TO RENO-SPARKS HOME OWNERS: A QUICK LESSON ON SHORT SALES
What is a short sale? And why are they attracting such widespread interest?
*Note: this letter is for those who are already experiencing financial problems in their mortgage (or about to) and are running out of options. If you are NOT having any trouble with your payments and/or is fighting to keep your home, I just want to say you're admired and we consider you a community hero. You may disregard this letter.
"What is a short sale? And why are they attracting such widespread interest?"--these are two questions my clients and friends have been asking me these past twelve months.
Today I am delighted to talk to you about this sometimes confusing subject. I currently have twenty-four short sale listings and eight are in contract.
My goal in this letter is simple--for you to feel confident about your knowledge of short sales in case you'll need it in the future. Are you ready?? Let's start.
Frequently Asked Questions:
Q: What is a short sale?
A Short Sale occurs when a homeowner owes more on their property than the property is actually worth, but their bank agrees to accept less than what is owed as payment-in-full. In other words, the bank is willing to take a discounted pay-off in order to avoid the foreclosure process.
Q: Why are the banks willing to do a Short Sale?
Because the alternative is foreclosure, and the foreclosure process is usually more expensive compared to Short Sale.
Q: What are the benefits for the homeowner in a Short Sale?
The primary benefit to a homeowner who participates in a short sale is avoiding the devastating effects of a foreclosure on their credit. If the loan is VA guaranteed, the successful completion of the Short Sale protects their VA eligibility for future VA mortgage loans.
Q: What is the impact on the homeowner's credit for doing a Short Sale?
A Short Sale is reflected on the homeowner's credit report as something to the effect of, "Discounted Payoff, Paid-in-full". A Short Sale is less damaging to the homeowner's credit than a foreclosure or a deed-in-lieu of foreclosure.
Q: Is a short sale supposed to be a painless alternative to foreclosure for anyone involved?
No. There are no painless alternatives. But it greatly helps that there is a better option than foreclosing your home.
IMPORTANT THINGS TO KNOW: (some excerpts are from: Reno News & Review's "6 dirty little secrets you need to know about home foreclosure):
No. 1: Banks will not even talk to you until after you are late on payments. If a homeowner has not yet defaulted on their loan, the bank has little motivation to approve the short sale.
No. 2: A foreclosure incurs permanent debt. Whereas, your mortgage was secured debt. Personal debt is attached to your Social Security number. One of the biggest mistakes a homeowner in trouble can make is to panic and think they will be evicted tomorrow--then use their credit cards to make their mortgage payments. It is a short term fix that quickly turns into a nightmare. Credit card debt is personal debt.
No. 3: A short sale could be your only way out. Because of the Mortgage Forgiveness Debt Relief Act of December 2007, homeowners can walk away from substantial debt.
No. 4: Homeowners must prove that they do not have the money to make up the shortfall. This means sending in copies of all bank statements, tax returns, w-2s, and other supporting documents to verify that the homeowners is financially insolvent.
No. 5: Hire an agent who really knows what he/she is doing. Short sales are such a specialized branch of practice that most agents without this specific training and experience fail in their attempts at short sales. If the short-sale package is not submitted with the right information on the right forms and in the right order, it goes into the tall stack of 100-plus files that are never going to get looked at or touched.
*Short sales, contrary to what you may have heard, is not a walk in the park. But it's really worth it.
Here's a testimonial from someone who has gone through a successful short sale transaction.
TESTIMONIAL: from previous owner of 1608 Sewell Dr. Reno,NV 89521
"I was laid off from the state in November of 2007 due to major budget cuts. We were no longer able to make our house payments as the job market was just beginning to get worse and worse. We did all we could to get employed but were not able to. We had had excellent credit and did not want to foreclose.
We were in our home in San Jose for 23 years and always paid on time. My agent in San Jose found Joe Salcedo in Reno for me and told me he has a lot of experience in short sales. He priced our home at a very realistic price in relation to the market values at the time. Joe was very professional and before we knew it we had an offer on our home.
My husband was fortunate enough to get his job back in Mountain View and we happily have moved back to the bay area (our home). I recommended Joe to my daughter for her short sale--her house is already in contract! We will be forever grateful for the assistance of Joe Salcedo. "
Sincerely,
James and Marsha McGinnis --Please feel free to call me for a reference at 775-303-8469
P.S...
Statistics tell us that April,May,June & July are the best time to sell your home because of the seasonal increase from buyers. If you, a relative or a friend want to undergo a short sale, I would love to be of help in any way I can:
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Thinking of doing a short sale? Call Joe today! 775-338-7653. Joe currently has twenty-four short sale listings (eleven are in contract).
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Joe Salcedo Of Chase International Real Estate
Email: jsalcedo@chaseinternational.com
Direct: 775-338-7653
Office: 775-850-5900
Blog/Website: http://RenoHomeBlog.com
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