FAQ – Frequently Asked Questions
1. What does it cost me to short sell my house to you?
2. Who wins when we do a short sale?
3. Why do I need to work with an Investor to get my short sale properties sold?
4. Have you closed any short sale deals?
5. How many short sales are you working on?
6. Isn’t this illegal?
7. Are your short sale purchases fully disclosed?
8. Are you a licensed Realtor?
9. Is it difficult to collect short sale documents?
10. Do banks really consider offers much lower than the asking price?
11. Are there any alternatives to a short sale?
12. Why should I work with YOU instead of waiting for an end buyer?
We don’t charge anything to buy a short sale house. The potential profit that we make is from the difference between the purchase and resale price of the home.
Everybody wins. Why?
1. The seller stays out of foreclosure. They receive a settlement on their credit which does significantly less damage to their credit than a foreclosure. Nobody wants to go to foreclosure.
2. The bank wins. They receive more money in a short sale than they do when going through a full foreclosure. Often the banks end up holding the property in their inventory for over a year with no income from interest. They also incur holding costs that take even more funds out of the deal.
3. The buyer wins. They don’t have to wait to find out if their offer is acceptable to the bank. They can buy the property at a fair price and have a home that is significantly better cared for than a foreclosed property.
4. The Realtor wins. There are more commissions because more properties are being sold at higher price than a foreclosed property.
5. The Investor wins. The reason for any Investor to be involved in buying property is to make a conservative profit.
A traditional short sale can take months to complete. First, the seller gets into financial difficulty. They might have already waited several months to decide to sell the property. After waiting and trying to solve their house problem, they have decided to list the property with a Realtor. They might very well have started the listing very high to cover the liens on the property plus Realtor and closing costs. But, properties are not selling at the prices we saw several years ago. They eventually lower the listing price and add the MLS addendum to declare something like, “short sale approval required by lender” so they might be able to sell the property.
And they wait.
Sometimes, they get an offer that the Realtor can take to the lenders. The process of negotiation begins. Even this takes a fairly significant amount of time. Negotiating with lenders generally takes 90 days and can sometimes take over a year. The problem is, most buyers are unwilling to wait 90 days or more to find out if their offer is acceptable to the bank. Many potential buyers will not submit an offer on a short sale property because they are not willing to wait.
I can help.
When I as an Investor get involved, I make an offer with the bank right away. I also do the negotiation with the bank and free up a lot of time for the Realtor I’m working with. Once the offer is made and negotiation has begun, we work through the short sale process as quickly and smoothly as possible.
As the negotiation progresses, we update the MLS listing to inform other Realtors and buyers that the short sale negotiations are progressing and the property is becoming more marketable.
My team works on a number of short sale deals. They have closed a large number of short sale deals.
As I write this, I am currently negotiating three deals and looking for more leads.
No. Some people are cautious about short sales. They feel that the traditional way of doing short sale deals is the only way to stay safe. Noting the amount of time required to do a traditional short sale, it should be obvious there are advantages to doing short sales with an Investor. If the Investor is hiding facts from the bank, there could be some legal issues. We are fully disclosing everything to the bank in the initial purchase agreement.
Yes. The purchase agreement we use includes a short sale addendum that clearly tells the bank that I am investor intending to buy and resell the property.
No. I work with qualified licensed Realtors to find, buy, market and sell quality properties.
No. Some sellers who are in financial distress are reluctant to fill out documents. When working with cooperative sellers, collecting a short sale package is not difficult. It is very important that all people on title and listed on the mortgages are present to sign documents. It is possible to get documents signed separately, but this increases the difficulty of collecting documents. Make sure everyone who needs to sign is present right up front.
Yes they do. Some banks are more cooperative than others. The biggest difficulty for banks is the problem of taking properties back from home owners. The more properties they have in their inventory, the harder it is for them to focus on their core business: lending money.
We help the bank solve the problem of having too many properties in their inventory. A bank almost ALWAYS loses more money taking back properties than they do in agreeing to a short sale.
Yes, sometimes.
1. Refinance. Home owners can refinance to change the structure of their loan and adjust the amount owed.
2. Work out plan. If you’ve gotten behind on payments the bank may change the payment terms to get you caught up. Sometimes the amount owed can be added to the end of the mortgage for a fee. This can help you keep your home.
3. Loan Modification. Sometimes the bank will modify the terms of a loan so you can keep your home.
4. Bankruptcy. This can delay a foreclosure, but it does not prevent foreclosure.
5. Foreclosure. This is very undesirable. Always do a short sale to avoid foreclosure if you can.
The buyer that you are
searching for is the same buyer I’m searching for.
The main difference is that
while we are looking for the buyer, we are negotiating with the bank to get the
property ready for that buyer to move into their new home more conveniently and
quickly.
Many buyers are not willing
to wait three (3) to nine (9) months to negotiate the short sale and find out
if their offer is acceptable to the bank. My offer is presented quickly
and my negotiations begin right away. This helps the bank get the
property sold more quickly. It helps the homeowner avoid a pending foreclosure.
It helps the Realtor[s] get more houses sold. It helps the buyer get a
new home more quickly, conveniently and satisfactorily because they don’t have
to wait around for the bank to consider their offer. They are less likely
to grow impatient with a potential deal. They can buy the house like a
conventional sale.