Why Are Short Sales Such A Long Procedure in Sacramento County?

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Sacramento County Short Sale RealtorSacramento Short Sales are one of the alternatives to avoid a foreclosure that a home owner can select. They do have their pros and cons, but some experts tend to believe the benefits of a short sale override the cons especially if the homeowner sees no change in his/her finances. But whether it’s advantageous for both lender and borrower, a Sacramento Short Sale still is a process that takes a long time to complete and often undergoes various steps with each step mandatory for an approval.

So, why does a Sacramento Short Sale take such a long time to accomplish? A short sale, typically involves the homeowner asking the lender to obtain a lesser amount than what is owed to him. If you were in the lender’s position, you’d naturally think the choice over a hundred times before agreeing to a loss. Mulling this loss over naturally involves time; weeks or even months. Short sales take an average of 245 days to push through.

Likewise, for the lender to consent, the homeowner must give valid evidence that a short sale is necessary. A foreclosure that appears is substantial evidence since lenders themselves do not want to go through with the expensive process of foreclosing. This and the fact that the property will go to the bad debts section and probably incur taxes while under such classification. It also takes time and money to resell a foreclosed property. In a short sale, a willing buyer is usually already waiting.

So, does being successful in a short sale all rely on the lender? Here are a few more answers to the question – Why do short sales take so long to complete?

Homeowner Must Package Correct Paperwork

In addition to an appearing foreclosure, a homeowner should provide the right paperwork to get approved for a short sale. For one reason being, the lender will require proof that the home’s market value is less than the remaining amount of the mortgage. This proof should be proposed in an appraisal report from an independent and reputable appraiser. Other requirements that a lender may find necessary include the short sale hardship letter explaining the homeowner’s aggrieved situation, pay stubs, tax returns, and bank statements. If a homeowner qualifies for the government-backed short sale program under Realtor, the requirements would include applying for the HAMP loan modification program first, evidence that monthly payments exceed 31% of income and the hardship letter.

So if you are a homeowner wanting to sell your home through a short sale, you should make sure you have submitted the right paperwork prior questioning why short sales take so long to complete. Because by the time your paperwork has been reviewed and rejected due to a missing requirement, weeks or months would have already passed. In this bad economic time that the real estate is in, mortgage lenders are processing hundreds of short sale applications on any single time.

Second or Third Mortgages

Sacramento County Short Sale RealtorAnother thing a homeowner should take into consideration before asking as to why short sales take so long to complete is a second or third mortgage. Having more than one mortgage for a home isn’t unusual. When a homeowner falls short of the required down payment, he/she might be forced to get a second mortgage to cover the difference. A second mortgage could have also been taken to cover the difference between a low appraisal/the amount the bank was willing to lend, and the higher asking price of the seller.

Whether of a second or third mortgage, a homeowner looking out for a short sale as an alternative to refrain from foreclosure should also get the second or third lender’s approval. This process takes time because a lender will usually not agree to let go of his lien over the property without anything in exchange or valid proof that a short sale is the only option available.

Mortgage Insurance

The holder of the mortgage insurance or MI is another one of the third parties involved in short sale. Most mortgages are covered with a mortgage insurance that guards the lender in case the borrower defaults on the payments. In the matter of a short sale, the borrower would have defaulted on the payments so the insurance provider’s approval is needed since an amount will typically be paid to the lender to cover the default. Additionally, this process involves paperwork and a step-by-step approval process.

Inexperienced Realtor

Sacramento County Short Sale RealtorWhile the processes of selling a home under a short sale seem somewhat similar to a regular sale, it would be great for a homeowner to seek after the assistance of a Realtor or real estate agent experienced in short sales. Since a lender requires that a home being listed for a short sale should already have a willing buyer, a competent real estate agent is needed to help both buyer and homeowner go through the long months of waiting for the short sale to be approved. But before this, there are steps that a homeowner cannot handle himself. This will involve getting a reputable appraiser, listing the home for short sale and many more. In total, a homeowner should not just seek after for a licensed real estate agent, but one who specialize in short sales.

Even though a short sale can be one of the best alternatives a homeowner can consider to avoiding foreclosure, it still takes a long time to complete. The sequence of events above are just a few of the reasons why short sales take so long to complete, and understanding each can help a homeowner prepare for the long waiting period; if not achieve a faster approval.

 

The Data On Short Sales in Sacramento, Caliifornia

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Sacramento County Short Sale RealtorOften when lenders do not move your Sacramento Short Sale along in an imperative manner, you become discouraged and the anxiety from the run around or the lack of communication starts to take its toll on you. However, Wells Fargo Short Sales have been voted as the fastest and highest rated approval sales specialists because of their well-organized professionalism and their constant interaction. It’s no wonder why Wells Fargo comes highly recommended.

With the economy the way it is and financial hardships becoming a huge reason for the incredible amount of debt that seems to haunt most homeowners these days, a short sale has been the common way to get out of a home which has already been in distress because mortgage payments just were not able to be met over time. A short sale process is first started after a homeowner has been qualified and met all criteria that are expected. When a short sale is taking place it simply means a lender has agreed to sell the home under the Real Estate markets value due to the home no longer being worth what it once was because of the amount of liability that is owed. Short sales have become an ideal way for homeowners who can no longer keep their financial obligation to the lender so that they can escape a foreclosure on their credit, which may keep them from owning a new home for seven years. You must meet the Wells Fargo Short Sale Requirements in order to qualify.

When a short sale has been brought to the attention of a lender they are going to want to know everything: So tell them! They want to make sure that you are legit in your hardship and this is not an escape from a precious commitment. Lenders are aware that times are tough and they do not seem to be getting easier, but it still doesn’t count as individual proof of not being able to afford housing.

When qualifying for a Wells Fargo Short Sale the hardships will most likely need to relate with the following: A radical reduction in income because of disability, the loss of a job, a divorce and the overheads that will arise from it and/or one of the two refuses to continue to partake in their portion of the bills, death of a family member who was a backer in any housing expenses, and natural disasters such as Tornados, Hurricanes or earthquakes.

When the time has come for an agent to speak with your lender about your particular hardship, they will require that you type up a hardship document justifying your reasons for not being able to maintain the payments on your home. Remember, there is no need to hold back on your hardship and any other reasoning for your financial complications, as this can only benefit you more. Along with your typed hardship letter you will need: One month of bank statements showing how much money has been acquired. A month of old pay stub(s), along with Tax Returns and W-2 from the previous year. Lastly you will need a financial statement which will present your expenses, savings and gross to demonstrate you are not competent enough to pay anymore on your home. Do not forget to apply your loan number to every piece of document.

There is a program called HAFA, which is a short term for Home Affordable Alternative Program. The program can offer $ 3000.00 towards your relocation.

Sacramento County Short Sale RealtorKeeping mall documents intact is a very crucial part of the process, losing just one piece could slow the process down dramatically. A short summary for the Wells Fargo short sale Package Requirements are as follows:

●Hardship letter
●Last three months of Bank statements
●One full month of pay stub(s)
●The previous year’s tax return with W-2’s
●A Financial statement

 

Recovering From a Short Sale in Sacramento

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Sacramento County Short Sale RealtorIt is understandable that many homeowners may not feel positive about recovering from a Sacramento Short Sale. This is primarily based on the combination of depression and frustration that they are currently feeling. After all, they did just lose a home and with not very clear prospects on how the future will look for them. At this point, homeowners need to keep a positive perspective in order to allow themselves to see clearly what is in store upon the road that can help them get back on their feet.

For the most part, homeowners will not find it challenging to face the short sale as long as they know how to go about getting on the road to recovery. There are multiple adjustments that have to be done and goals should be set to ensure that the type of financial condition they are currently having will never be repeated. Considering the huge number of homeowners facing financial distress, concerns on how to recover from a short sale should be given ample focus.

1. How quickly are you capable of becoming a homeowner again?
Generally speaking, homeowners that are dealing with past credit issues because of financial constraints should be able to own a new home in about three years on the average. This would of course vary depending on the type of loan they want to avail as well as the lender they are considering. It is important to note that every lender has its own underwriting guidelines on how and when to accept. For government insured loans, 620 FICO is usually the starting point.

When recovering from a Sacramento Short Sale, the clock does not actually start ticking from the time it is transferred to a new owner. For some homeowners who have miraculously kept up with payments, despite being in an upside-down condition, theoretically, they can apply for a new mortgage immediately after the short sale transaction has been concluded. A lot of these by part would be theoretical because it is hard to assume how underwriters will evaluate the individual conditions of the homeowner including their risk factors.

It is also critical to keep in mind the mood of the lender bank when contemplating how soon you can get a new home for your family. Basically, the three year timeframe is a good measuring stick. For more conservative banks, it could go up as high as seven years.

2. What are the credit effects of short sales?
Waiting never endingly for a listed property to be sold in such a volatile market can be nerve wrecking for any homeowner. When considering the credit implications of short sale, it is vital to note that 120 days of non-payment when in short sale mode will have an impact on your FICO score equivalent to a foreclosure. With this in mind, you need to consider that short sale transactions on the average take anywhere from 6 to 13 months.

This means that the longer the short sale transaction takes to close, the worse your credit score becomes. This is an important thing to consider when contemplating on recovering from a short sale. More recent negative impacts on your credit score have more substantial effects compared to older ones. In essence, your credit score will only start the recovery process once the late payments stop and the property is sold.

Sacramento County Short Sale RealtorThe part of the experienced short sale specialist becomes vital at this point because of the negotiation for the short fall owed to the bank. Some banks may require promissory notes or seller participation. In case debt balance is forgiven, you must be aware that the IRS considers this as an income, which means that it is taxable. You need an experienced real estate agent to give you the best advice to be able to recover faster.

3. How to face the Fannie Mae guidelines?
In a short sale transaction, Fannie Mae normally grants for the funding of a home purchase within three years. This is of course constructed on a couple of hardship factors. In case you filed for bankruptcy, the waiting time may be extended by at least a year or probably more. At the same time, you should expect to obtain higher interest rates and a more stringent evaluation of your loan application.

When you are considering to recover from a short sale, you must be aware that securing a conventional loan may be challenging. This waiting time is coincidental to that of a deed-in-lieu with the main difference being that with short sale transactions, you keep the holder of the title until a new buyer comes along. As a result, the moment you hand over the keys to the new owner, you are on your way to recovery.

4. What are the effects of FHA, VA, and USDA guidelines?
With government lenders, recovering from a short sale can normally takes a shorter time with the homeowner having the possibility of purchasing a new home within 2 to 3 years. This obviously is provided that there is a solid credit recovery story to back it up. In some cases the waiting period can even be shortened based on some exceptions like disability for example.

Sacramento County Short Sale RealtorWhen it comes to dealing with individual banks, each have their own principles by which they can accept the terms of credit score, which inevitably affects the recovery time of the homeowner. Essentially, two years becomes a doable time to be in recovery provided that the factors go in your favor. Some homeowners that benefit from shortened recovery periods may be offered Lease to Purchase Option.

The possibility is based on the practice of some private sellers who are less worried of the credit standing of the homeowner, but want to generate income from the lease until such time that the property can be fully purchased. This recovery strategy is capable working both ways, which is why it is important to consult with a lawyer before signing any contract.

Starting to rebuild your credit as well as attempting to own a new home can be as easy or as difficult as you make it. Basically, the road to recovery begins with a strategy that you must follow from day one until you have made it back on your feet. These questions can serve as your guide to recovering from a Sacramento Short Sale.

 

Qualifications for a Short Sale in Sacramento

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Sacramento Short Sale RealtorMultiple homeowners facing a foreclosure still do not know what the qualifications for a Sacramento Short Sale. A number of these homeowners believe the process is too troublesome, time consuming and much more, that they are not qualified. Conflicting to these however, the requirements or qualifications are easy to meet and are generally the situations that put homeowners near a foreclosure in the first place. While this is designed to be a general guide to the requirements for most financial institutions, and it is important to note that requirements have become more flexible in recent times.

Please tell me what a Sacramento Short Sale is?

Before seeking after the qualifications for a short sale, a homeowner should first comprehend what a short sale is. A short sale is essentially one of the alternatives available for homeowners wanting to refrain from a foreclosure. The complexity of the whole process lies on the ‘short’ of the sale that will be demanded on the property. Simply put, you will be selling your home for less than the mortgage amount in this strategy to avoid a foreclosure. But in order to sell your home ‘short’ of its mortgage, you should have good reasons to; you should be qualified. And these qualifications are usually set by lenders.

What are the Qualifications for a Sacramento Short Sale from a private lender?

Your modern lender has the final say in granting you a short sale. For you to be eligible for the program if your mortgage is under a private lender, here are the conditions that should be met. Lowered home value is one of the major reasons a homeowner can use to make the lender agree to a short sale is a decrease in home value. Especially if the decreased home value should be lower than the mortgage. Because no lender would naturally agree to a short sale if the home can be sold more than the amount of the mortgage; home values are the determinants of price that prospect buyers will be willing to pay. Therefore, a homeowner should ask a real estate professional for a quote or comparative market analysis. If the result of the analysis is a home value larger than the mortgage, then the short sale is not necessary.

A desperate circumstance of the homeowner is another good reason for a lender to approve a short sale is a destitute circumstance or hardship that restrains the homeowner to meet monthly payments. This circumstance should be defined in a letter called the Letter of Hardship. A few of the acceptable hardship conditions include death of the homeowner or family member, sickness of the homeowner or relative, bankruptcy, divorce, loss of a job and decrease of income. Not being content with neighbors or having made a bad purchase decision with the said property does not constitute a hardship.

No other assets to pay off the mortgage- The homeowner will also be asked to submit proof that he or she has no other assets that can be used to pay for the payments in default and future payments. A statement of assets and liabilities supported by pay slips, income tax returns, non-cash investments and bank statements are usually enough supplement to the claim of no asset availability. To qualify for a short sale, total liabilities should be more than the net assets. As a result, you should have a negative figure on the bottom of your statement of assets and liabilities. If not, a lender might point out other options in order for you to pay your mortgage.

What are the qualifications for a Sacramento Short Sale under HAFA?

Sacramento Short Sale RealtorA short sale could also be supported by a government program called Home Affordable Foreclosure Alternatives or HAFA. It is under the bigger program called Making Home Affordable Program initiated by President Obama. As opposed to short sale alternative from a private lender, HAFA offers several benefits such as lenders receiving 6% on the loan balance or a maximum of $ 6,000 and sellers or homeowners receiving a relocation assistance of up to $ 3,000 which will be put on escrow until the sale is closed.

So what are the qualifications for a Sacramento short sale under this program? They are:

●Homeowner should be in a hardship situation

●The unpaid mortgage amount should be no more than $ 729,750 for a single unit; other limits are set for other types of homes

●Mortgage was taken before January 1, 2009

●The homeowner should be in default or is about to be in default of several monthly payments

●Property should be personal residence; currently occupied by the homeowner

Apart from these requirements, a homeowner or seller must also be rejected by the Home Affordable Modification Program or HAMP which covers loan modifications. Therefore, a homeowner should have first applied for a loan modification under the HAMP. Requirements for HAMP are the same with HAFA but with the addition of: mortgage payments should not exceed 31% of homeowner’s monthly income.

Additionally, when applying for a short sale through HAFA, a homeowner needs to check if his or her mortgage lender participates in the program. Otherwise, a short sale under the private lender is the only option available. When faced with a foreclosure, a short sale is one of the best options that a homeowner should look into. It might be a lengthy process but it can be possible with the right assistance from a real estate professional and knowledge of the whole process. However, seeking this option starts with knowing the qualifications for a short sale. Contacting a Short Sale Realtor will better help you understand the qualifications of a short sale and how a Specialist can make the short sale process an easy transition.

 

Sacramento Qualifications for a Short Sale

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Sacramento County Short Sale RealtorMany homeowners dealing with a foreclosure still are not educated on what the qualifications for a Sacramento Short Sale. A number of these homeowners think the process is too challenging, time consuming and much more, that they are not qualified. Contrary to these however, the requirements or qualifications are easy to meet and are generally the situations that put homeowners near a foreclosure in the first place. While this is meant to be a general guide to the requirements for most financial institutions, and it is important to note that requirements have become more flexible in recent times.

Define a Sacramento Short Sale Please?

Before searching after what the qualifications for a short sale, a homeowner first should understand what a short sale is. A short sale is essentially one of the options available for homeowners wanting to avoid a foreclosure. The dynamics of the whole process lies on the ‘short’ of the sale that will be enforced on the property. Simply put, you’ll be selling your home for less than the mortgage amount in this strategy to avoid a foreclosure. But in order to sell your home ‘short’ of its mortgage, you should have good reasons to; you should be qualified. And these qualifications are usually set by lenders.

What are the qualifications for a Sacramento Short Sale from a private lender?

Your current lender has the final decision in granting you a short sale. For you to be qualified for the program if your mortgage is under a private lender, here are the circumstances that must be met. Decreased home value is one of the strongest reasons a homeowner can use to make the lender agree to a short sale is a decrease in home value. Specifically, the decreased home value should be lower than the mortgage. Due to the fact that no lender would naturally agree to a short sale if the home can be sold more than the amount of the mortgage; home values are the determinants of price that prospect buyers will be willing to pay. Therefore, a homeowner should ask a real estate professional for a quote or comparative market analysis. If the outcome of the analysis is a home value larger than the mortgage, then the short sale is not necessary.

Sacramento County Short Sale RealtorAn extreme condition of the homeowner is another great reason for a lender to approve a short sale is a destitute circumstance or hardship that restrains the homeowner to meet monthly payments. This condition must be explained in a letter known as the Letter of Hardship. A few of the satisfactory hardship conditions include death of the homeowner or family member, illness of the homeowner or family member, bankruptcy, divorce, unemployment and decrease of income. Being miserable with neighbors or having made a bad purchase decision with the said property does not constitute a hardship.

No other assets to pay off the mortgage- It will be required of the homeowner to submit evidence that he or she has no other assets that can be used to pay for the payments in default and future payments. A statement of assets and liabilities supported by pay slips, income tax returns, non-cash investments and bank statements are typically enough supplement to the claim of no asset availability. To qualify for a short sale, total liabilities should be more than the net assets. Therefore, you should have a negative figure on the bottom of your statement of assets and liabilities. If not, a lender might point out other options in order for you to pay your mortgage.

What are the qualifications for a short sale under HAFA?

A short sale may likewise be backed by a government program called Home Affordable Foreclosure Alternatives or HAFA. It is under the bigger program called Making Home Affordable Program initiated by President Obama. As opposed to short sale alternative from a private lender, HAFA offers several benefits such as lenders receiving 6% on the loan balance or a maximum of $ 6,000 and sellers or homeowners receiving a relocation assistance of up to $ 3,000 which will be put on escrow until the sale is closed.

So what are the qualifications for a short sale under this program? They are:

●Property should be personal residence; currently occupied by the homeowner

●The unpaid mortgage amount should be no more than $ 729,750 for a single unit; other limits are set for other types of homes

●The homeowner must be in default or is about to be in default of several monthly payments

●Mortgage was taken before January 1, 2009

●Homeowner need to be in a hardship situation

Sacramento County Short Sale RealtorApart from these requirements, a homeowner or seller must also be denied by the Home Affordable Modification Program or HAMP which covers loan modifications. Therefore, a homeowner should have first applied for a loan modification under the HAMP. Requirements for HAMP are the same with HAFA but with the addition of: mortgage payments should not exceed 31% of homeowner’s monthly income.

In addition, when applying for a short sale through HAFA, a homeowner has to check if his or her mortgage lender participates in the program. Otherwise, a short sale under the private lender is the only alternative available. When dealing with a foreclosure, a short sale is one of the best options that a homeowner should consider. It might be a lengthy process but it can be possible with the right assistance from a real estate professional and knowledge of the whole process. Nevertheless, seeking this option starts with being knowledgeable of the qualifications for a short sale. Contacting a Short Sale Realtor will better help you understand the qualifications of a short sale and how a Specialist can make the short sale process an easy transition.

 

Will I Be Relieved of My Debt Through a Short Sale in Sacramento?

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Sacramento County Short Sale RealtorIf you want to avoid foreclosure on your home, you should consider short selling your property. A Sacramento Short Sale refers to the procedure of a lender accepting a discount or a lowered price on a mortgage of a home.

For instance, if you are facing the chance of a foreclosure on your home, a lender will search for potential buyers that wanting to buy your property at a discounted rate. The rate that is discounted already has been considered as the full payment of your loan.

Why Lenders Accept a Sacramento Short Sale on a Property

You might be wondering why in the world a lender wants to accept a short sale on a home. Many reasons as to why they do this are so. One of the major reasons behind this is that financial institutions such as banks prefer to maintain their records straight and pure. Most banks likewise, do not want excess inventory on their books. So in the event that they are offered a chance to sell properties that will not end in major losses, they welcome a short sale transaction.

Another reason as to why lenders are willing to accept a discounted rate on a mortgage is that a short sale offers them a higher income as opposed to property being auctioned off. There are numerous fees affiliated with a property that goes to an auction. So rather than lose more money on an auctioned property, they are willing to accept a lower price beforehand.

Short Sale Debt Forgiveness

If you are deciding to short sell your property, then you might face the problem of a possible foreclosure. You may also be concerned if your debt will be forgiven in a short sale. These are solid questions that you should ask yourself before you choose short selling your home. There are certain situations where you may be forgiven of your debt in short selling your property. What you should do is learn as much as you are able to about this subject in order for you to make the best choice.

Here are some of the most crucial questions that you should ask about short sale debt forgiveness:

When is a debt forgiven in a short sale?

Sacramento County Short Sale RealtorIf you are concerned about paying for higher fees and taxes while you short sale your home, you should understand that there are some exceptions that can be made to forgive any debts that you may have. Through these exemptions, you could abstain from having to pay a large amount to IRS even following short selling your property in most cases.

One situation where your debt may be resolved in the event of a short sale is when you are considered as insolvent before the debt is being discharged. The excluded amount from your income is usually the amount that covers the extent of your insolvency. Regardless, any amount that is more than the extent of your insolvency would be reported and tax will already be included.

Another scenario where your debt may also be wiped away is if you have gone bankrupt. This sort of exemption from income unlimited, as you can exclude any amount of debt discharged if you filed for bankruptcy. While the court will offer you a discharge on any of your debts, you will be managed by the bankruptcy court.

What is the Mortgage Forgiveness Debt Relief Act?

The Mortgage Forgiveness Debt Relief Act of 2007 is a provision that allows you to exclude income from the discharge of your debt on your principal residence. You can qualify for this relief if your debt is lowered through a restructuring of your mortgage or if your mortgage debt is forgiven because of the possibility of foreclosure. It is vital that you understand this option that you have if you are considering going for a short sale.

The Mortgage Forgiveness Debt Relief Act of 2007 applies to debts that are forgiven in 2007 up to 2012. This exclusion may reach up to $ 2 million worth of debt forgiven, or $ 1 million if married filing is done separately. Although, this provision does not apply if the debt discharged is because of any services given to the lender. This provision also doesn’t apply to any reason that is not related to the decline in the property’s value or the owner’s financial status.

If my debt is forgiven in a short sale, is it taxed?

Sacramento County Short Sale RealtorThere are some cases that a short sale is non-taxable, but there are also certain situations where the IRS won’t consider it as taxable. When you consider short selling your property, you can take advantage of this IRS tax law that is will expire in the year 2012. While this does not have any bearing on most financial institutions, this could mean a significant amount of savings on your part.

Although, while you may depend on the Mortgage Forgiveness Debt Relief Act, you should also bear in mind the IRS may consider the forgiveness of your debt as income. Since they look at your debt forgiveness as income, this means that it is taxable. Apart from this, there are also some lenders who may accept a short sale that will pursue you for the difference between the amount that you owe and the amount that you paid. The best thing that you can do in this situation is to consult with a lawyer in order to determine whether your debt is considered non-taxable or not.

However, it is always encouraged that you contact a Sacramento Short Sale Specialist Realtor to handle your short sale for you. Although some Realtors claim to know all there is about short sales; one short sale hardly classifies as experienced. You need agents who are thoroughly experienced and have developed the perfect knowledge and skill to take on a short sale. Our Short Sale Specialists are those types of agents. After all, it’s what they specialize in! Contact us and let us make sure your short sale goes smooth and steady!

Why is a Broker Price Opinion needed in a Sacramento Short Sale?

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Sacramento County Short Sale RealtorThe Broker’s Price Opinion is an extremely critical aspect to a Sacramento Short Sale because it will assist them in ensuring that both the lender and the seller will be delighted with the proceeds once the short sale has concluded. What is a BPO? A BPO is a general estimate of the home which will be determined by a qualified real estate broker. The BPO is determined on the criteria of the home itself. However, some lenders may have their own guidelines in regards to the criteria of the home, which will allow the lender to increase or decrease the estimation.

During your short sale, a Sacramento Short Sale Specialist will be able to guide you through every obstacle that may come about and how to help you get through the short sale transition as soon as possible. Your short sale specialist will be have the ability to keep impeccable communication with you and all other parties involved in the short sale while making sure all of your short sale questions are answered throughout the process.

It is very important to maintain your home in the best condition possible while the short sale process is in action because of the traffic of potential buyers as well as the BPO taking into considerations the inside and outside of your property. Because homeowners may still be able to live in their home during the short sale process, it is important to keep up with the upkeep in order to insure a faster selling home.

A critical part of the BPO to remember is that properties in the surrounding area may also get taken into consideration when estimating the home. It is a possibility to get a home sold through a short sale in only a few months; however brokers will also take into consideration the time it may take to sell the property. Once it becomes somewhat clear that a short sale could be your solution, it is advisable to begin the short sale process as soon as you may realize you will not be able to afford your home; the BPO process may recognize how close or far your are from foreclosure.

Sacramento Short Sale VS Foreclosure – Which should I do?

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Sacramento County Short Sale RealtorGetting fired from your job usually means getting losing your main source of income, and one of the first things to be sidelined when this occurs are mortgage payments. Paying for a house to live in might appear to be a little costly especially if you can just opt to rent an apartment. While it is easier to just walk away from your monthly mortgage payments and let the bank take your home, you might want to contemplate a short sale. So, what is the difference in the benefits of a Sacramento Short Sale VS a foreclosure?

Benefits of a Foreclosure – the art of walking away

Foreclosure is the easy way out. Basically, foreclosure is simply walking away from your property until the bank decides to foreclose on it. This is a little known fact, but foreclosure could possibly be the worst thing that you can do. Think it over – after the bank forces you to turn over your property, they get to clean it up, put it on sale for a cheaper price and whoever gets the property will either: (a) renovate it and try to sell it at a very high premium; (b) sell it as is and the seller can still get a respectable profit out of it or; (c) whomever gets the property can just live in it, still getting the better end of the deal because of the bargain price that he or she bought it for.

Foreclosed properties can sell pretty quickly as compared to a short sale. While this sounds pretty good on paper, keep in mind that it is the bank that already owns the foreclosed property, they are the ones who profit the most from a fast transaction, so please, take this time to read further into avoiding or preventing foreclosure.

Also, while it may sound really easy to just walk away from your property and let the bank acquire it, you may want to consider the following repercussions:

• A foreclosure record can leave a lasting impression – records of a previously foreclosed property may show up on your personal credit for up to 7 years. That is a lot of time to consider especially if you want to apply for something that is bank or credit related in the next seven years. While most people will think that they wouldn’t mind this kind of record because they are not planning on doing anything bank related, consider this: any type of foreclosed property records can severely affect your job applications. Why? Some employers look into your credit background to see if you are responsible in your credit, and a foreclosure blemish may cause them to conclude that you are irresponsible if you have a foreclosure on your record.

• It shows up on your credit records – taking care of your credit rating and record should by far be more critical than anything else you should consider before taking the easy way out. It is noted that your credit rating can go to as low as 160 to 105 points depending on the manner of foreclosure or on your credit history. This is especially important to consider if you have an active business or you are looking into bank loans for business or other concerns. A foreclosure can sometimes be read as a severe negligence on the part of the person. It is crucial to note that banks do not consider any kind of personal issues that you are enduring at the time of foreclosure: it’s either you make your payments on time or you don’t.

• You get evicted immediately – unlike if you put your home up for a short sale; eviction usually is very quick if your property is being foreclosed on. Generally, a notice period of 30 days is given to the person with a foreclosed property, but any other extensions might not be considered by the lending institution.

• Waiting period before you can buy – records of foreclosure can affect even the period when you can purchase your next home. Typically, banks choose more responsible and trustworthy people without any form of negative records to approve a home loan application. The current waiting timeframe for anybody to be granted by a bank or an institution to mortgage a home again is usually 5 years. Also, do you think a bank will let you purchase a home if records show that you already failed in maintaining a previous mortgage?

• It affects your loan applications – similar to most of the reasons above: why would you think any bank will permit a loan to you if your records reveal that you had trouble paying for one before? Even if the intention might be very different from that of a home purchase, like a school loan, car loan or business loan, it is still the same thing.

Benefits of a Sacramento Short Sale – doing something about it

Sacramento County Short Sale RealtorA short sale home specialist defines a short-sale as the lesser of the two evils. If you are concerned on how to Short Sale a home, then the first thing you need to be aware of is it allows you a lot of options that foreclosure doesn’t give you, such as:

• A clean slate – while generally your personal credit and bank records are your own responsibility, a short sale does not impact your credit in the same way as a foreclosure. That means you can do a lot of things that you wouldn’t be capable of if you had a foreclosure showing up on your credit. Not only to mention a clean slate, but on top of this and upon a successful completion of your short sale you may qualify for the HAFA Program. A program that could offer up to $ 3,000.00 CASH BACK towards your relocation! A borrower can be eligible to purchase a property in only two years after a foreclosure.

• Control over the price – in opposition to foreclosures, short-sales allow you to control the price of the sale because you still altogether own your home as the bank has not seized ownership of it yet. Granted, short-sale prices are still a lot lower at market value than the property value, you’d much rather be selling at a loss than letting the bank do all the selling for you. Even though the bank must have the final say so in a short sale offer, prices typically are higher than foreclosed homes. This will do your neighbors a favor by helping to preserve community property values.

• Leave when you want to leave – opting a short sale lets you stay in your home longer, as the bank will give you notice when the short sale deal is approved for close. A short sale waiting period can last from up to 2 to 3 months.

So, which is the better option? A Sacramento Short Sale or a foreclosure?

Considering a short sale over foreclosure may be the best option by far. The mere fact that you have control over the price and the time when you can sell your home is a better alternative than being forced to give up your house and being ordered to leave the premises as soon as possible.

While it is ultimately up to the person to select either a short sale or a foreclosure, what is valuable is that options are weighed first and consider how it may affect your ability to buy a home in the future and affect your credit rating. Doing your research is a job well done. Now, your next step is to contact one of our extremely trained Short Sale Specialists, so they can get your short sale on the go and successfully completed!

Steps to Complete a Short Sale in Sacramento

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Steps to Complete the Sacramento Short Sale process.

For both buyers and sellers, the steps to a short sale may seem blurry and complicated. Buyers may get discouraged with the long short sale approval process, while sellers may find that their lack of knowledge surrounding real estate short sales stressful and concerning as they ponder the financial and legal consequences of the process.

Sacramento County Short Sale RealtorWhile the short sale process may be tricky and full of potential complications, for a realtor experienced and familiar with the short sale process it will be fairly routine. An experienced short sale specialist can guide you through a successful short sale and lend advice, guidance and support along the way.
Real Estate Short Sale Process – Step By Step
Below are some of the steps you will go through with your short sale specialist in order to ensure a successful short sale and a fresh start for you and your family. While the specifics and documentation required may vary a bit from lender-to-lender or state-to-state, the general short sale process will be the same.
1. Find a Qualified Real Estate Sacramento Short Sale Specialist
In the current market, there are many listing agents who – while they may be wonderful realtors – simply do not have the experience to successfully execute a short sale. There are a lot of bumps and hairpin turns on the path to a successful short sale, and a lot of things can go downhill in the process. You’ll want an experienced short sale realtor who can help you navigate this tricky road.
Be sure that when you’re looking for a short sale Realtor, you analyze their previous track record and experience with short sales. You’ll want an experienced short sale realtor that has successfully helped many homeowners through the short sale process, and who can achieve the same results for you.
2. Prepare a Short Sale Hardship Letter

Sacramento County Short Sale RealtorIn order to get your lender to release their lien on your home and permit a short sale, you’ll need to type up a hardship letter giving account as to why you require a short sale. The more sympathetic and burdensome your situation, the better your hardship letter will sound. Banks are also much more favorable towards homeowners who are in a financial bind because of external or personal circumstances such as unemployment, medical emergencies or illness, divorce, death, bankruptcy. Your short sale specialist may assist you with the specific content of your short sale hardship letter.

3. Prepare a Short Sale Package
There are three basic requirements that must be met for a bank or mortgage lender to grant a short sale: the seller must demonstrate hardship, the seller must prove that the fair market value of the home is less than that of the mortgage, and the seller must demonstrate that they are unable to meet their debt obligations. In order to prove the latter, the homeowner will need to prepare a short sale package for submission to their lender.
Each lender may have different submission requirements, but they are generally looking for proof that the homeowner is unable to honor their debt. It is important to seek the assistance of an experienced short sale realtor in preparing your short sale package, but the basic contents of your short sale package will likely consist of the following:
• Your hardship letter for a Sacramento Short Sale
• Letter of authorization – this document allows your lender to disclose information to and work with your short sale specialist, lawyers, or other 3rd parties involved in assisting you with your short sale. Your letter of authorization will include your loan reference number, your full name, the date, your agent/lawyer’s name as well as contact information.
• Completed financial statement
• 2 years of your annual tax return
• 2 years of your W-2s
• Your recent payroll stubs
• Recent bank statements
• List of recent comparable sales or comparative market analysis – In order to prove that your home will not sell for a sufficient amount to cover your mortgage, you will need to substantiate this fact with a comparative market analysis. Your real estate agent will prepare this for you.

4. Put Your Home on the Market

Sacramento County Short Sale RealtorYou’ll sign a listing agreement with your short sale realtor, though it will be subject to short sale approval from your lender. Your realtor will then put your home on the market and solicit buyer offers as they would with a regular listing.
5. Accept an Offer
You’ll accept an offer that is close to or at fair market value. The lender will not approve a short sale if the offer is significantly below market value.
6. Submit Buyer’s Preapproval Letter, Earnest Money Deposit, and Seller’s Short Sale Package to Lender for Short Sale Approval
Once you have accept the offer, your short sale realtor will submit the buyer’s preapproval letter, their earnest money check, as well as the short sale package you and your realtor have prepared to the lender. At this stage, most lenders have an internal process for managing short sale approvals, and a loss mitigator will be assigned to your file. It may take anywhere from a few weeks to many months for your short sale to be approved or rejected.
This is another part of the process where it’s important to have a short sale specialist working for you. An experienced short sale realtor who has experience in short sale negotiations is significantly more likely to get your short sale approved and obtain forgiveness for the deficiency. An experienced short sale negotiator is also more likely to obtain short sale approval faster by consistently following up with your lender and pushing the process forward.
7. Receive Short Sale Approval
If your short sale is approved, the bank will issue a short sale approval letter. By this point, you may have been waiting a few weeks, or perhaps even half a year for short sale approval. The length of the short sale approval process will depend primarily on the lender, though in some cases your short sale negotiator may delay or speed up the process.
8. Deal closes & Lender Releases Lien

Sacramento County Short Sale RealtorThe buyer will deliver the funds, the seller will deliver the deed, and the lender will release their lien on the property. Depending on the short sale agreement negotiated by your short sale negotiator/short sale realtor, you may now be free of your debt obligation. Alternatively, it is possible that you didn’t qualify for debt forgiveness and you will still be personally liable for the deficiency between the proceeds of sale and your initial debt.
While it is not always possible to obtain forgiveness of the deficiency in every short sale, this is yet another reason you’ll want to work with a short sale specialist rather than just any listing agent. A realtor with experience in short sale negotiations ensures that you have the best chance possible of obtaining full forgiveness of your debt. Experienced short sale realtors have plenty of experience working with loss mitigations in negotiating forgiveness of short sale deficiencies and can do the same for you. With the right expertise and handling, your short sale might just be your ticket to a fresh start, so be sure it’s in the right hands.

Avoiding Foreclosure in Sacramento

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Sacramento County Short Sale RealtorFor homeowners that dealing with a financial crisis, essentially any alternative to foreclosure is gladly received. Nonetheless, choosing the suited foreclosure alternative may be challenging. There are a huge number of factors that can affect a homeowner’s decision: their short term financial circumstance, their long term income anticipation, their assets, interest rates, the internal policies of their lender, the present as well as future market value of their home, even ethical and moral values may come to play.

To make things obscure, a great deal of the advice on foreclosure alternatives comes from self-interested parties with a “dog in the race”, so to speak. These may be lenders who are advantageous from loan modification, 3rd parties that make homeowners pay for guidance through strategic default, and individuals acclaiming themselves as experts in short sales or foreclosure avoidance, who in reality may have little experience or training on the subject matter.

With so many different concepts to consider and so much conflicting information out there, and such an important decision to be made, how can a homeowner abstain from a foreclosure and pick the best foreclosure alternative for their situation? Here below, we take a look at the pros and cons of a few of the major alternatives to foreclosure.

How to Avoid Foreclosure – Alternatives to Sacramento Foreclosure
Deed In Lieu Of Foreclosure

There is one more foreclosure alternative to be aware of, the deed in lieu of foreclosure. A deed in lieu of foreclosure is similar in concept to a short sale, except on behalf of selling the home, you hand back the home to the lender and in exchange, the lender will terminate foreclosure proceedings or amend not to decree foreclosure proceedings. Like with a short sale, it is important to negotiate a forgiveness of the deficiency if you are in a recourse state, or you may still be liable for the deficiency after the bank receives the deed.

Sacramento County Short Sale RealtorThe downside to a deed in lieu of foreclosure is that it can be rather challenging to get the lender to admit a deed in lieu. It is significantly easier to get a lender to agree to a short sale. As a matter of fact, many lenders will require you to put your home on the market for a certain timeframe before they will take into consideration a deed in lieu of foreclosure. With a short sale, you come to the lender with an offer and a buyer ready to pay, while with a deed in lieu of foreclosure you’re asking the lender to accept the deed to the property.

Sacramento Loan Modifications

Loan modifications are often proclaimed as a technique to avoiding foreclosure. Homeowners facing with potential foreclosure are often recommended to contact their lenders and work out a loan modification, where the lender alters the terms of the mortgage in order to help the homeowner remain in their home. As for the lender, it can be reasonable to accept smaller payments over a longer amortization period, temporarily freezing interest rates, or delayed payment rather than accept the losses they would face with a foreclosure, particularly where the property value of the home has severely declined.

While loan modification programs may be beneficial for the lender, for most aggrieved homeowners, loan modifications are a short solution that benefits the lender as opposed to the homeowner. If the property value of the borrower’s home has decreased to a point where it is significantly lower than the value of the mortgage, the homeowner will still be making Realtor mortgage payments for a home worth significantly less than what they are paying, all the while incurring further debt. If the homeowner as well dealing with unemployment or a significantly reduced income, then it is not likely that they will be capable of continuing to make mortgage payments in the long run. Thus, a loan modification may only prolong the inevitable.

On the other hand, loan modifications may be appropriate in other situations where the reason being for the homeowner’s financial trouble is a short term one, verses the long term financial problems that come with sharply declining property values and significantly reduced income.

Sacramento Short Sale

Sacramento County Short Sale RealtorWhen facing foreclosure, a Sacramento Short Sale is where the homeowner gets approval from the lender to sell the home for less than the value of their debt. In some states, non-recourse laws stop the lender from legally pursuing a judgment against the borrower for the debt remaining after the secured property has been purchased, meaning the homeowner is excused. In those states without non-recourse laws, the homeowner can classify a short sale with the help of a short sale specialist and negotiate a written agreement from their lending institution forfeiting their right to sue for the deficiency (the remaining debt owed by the homeowner after the home is sold). In return, the lender receives the proceeds of sale of the home without the legal and administrative costs associated with the foreclosure process.

The downside to a Sacramento Short Sale is that if you are in a recourse state and you still have significant assets, you will most likely still be personally responsible for the deficiency when the home sells for less than the value of the outstanding debt. Adding to this, there are few Realtors with the experience mandatory to support the complexities of a short sale. The homeowner must be very diligent in screening Realtors in order to emerge from a short sale with a positive outcome. However, with an experienced short sale specialist, a short sale may authorize the homeowner to salvage their credit, have their debt forgiven, and also avoid the public humiliation and spectacle of a foreclosure.

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