conventional realty acquisition… but without the luxury of time. 4. Can an owner profit from a short sale? The seller cannot profit (monetarily) from a pre-foreclosure short sale.. But there are always exceptions to the rule. 5. How do bankruptcies affect the possibility of doing a short sale? Most mortgagees won’t consider a short sale if the homeowner is in bankruptcy…why? Because negotiating a short sale payoff is considered a collection activity. Collection activities are prohibited in bankruptcy. 6. Can somebody tell me what documents do I have to include in a short sale package? Documents depend on the lender. Each lender has different requirements. It is typical to require hardship letter, purchase and sales contract, ECOR, settlement statement (HUD 1), net sheet, pay stubs, bank statements, personal financial sheet (monthly budget), amongst other things. 7. What percentage of mortgage companies send someone out for an appraisal on a possible short sale? All lenders order a BPO or full appraisal of the property before making their decision to accept or reject the short sale offer. This is there only way of assessing the value of the property. 8. How late in the pre-foreclosure process can you start a short sale? Try to allow a window of at least 90 days to effectuate a mortgagee approved, pre-foreclosure Short Sale. 9. What is a Due on Sale clause? “Due on Sale” Clause (DOS) Provision in a mortgage or deed of trust calling for the total payoff of the loan balance in the event of a sale or transfer of title to the secured real property. A contract provision which authorizes the lender, at its option, to declare immediately due and payable sums secured by the lender’s security instrument upon a sale of all or any part of the real property securing the loan without the lender’s prior written consent. For purposes of this definition, a sale or transfer means the conveyance of real property of any right, title or interest therein, whether legal or equitable, whether voluntary or involuntary, by for deed, leasehold interest with a term greater than three years, lease-option contract or any other method of conveyance of real property interests. Standard language which states that the loan must be paid when a house is sold. 10. Will banks allow a short sale when the owner has some or a good amount of equity? If a property has what the lender would consider a substantial amount of equity, chances are they would consider allowing the property to foreclose and then reselling it closer to the retail value. Focus on homes that do not have much equity. Your job will be to create the equity in the home by negotiating a successful short sale.
IRS is Eyeing Real Estate Practitioners
The Internal Revenue Service is paying close attention to the definition of “Real Estate Professional” when it reviews tax returns. Under the IRS Code and Regulations, real estate professionals are defined as those who spend 750 hours or more annually handling real estate-related activities. Real estate professionals with property investments cannot record more than $25,000 in losses against their real estate income if they earn less than $100,000 and no losses at all are permitted if they earn more than $150,000. However, there are no limits to taking real estate losses against other forms of income. Given that the IRS definition of real estate activity requires “brokering” property sales, purchases, or leases, two cases in California reveal auditors declaring that real estate agents are not real estate professionals.
Don’t Fear Falling Prices
Yale Professor Robert Shiller, whose Case-Shiller 20-city home price index has become an industry standard, says people shouldn’t fear gradually falling home prices. “There’s nothing troubling about a gradual correction of home prices. If we keep our incomes at the current level and home prices go down we are richer, we can buy more housing,” Shiller says. But if home prices fall suddenly, Shiller says that could undermine housing as well as consumer confidence and the economy. There has been a misperception that houses will constantly appreciate, Shiller says. “Sometimes people will try to imagine that we can have both high home prices and affordable housing. But I can tell you that doesn’t add up,” he says. “You either have high home prices or lower home prices. And lower home prices are what we want, and people shouldn’t be afraid of that,” Shiller says. “Most of us care about our children and grandchildren, and these people have to buy houses so why would we want high home prices? We want economic growth, we don’t want high home prices.”
Preparing for the New Year… it is that time of year… Nathalie answers
Listen in as Nathalie answers some of the many questions that come in to us regarding our shows, the real estate industry and most of all planning, staying on course, all while life happens…. The only thing constant is change…how do we steer the ship…..how do we know we are on the right path…and tips to prepare for the New Year Listen in as Nathalie answers some of the many questions that come in to us regarding our shows, the real estate industry and most of all planning, staying on course, all while life happens…. The only thing constant is change…how do we steer the ship…..how do we know we are on the right path…and tips to prepare for the New Year
Real estate agents/brokers- how to get business without paying a fortune-
Don’t miss today’s show. Real estate agents/brokers download at later date if you are not able to attend. Wes McKibbon, a seasoned veteran in the real estate industy for 30+ years as an FHA Underwriter, now entreprenneur in the real estate education sector owns The Home Buyer’s Korner, a network of professionals on a social media platform consisting of real estate agents, brokers, mortgage lender’s and general contractors and is developing a nationwide Google+ community for the same has cracked the code. Organic placement in weeks, not years….. this was easy to do years ago when the Internet was way less traveled, but not today. Find our how you can jump on the bandwagon and have a lot of fun!!! Don’t miss today’s show. Real estate agents/brokers download at later date if you are not able to attend. Wes McKibbon, a seasoned veteran in the real estate industy for 30+ years as an FHA Underwriter, now entreprenneur in the real estate education sector owns The Home Buyer’s Korner, a network of professionals on a social media platform consisting of real estate agents, brokers, mortgage lender’s and general contractors and is developing a nationwide Google+ community for the same has cracked the code. Organic placement in weeks, not years….. this was easy to do years ago when the Internet was way less traveled, but not today. Find our how you can jump on the bandwagon and have a lot of fun!!!
Real estate agents/brokers – prospecting has not changed as much as you think…
Listen in while Ed Naworol with Fidelity Bank Mortgage and Nathalie discuss tips and lessons on prospecting that still work as they did years ago……. even with the Internet Listen in while Ed Naworol with Fidelity Bank Mortgage and Nathalie discuss tips and lessons on prospecting that still work as they did years ago……. even with the Internet
Buyers- tips to buying your home to live in, not only as an investor
Buying your home to live in is different than buying an investment property. Call in and share your stories, advice, tips and listen in to hear tips as to why buying your home to live in is different than what you look for in an investment property. Make your wish list and work backwards. Buying your home to live in is different than buying an investment property. Call in and share your stories, advice, tips and listen in to hear tips as to why buying your home to live in is different than what you look for in an investment property. Make your wish list and work backwards.
Nishi System
Osamu Murata who is 88 years old as of August 15, 2015 doesn’t take medicine, walks miles daily joins us in a replay discussing his system to a long and healthy life. “Home is where the Heart Is” and our body is also home for us that we need to take care of in order to enjoy our material home. Osamu Murata who is 88 years old as of August 15, 2015 doesn’t take medicine, walks miles daily joins us in a replay discussing his system to a long and healthy life. “Home is where the Heart Is” and our body is also home for us that we need to take care of in order to enjoy our material home.
Homeless, so many issues, roller coaster rides, we all need a place to call home
Have you ever been homeless, no where to go? No where to turn for shelter? Meet two people today who have dedicated years of their lives to help the homeless. We all need a place to call home. Charlie & Diana Lorenz, assistant Pastors at Word of Life church have dedicated years to helping thousands of people. Feedinghawaiitogether.org feeds many and homeless isn’t what many think. Have you ever been homeless, no where to go? No where to turn for shelter? Meet two people today who have dedicated years of their lives to help the homeless. We all need a place to call home. Charlie & Diana Lorenz, assistant Pastors at Word of Life church have dedicated years to helping thousands of people. Feedinghawaiitogether.org feeds many and homeless isn’t what many think.
Reverse Mortgages- if you are 62 or older listen in and agents/brokers this is
Reverse Mortgages have changed dramatically!!! Listen in to learn how they can benefit you and your loved ones. So much covered today in one hour. Steve Sless, our guest today is a pro at Reverse Mortgages, listen in, call in and ask questions. He is going in depth as to the benefits of a Reverse Mortgage in today’s day and age. Simply not what they used to be…. Reverse Mortgages have changed dramatically!!! Listen in to learn how they can benefit you and your loved ones. So much covered today in one hour. Steve Sless, our guest today is a pro at Reverse Mortgages, listen in, call in and ask questions. He is going in depth as to the benefits of a Reverse Mortgage in today’s day and age. Simply not what they used to be….