Selling Your Home…
Here is the process I will use:
1. I will analyze similar sold properties to determine the price range of recent sales. This information will be lender’s appraiser to determine value for loan purposes.
2. I will review currently available similar properties. This is the buyer’s primary comparison of value when deciding which property to purchase. I will tour each of the similar available properties prior to placing your home on the market, in order to develop an understanding of the relative strengths and weaknesses of your home compared to its competition.
3. I will become familiar with your home. Before you establish the listing price for your home, I will become familiar with its features, benefits, strengths, and weaknesses so I can properly counsel you as to the position of your home against the competition.
4. I will counsel you as to the steps you can take to make the property look its best to potential buyers.
5. I will provide you the market information in order for you to establish the asking price for your home. I will counsel you as to the factors that weigh on this decision- financial considerations such as having purchased another home, the need to sell quickly because of relocation, the general direction and strength of the market, etc.
6. I will expose the property to the brokerage community, including placement in the MLS service and ancillary sources (Realtor.com, Colorado R.E.). These are the recognized sources used by brokers in Colorado. Of course, sign placement and an informational brochure are a part of this process. Cooperation among listing and selling brokers is key since the vast majority of sales involve two brokers from different firms. In truth, the available marketing tools do not vary much from one brokerage to the next. All Realtors use the same MLS service and other internet sources, newspapers, yard signage and brochures. In 25 years I have found the vast majority of brokers do a good job of “servicing their listings”.
7. I will canvass the neighborhood to distribute brochures of the property to neighbors. In addition to satisfying their curiosity, this is sometimes a source of potential buyers (friends, relatives of neighbors).
8. I will follow up with other brokers. I will contact brokers who show your home to learn their and their buyers’ impressions of the property. The buyer brokers are the best source from which to obtain honest and direct comment about your home.
9. I will place Newspaper ads to increase the overall level of exposure to the market.
10. I will run Open Houses on weekends, as appropriate, in conjunction with Newspaper ads. This increases the level of convenience for potential buyers and the brokerage community.
11. I will provide clear and regular communication to you so that you are informed as to showing activity and comments solicited from brokers who show the property. I provide regular updates each week by telephone and email of showing activity and comments.
12. Relationship. The most important factor in choosing a broker is the level of trust that exists between the parties.
13. I will pray regularly for the Lord’s leading in the sale of your home.
What are “Short Sales”?
The term “short sale” derives from circumstances where the loan balance is greater than the value of the property and the borrower is unable to:
A) comply with required payment terms
B) refinance the property or
C) payoff the loan from other assets and the proceeds from the sale of the property are insufficient to pay off the outstanding loan balance.
Hence, the payoff amount is “short”. The following is a brief summary of the main sequence of events in completing a successful “short sale”. This summary is not intended to cover every nuance of the process nor does it take into account every possible variable. The actual sequence and steps are dependent on the specific lender, the borrower and his circumstances and prevailing market conditions. Also, this is not legal advice nor should it be construed as such. I am a real estate broker and not a real estate attorney. I strongly urge anyone in a potential loan default situation to consult a competent real estate attorney for guidance.
1- Assuming you are unable to make required payments or refinance the property you would advise the lender that you are placing the property on the market and that you expect that the proceeds will be insufficient to retire the mortgage and that you will be seeking their approval for a “short sale” based on the expected sales price. They know this term and will refer your file to their “loss mitigation” department. The lender will likely ask for some information from you (letter of explanation, authorization to release info to 3rd parties, certified copy of death certificate and proof of authority for personal representatives in the event the property is part of the estate of a deceased person, etc.) I will coordinate the gathering of this information on your behalf and submit it to the lender. Sometime during the process the lender will use his contacts to determine an estimated value of the property. Typically, they would employ the services of a 3rd party broker to provide a “Broker’s Price Opinion (BPO). Following that, the lender will advise us to advise when we receive an offer which is acceptable to the seller.
2- We put the property on the market and, upon receiving an acceptable offer from a buyer, you would accept the offer “subject to the approval of the lender.”
3- I submit the accepted offer to the lender along with an estimate of proceeds. The estimate of proceeds is usually prepared by the title company.
4- The lender reviews the information and either gives their approval or not. It is my experience that reasonable offers (offers with a sales price close to the lender’s estimation of value) are given approval to close. Practically speaking, the lender reviews the estimate of proceeds and issues an approval of short sale containing various conditions (closing date, minimum acceptable proceeds, etc.) The transaction then proceeds through the contract process (inspection, appraisal for the buyer’s lender, etc.) and finally to closing. The lender is motivated to accept a Short Sale since the alternative, generally, is to foreclose on the property. This would increase their expenses (lost payments, attorney fees, property maintenance costs once they own the property) pending the eventual sale at a price which is potentially lower than would be realized in a short sale.
5- By proceeding with a short sale the property owner may, there is no guarantee, realize less damage to their credit rating and for a shorter period of time than in the case of a foreclosure.
6- The elements of a successful short sale are A) a seller who is unable to comply with the loan terms or to refinance and who is willing to go through the short pay process B) a loan in default, C) an acceptable offer to purchase the property and D) a buyer willing to wait through the uncertainty of the short sale.
The short sale process varies depending on the actual lender, the borrower’s specific circumstances, etc.
Here is a list of some of the lenders I have worked with:
Bank of America
Chase Bank
Citibank
FHA
FNMA
Green Point
Hongkong and Shanghai Banking Corporation
USAA
US Bank
US Navy Federal Credit Union
Wells Fargo
Wilshire Capital
Select Portfolio Servicing
Green Tree Financial
