Short sales - what are they and should I stay away? (second mortgage, credit) - Phoenix area - Arizona (AZ) - Page 3 - City-Data Forum

crystalys · 10-09-2010, 12:45 AM

Quote:

Originally Posted by azjack

I understand if you do not want to get into specifics, but if you're ok with it, I am genuinely curious as to what it took to make your short sale happen. How much below your loan balances was the sale price? How much cash did you have to put in? And it seems that they dropped the promissory note requirement, correct?

Also, I wonder what the highest successful loan forgiveness amount has been in the Phoenix area. Because if someone told me that he was $100,000 or more underwater, I would think that there is no chance of that being forgiven (or 90% forgiven, for example), and that they would be better off letting the Trustee Sale happen. But if any agents or actual participants have had that happen without a huge promissory note, etc., I would like to know.

So far the highest I have seen as the listing agent for a short sale I completed in January of this year was about 200K difference between the offer price and the balance of the loan. The clients loan balance was just over 400K and the accepted offer was 210K. Keep in mind though that the bank actually netted less than that after assisting with closing costs, the agents' commissions and a couple of miscellaneous liens on the property. So you could say that the forgiven part was more like 230K.

khuntrevor · 10-09-2010, 12:53 AM

Quote:

Originally Posted by crystalys

What are the smoke and mirrors? You get an offer for less than you owe on the house. The seller and buyer sign a contract. The agent submits the contract to the seller's bank. The seller has already sent in their "hardship" packet and in 30 to 180 days (depending on the original loan situation and who the investor is) the bank says "yes" or "no' or "maybe with further contingencies". Pretty plain and simple don't you think? Now wonder you think you don't need a realtor that does short sales.

Half never actually close. I've bought 8 homes over the years and none took more than 35 days. This included 1 probate, 1 HUD, and two foreclosures. Time is money...If you need a home 180 days is a long time to wait for something that may not solidify.

crystalys · 10-12-2010, 04:20 PM

Quote:

Originally Posted by khuntrevor

Half never actually close. I've bought 8 homes over the years and none took more than 35 days. This included 1 probate, 1 HUD, and two foreclosures. Time is money...If you need a home 180 days is a long time to wait for something that may not solidify.

I actually meant this as more "tongue in cheek" and I think you missed the point that short sale transactions can be very tricky and you need someone who has the education and experience to help you through them.

crystalys · 10-12-2010, 04:21 PM

Quote:

Originally Posted by khuntrevor

Half never actually close. I've bought 8 homes over the years and none took more than 35 days. This included 1 probate, 1 HUD, and two foreclosures. Time is money...If you need a home 180 days is a long time to wait for something that may not solidify.

So according to this post it sounds like you are saying you won't purchase a short sale. Which is different from your previous post where you said:

"I won't even work with a realtor that does short sales. It's just that much smoke and mirrors."

Which of course almost all realtors "do" short sales if it means making some kind of commission considering the current market.

So to those interested in purchasing a short sale and who don't mind waiting and taking a gamble then the realtors who do short sales could be of some use.

AZJoeD · 10-12-2010, 05:59 PM

There is no correct answer to this question, only opinions.

Yes it is true that most shorts sales take a long time. it is also true that many do not close. But all short sales are not created equal. Some are pre-approved, many are priced appropriately for the market and many sellers can work out a deal with their bank. You just have to find the ones that are good short sale candidates and reject the ones that are not. Just because it is "Active" in the MLS does not make it a good candidate.

Once again a good agent will be able to advise you. Or you can just find any agent that will tell you what you want to hear and it will likely fall out. Then you will be frustrated, angry and wind up back here complaining.

khuntrevor · 10-12-2010, 11:46 PM

Quote:

Originally Posted by crystalys

So according to this post it sounds like you are saying you won't purchase a short sale. Which is different from your previous post where you said:

"I won't even work with a realtor that does short sales. It's just that much smoke and mirrors."

Which of course almost all realtors "do" short sales if it means making some kind of commission considering the current market.

So to those interested in purchasing a short sale and who don't mind waiting and taking a gamble then the realtors who do short sales could be of some use.

Obviously, if I will not work with a realtor involved with them, I will not be buying one, either. The window is just way to big for the prequalification, appraisal, etc...I don't like working with people, who are distracted by nonsense.

gtbguy · 10-18-2010, 09:19 PM

Quote:

Originally Posted by AZJoeD

There is no correct answer to this question, only opinions.

Yes it is true that most shorts sales take a long time. it is also true that many do not close. But all short sales are not created equal. Some are pre-approved, many are priced appropriately for the market and many sellers can work out a deal with their bank. You just have to find the ones that are good short sale candidates and reject the ones that are not. Just because it is "Active" in the MLS does not make it a good candidate.

Once again a good agent will be able to advise you. Or you can just find any agent that will tell you what you want to hear and it will likely fall out. Then you will be frustrated, angry and wind up back here complaining.

Good advice!

EnicAZ · 10-18-2010, 09:52 PM

Moderator cut: not allowed Values have fallen more than 9.2% in the last two months alone according to my sales' office MLS statistics.

Short sales have a lot of title issues, which just got a lot more complicated with foreclosure gate. Some title insurance companies are refusing to insurance some titles.

Moderator cut: not allowed .

rjrcm · 10-18-2010, 11:46 PM

Quote:

Originally Posted by EnicAZ

...
Short sales have a lot of title issues, which just got a lot more complicated with foreclosure gate. Some title insurance companies are refusing to insurance some titles. ...

And why do short sales have "a lot of title issues" any more than any other regular sale?

Foreclosure gate is a separate issue from short sales, that may or may not actually be in the process of foreclosure. If anything, it may prompt banks to be more accepting of short sales to avoid the foreclosure issues hitting them.

HX_Guy · 10-19-2010, 12:27 AM

Can you guys expand a little more on the process of a short sale (as the seller)? What is this promissory note you guys are talking about?

We currently turned in a short sale package with our lender and are not really sure what to expect. The original loan amount is for $280,000. The lender had a BPO done that came back at $165,000 and that is what the offer from the buyer is for. The lender (well, one of their customer service people) said that the offer is good and that a negotiator has been assigned and it should take about 60 days for a decision.

Again though my main concern is this promissory note and such. I mean if you short sale and the lender accepts, doesn't that mean you are not responsible for the loan any longer?