Public records indicate (View Your Public Notice Here) that you may be having difficulty keeping up with the mortgage payments on your property.
You may have received a letter or postcard from me because a foreclosure has been filed in your name in the Franklin County Court of
Common Pleas. If a court summons has not yet been delivered to you, one will arrive soon.
No one wants to hear news like this and I am sorry to have to deliver it.
Sadly, millions of Americans have found themselves in this situation recently due to circumstances beyond their control. Whatever your hardship is, please know that you are not alone and that there is a solution to your problem. You have options. As the market improves and property values increase, it becomes more an more likely that you could sell your house and break even or even make something on the transaction (contact me to have a valuation done on your home). But if your house is truly worth less than you owe you may need to do a short sale to avoid foreclosure.
For those who choose to sell their property to avoid foreclosure (It's a long process. You still have time.), there is a little known option that allows one to sell a property for less than is owed, pay nothing to make it happen, owe nothing afterward and avoid foreclosure. It's called a short sale (sometimes it is mistakenly referred to as a quick sale).
Why would your lender do this? Why would your lender take less than is owed as payment in full? Because your lender does not want your house. Customer service and collections people you deal with at the bank won't tell you this. Any conversations you have with your lender at this point will revolve around how much you can pay and when. The people you get to speak with are collections professionals. They have only one thing in mind – getting you to pay what is owed. If you can pay, then pay it. However, at some point it becomes apparent. You can't squeeze water out of a rock and you can't spend money you don't have.
Banks will settle for less money than you owe them to satisfy the lien on your house. You can sell that house that you owe $250,000 on for say $180,000 (talk to me about real world examples), what ever a ready willing and able buyer will pay, and the bank will often consider taking that and calling it even. You could walk away from the house at no cost and with no debt. It shows up on your credit report as a settlement and not a foreclosure.
Banks do this all the time. It's a business decision for them. They want to avoid foreclosure too. It is costly. It is time consuming and it keeps them from making more money on the cash that is tied up by the foreclosure process.
It is called a short sale. It may be your single best solution to your current problem. And there are only two small pieces of the puzzle left for you to get: A real estate professional, like myself, to guide you through the process and handle the negotiations with your lender and a ready, willing and able buyer.
I bring the solution, the professionalism and the avenue for finding a buyer.
What's the catch? It's healthy to be skeptical. As a Realtor® listing your home I am paid out of the proceeds of the sale of your home. That's right. The bank takes less than you owe them and they pay me to represent you. You don't write a check and you never have to reach into your pocket. In fact, if you have a HAFA compliant mortgage you may be able to get a small amount of cash back at closing, sometimes up to three thousand dollars! Though this is rare, the FHA short sale seller incentive of $1,000 is more common.
Now more questions start popping into your mind. What if my house isn't worth what I owe on it? What if my house needs repairs? How long will this take? What if it doesn't sell? What if the bank refuses to negotiate or declines to accept an offer?
One at a time:
House isn't worth what you owe – that's the kind of problem that a short sale solves. You list your home and get an offer. You get the best offer you can and you make it subject to the bank's approval. It is up to the bank to accept it or reject it.
House is worth more than you owe – it may not be worth what you think it is. Just because you paid $185,000 for it and the county auditor is taxing you as if it is worth $185,000, that doesn't mean it is worth that much in today's market. Sad but true, home values do go down. In the end, your home is only worth what a ready, willing and able buyer will pay at a given point in time. But if it really is worth more, you simply sell it and pay off the mortgage.
House is worth nowhere near what you owe – in today's market this is a far more frequent scenario. But don't be afraid that banks won't deal. They often do. The market value of the house is what it is (determined by comparable recent sales) and the bank knows this. Different banks have different guidelines but I have commonly seen banks take 67% of the amount owed them and/or 88% of the appraised value. In extreme cases I have seen settlements for as little as 10% of the amount owed.
House needs repairs – it doesn't matter. In fact, a house in need of repair often prompts a bank to negotiate more quickly and under better terms. The buyer who is getting a good deal on the house will need to make the repairs.
House has a second mortgage – while second mortgages do complicate a short sale, they don't make it less likely. Often the second lien holder would get nothing if the property is foreclosed on. They are often willing to settle for a very small fraction of what is owed to them.
How long does it take? – I've had listings for short sales go into contract in as little as 5 days. A house priced right should get multiple offers in the first 30 days. But all contracts are subject to bank approval and this takes time, often several months. They need to consider your qualifications for their specific short sale program and determine whether the net amount to the bank is acceptable to them. Banks are bureaucratic in nature and can sometimes take months to settle.
How long do we have? – Currently from the time you get your first foreclosure notice until the time your home is sold at Sheriff's auction is about twelve to fourteen months. Industry analysts believe this time will get shorter as the number of foreclosures continues to decrease. In most cases that is plenty of time to list your home, find a buyer and get the bank to approve the short sale. But you want to get the process started as soon as possible. Waiting too long after the foreclosure is filed to start the short sale process is often the cause for a short sale failing.
House doesn't sell – Lower the price. If the house doesn't get offers, the price is too high for it's condition and/or location. We will lower the price. At this point you shouldn't care who buys your house or what they pay for it. All you should care about is if the bank approves the deal and you don't have to bring any money to closing.
Bank rejects short sale – Try, try again. There are two reasons a bank would reject a short sale. One, you have the money to pay them. I know you would if you did, because there are certainly better ways to spend your time, or two, the sale price did not fall within their specific requirements. When the latter happens, we simply put your house back on the market and get a higher offer now knowing what the bank won't accept. My office has had a very high success rate with Short Sales. In the end, if the bank rejects all offers and proceeds with foreclosure you have lost nothing by trying.
I know you'll have more questions, but the most important thing now is for you to take action. Call me at 614-531-0710. I'll come over, look at the house and bring the necessary paperwork to list your home. I'll answer your remaining questions and then it's time for you to act. All in all, it is very little effort on your part and you risk nothing.
Call now. I can help.
Julia Hupp, Realtor®
PS – You would be hard pressed to randomly find another real estate agent that has the experience with short sales that I have. You need a specialist. I have listed and completed (sold!) over 250 short sales and worked with all of the major banks and many of the smaller regional lenders. Other realtors know I can get the job done and routinely refer their short sales to me. Call now at 614-531-0710 or click the "Get Started Now" button below.
Click the "Get Started Now" button above or call Julia Hupp at 614-531-0710. We will answer any remaining questions you have, review your situation and start the paperwork.
Now. We've seen home owners wait until the Sheriff Sale is scheduled to try to do a short sale on a home. That's too late to start. The best time to start is now.
Nothing. Nada. Zilch. Realtors get paid commission out of the proceeds of the sale. On a short sale there are no proceeds. The commission gets paid but it is subtracted from the funds the lien holders (lenders) would get from the sale. You still need to secure and maintain the property. But you don't pay any commissions.
Even if you include your home in a bankruptcy you still own the home after the bankruptcy is discharged. There are still benefits to selling your home as a short sale after a bankruptcy instead of simply allowing the foreclosure to be completed.
There is no guarantee that you will be able to successfully sell your house as a short sale. However, there is no better way to resolve your foreclosure if you are unable to pay the current amount due plus the accumulating legal expenses incurred by the lender to file the foreclosure.
Though we are discussing legal matters, none of this information should be considered legal advice. Please consult a legal professional for answers to your legal questions.