Who Pays The Costs In A Short Sale?

Who Pays The Costs In A Short Sale?

You may wonder why a sales contract says the seller pays for certain costs and yet the bank covers the costs. Here is how it works.

The sales contract may have a certain clause say: “Seller to pay title and seller’s documentary stamp taxes.” How does the bank pay that cost if it says the seller is paying it?

Email phillis@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

In traditional real estate (non-short sale), certain costs are normally paid by the seller and other costs by the buyer. For example, the seller doesn’t normally pay the buyer’s home inspector.

In these cases, the seller is actually paying those costs. So sales contracts have always been written like that. On a short sale, the costs are paid by the seller on the closing statement.

But, you aren’t paying them. Instead, they are being subtracted from the sales price. The short sale lender gets what remains after the costs are paid. For example.

Sales price: $100,000.

All costs paid by the seller: $9,000.

Net to the short sale lender: $91,000.

The short sale lender is actually paying these costs by simply accepting the lower amount. That is why it is called a “Short Sale.”

The lender is getting paid less than what they are owed. They would have to pay all of those costs if they foreclosed on the house and then sold it.

So, they might as well pay those costs now with the short sale.

Thinking about a short sale? I can help you short sale your property and get back on your feet. Send me an e-mail at beth@txhomerealty.com.  I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale Cedar Hill, Duncanville, Lancaster, Desoto and request a free consultation by email phillis@txhomerealty.com.

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email beth@txhomerealty.com to request a copy.

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536.

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy and The Texas Group Realtors are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.

Will I Still Have To Pay Property Taxes If I Do A Short Sale?

Will I Still Have To Pay Property Taxes If I Do A Short Sale?

The Texas Group Realtors recently received this question from a seller.

"I am thinking about a short sale, but I am behind on my property taxes. Will I still have to pay them if I short sale my home?"

Email beth@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

Here is the answer to this question: In most cases your lender will pay those property taxes. Property taxes are a first priority lien on a property.

That means that if a property is foreclosed upon, then they still have to be paid. They don’t go away for any reason.

This is also why most lenders want to charge you monthly and then pay the property taxes themselves. They know that the taxes are a big bill that only comes once a year.

Not everyone can afford that big bill. Because your lender knows they will still have to pay the taxes after a foreclosure, they are willing to pay them during a short sale.

So if they are liquidating the property, why net more money from the sale with a short sale and avoid a foreclosure? That’s why they will pay the taxes when you short sale.

I can help you short sale your property and get back on your feet. Send me an e-mail at beth@txhomerealty.com.  I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale Grand Prairie, Arlington, Ft. Worth, Mansfield and request a free consultation by emailing phillis@txhomerealty.com

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email beth@txhomerealty.com

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536.

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy and The Texas Group Realtors are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed.

Waiting Period in Purchasing a Home After a Short Sale was Recently Changed to 3 Years

Waiting Period in Purchasing a Home After a Short Sale was Recently Changed to 3 Years

The Texas Group Realtors recently received a question from a buyer. Here is her question.

Email phillis@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

"I just read your article Frequently Asked Questions about Short Sales. You mention that you can obtain another home loan two years after a short sale.

Who are these lenders and how can I contact them?  I have been looking but so far no luck.  Everyone is insisting we must wait three years. I'd appreciate any information you can provide."

We just heard back from our mortgage broker on this issue. Fannie Mae recently changed their guidelines for a loan after a short sale.

(Since most lenders and loan programs follow Fannie Mae's Guidelines, that means that almost every single lender changed their policies as well.)

When we wrote the article their guidelines had said that you had to wait two years after a short sale. Now those guidelines have been changed to 3 years.

The good news is that you can still buy a house after a short sale. Life does go on and will go back to normal. No matter how bad things may seem, they will get better.

Before you know it the 3 years will pass and you can buy another home. The housing market is still flat and will probably be flat over the next 3 years.

So you will be able to buy the next house for substantially less than what you paid for your current home. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at phillis@txhomerealty.com.  I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale Cedar Hill, Duncanville, Desoto, Lancaster and request a free consultation by emailing beth@txhomerealty.com.

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email phillis@txhomerealty.com to request a copy.

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536. 

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy and The Texas Group Realtors are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.

Can I Short Sale My Upside Down Home?

Can I Short Sale My Upside Down Home?

The Texas Group Realtors recently received a question from a seller. Here is the Question.

"If we are not behind on our mortgage but can't sell our home through a normal sale because we don't have any equity, can we still qualify for a short sale?

We would like to sell this property and get another property where we are not upside down. Thank you!”

Email beth@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

Here was our answer. There is actually a federal short sale program that encourages what you would like to do. It is called the FHA 4155 loan program.

It allows a person that is short selling their house to buy another one right away. However, there are a few caveats.

We have been told that you will need the following. (Guidelines can change at any time, so make sure you check them with a Mortgage Professional familiar with the program.)

A. A 640 FICO credit score or better.

B. You must be current on all installment payments and on your mortgage.

C. No bankruptcy or foreclosure on your credit in the last 7 years.

D. The home you are purchasing must be inferior to the one you are selling. I don’t know the exact guidelines, but I think it means it is a smaller home, or it has less bedrooms or a lower price.

E. You will need the 3.5% down payment for the new purchase.

The biggest hurdle will be getting your current lender to approve the short sale. Most lenders will approve a short sale. It just takes time and a little patience.

But, it is a great opportunity to move on from your upside down property and start building equity elsewhere. Thinking about a short sale?

I can help you short sale your property and get back on your feet. Send me an e-mail at phillis@txhomerealty.com.  I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale Waxahachie, Midlothian, Cedar Hill, Duncanville and request a free consultation by emailing beth@txhomerealty.com.

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email phillis@txhomerealty.com to request a copy.

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536.

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy, The Texas Group, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed.

What You Should Look For In A Buyer Of Your Dallas Short Sale Property

What You Should Look For In A Buyer Of Your Dallas Short Sale Property

Short Sales can be tough. Many buyers don't understand the process and think that since it is a buyer's market, then they set the rules. That's not the case.

You, the seller set the rules. After all, you still own the property. But, more importantly, you must set the rules for offers. If you don't then you dramatically reduce your odds of successfully short selling your property.

Email phillis@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

Here is what you should think about before you take your home off of the market.

1. You should only accept and work with one offer at a time. If you accept more than one offer at a time, then buyers get mad.

The primary offer might get angry because you accepted a backup offer. In addition, multiple offers confuse everyone involved including the short sale lender.

2. You should make sure the buyer can get financed for a loan. That means the buyer should give you genuine proof of that, whether a pre-approval or pre-qualification.

3. We recommend that the buyer inspect the home before the sales contract is signed. If any unexpected problems come up (and they do), then you can adjust the offer price that is submitted to the short sale lender.

This saves from having to negotiate the price again if a problem is found after the short sale is approved. Besides, the lender is more likely to accept a lower price if you send them a copy of the inspection.

4. The buyer agrees to wait the necessary 60-90 days for an answer on the short sale. That time will depend on the lender. Some lenders are fast and some are slow.

5. The buyer should put a reasonable deposit in escrow to keep them on board for the necessary time required for the short sale to be approved.

These are what we have determined to be necessary for a successful short sale. If you don't have a serious buyer then you are wasting your time and your agent's time as well.

Many buyers and their agents think that since a property is a short sale, then offers can be treated very casually. This only hurts the home sellers trying to avoid foreclosure when the buyers can't get a loan or back out after the inspection.

Helping someone avoid foreclosure is serious business. That's why we treat it as such. Thinking about a short sale? I can help you short sale your property and get back on your feet. Send me an e-mail at beth@txhomerealty.com.  I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale Desoto, Lancaster, Red Oak Glenn Heights and request a free consultation by emailing phillis@txhomerealty.com.

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email beth@txhomerealty.com to request a copy.

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536.

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy and The Texas Group Realtors are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed.

Bank won’t allow my seller to avoid short sale process

Bank won’t allow my seller to avoid short sale process

The Texas Group Realtors recently received a question from another agent. Apparently they were being mislead on a short sale by a large national lender.

Here is the question we received: “Do you have a number to contact Fannie Mae? The bank (Large National Bank) will not allow the seller to not do a short sale and agree to repay the loss on a promissory note.

She said that she has to talk to the investor which is Fannie Mae. My sellers just wants to sell and move on with their life.”

Email phillis@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

Here was our response. I understand the logic of what your seller is trying to do. They think that they can just sell the home for less than it’s worth, sign a promissory note for the difference, and move on with their lives.

The sad reality is that life’s not that simple, especially when you are dealing with bankers. Before they make any changes on anything, they want to make sure that everything is ok.

In order to make sure everything is ok, they will have to process the sale as a short sale. That is why they demand before they will transfer the upside down debt to a promissory note.

They always like to keep things at the status quo. Any big changes need to be very carefully evaluated. It’s just the way bankers work.

So, if your seller wants to sell and repay the debt on a promissory note, then they will have to go thru the formal short sale process. It’s the only option that I see.

Thinking about a short sale? I can help you short sale your property and get back on your feet. Send me an e-mail at beth@txhomerealty.com.  I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale Arlington, Grand Prairie, Duncanville, Cedar Hill and request a free consultation by phillis@txhomerealty.com.

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email beth@txhomerealty.com to request a copy.

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536.

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy and The Texas Group Realtors are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.

How Long Do I Have To Wait After A Short Sale To Buy Another Home?

How Long Do I Have To Wait After A Short Sale To Buy Another Home?

This is a very common question that The Texas Group Realtors get quite a bit. The answer depends on the type of loan you are looking to use to purchase your next home.

Here are the details on your options to buy another home after a short sale.

Email phillis@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

Owner Financing. You can buy a home with owner financing any time after a short sale.

FHA Financing. (FHA is very popular because it only requires you to put down 3.5% and pay your closing costs. You can usually convince the seller to pay your closing costs, thereby reducing your down payment to 3.5% of the purchase price.)

FHA’s current guidelines state that you can get an FHA loan immediately after a short sale, provided that you never missed a payment. If you were in default at the time of the short sale, then you have to wait 3 years before they will approve your loan.

Fannie Mae Loan. Fannie Mae is the most common loan program. You can get a Fannie Mae Loan in as little as 2 years after a short sale. But, you have to put 20% down.

If you wait 4 years, then you have to put a minimum of 10% down. After 7 years, you can get a Fannie Mae Loan and put less than 10% down.

The most attractive (and currently most popular) loan program in America is FHA. The reason is because it’s down payment requirements are much lower than anyone else. It looks like the best option to buy your next home after a short sale.

Thinking about a short sale? I can help you short sale your property and get back on your feet. Send me an e-mail at beth@txhomerealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale Midlothian, Cedar Hill, Duncanville, Dallas and request a free consultation by emailing phillis@txhomerealty.com.

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email beth@txhomerealty.com to request a copy.

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536.

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy and The Texas Group Realtors are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.

Questions Buyers Should Ask the Agent Listing in a Short Sale

Questions Buyers Should Ask the Agent Listing in a Short Sale

Are you looking to buy a short sale? Before you make an offer, you need to check and see how competent the listing agent is at short sales.

The listing agent is the agent with the property for sale. They will usually be in charge of processing the short sale with the lender.

Email beth@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

If the listing agent is a genuine short sale expert and knows what they are doing, then you have a very good chance of the short sale being approved and buying the home. I’ll show you how to separate the experts from the pretenders in this post.

If the agent is not a genuine short sale expert, then you are probably wasting your time. You should go find another home to buy.

First, ask them how many short sales they have successfully sold. If they have only sold 2-3 short sales, then the odds are not in your favor. You risk wasting months of time waiting for an answer on the short sale.

Next, ask them how many loans are on the property.  If there is only 1 loan, then you know two things. First, they know what they are doing. Second, this is relatively simple short sale.

If there are two loans, then the property is still worth considering. However, if there are 3 or more loans, then you might want to look at another home. Short sales with 3 or more loans are very difficult.

The first mortgage won’t give enough money to the second and third position mortgages. The second and third position mortgages won’t release their lien without more money. At the end, everyone loses (that is another story for another day.)

Lastly, ask who the lenders are If the lenders are Bank of America, or another notoriously bad lender at short sales, then you might want to avoid the property. However, a competent short sale agent can handle a Bank of America short sale with ease.

Thinking about a short sale? I can help you short sale your property and get back on your feet. Send me an e-mail at philli@txhomerealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale in Duncanville, Dallas, Mesquite, Rowlett and request a free consultation by emailing beth@txhomerealty.com.

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email phillis@txhomerealty.com to request a copy.

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536. 

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy and the Texas Group Realtors are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.

This Short Sale Negotiator Isn't Doing His Job

This Short Sale Negotiator Isn't Doing His Job

Here is a question that the Texas Group Realtors recently received.  "I am in the middle of a very long negotiation with Chase.

The seller had me to put a clause into the contract stating “upon approval of short sale by sellers’ lender, lenders, and/or affiliates, client, or heirs will be released from any monetary shortages or deficiencies from said sale of stated property upon successful closing and transfer of title from that date and forevermore.”

Email beth@txhomerealty.com to discover how other sellers successfully did a short sale and avoided foreclosure.

The short sale negotiator at the lender, has advised me that he will reject the file and close it out if we don’t remove this from the contract.  What do you think? How should I pursue this?"

Here was our answer: I think the negotiator is getting his ego involved. Many investors waive promissory notes. He is out of line (and breaching his lender's fiduciary duty to the owner of the loan) if the following applies:

1. If it is the loan owner's policy to not pursue a deficiency.

2. If accepting this short sale will net the loan owner more money than a foreclosure.

If those two things apply, then this negotiator is in breach of their fiduciary duty to the loan owner. You and I don't have millions of dollars to pursue a lawsuit, but we can contact the loan owner directly to let them know what is happening.

If they are going to lose money not accepting the short sale, then they need to know about Chase doing a lousy job.

Now, the negotiator has the authority to demand a promissory note depending upon who the owner of the loan is. Find out who the owner of the loan is.

Fannie, Freddie, FHA, VA, etc. Fannie, Freddie, FHA, and VA will let the borrower go free from all future liability. Obviously that doesn't apply if there is Mortgage Insurance. If the investor is one of those entities, then tell the negotiator that you will be contacting them directly.

When a bank should accept your short sale. A bank should accept your short sale when the following rules apply. All banks and servicers have a fiduciary duty to the investor of the loan.

If they own the loan themselves, they have a fiduciary duty to their stockholders. The duty is to get that investor the most money possible. So, a lender should accept an offer if it will net the most money.

Here is how we can assure the negotiator that the offer will net them the most money. Your only job is to prove that to the negotiator.

Do that by showing them that the property has been on the open market for 60-90 days. We need to be able to show that the house was easy for buyers to see and other agents to show.

Ask them the following, "I'm an experienced agent and I've had this house listed for X days. The seller has lived there the entire time and kept up on the house. It looks good. We have had 43 showings since then.

Out of that, only 3 buyers expressed interest. Out of those 3 buyers, the current buyer is the one willing to pay the most money. I'm doing my job marketing the property.

With the current foreclosure case status, the home won't be foreclosed until June or July. When you foreclose on the house, the owners will move out. The house won't be kept up anymore.

The listing agent will be working on 20 other homes and won't be able to do as good of a job as myself. Do you honestly think the home is going to sell for more money at that time?

They will have to agree that it is a losing proposition.

Thinking about a short sale? I can help you short sale your property and get back on your feet. Send me an e-mail at phillis@txhomerealty.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (469) 523-1402.

Discover how other sellers successfully completed a short sale Cedar Hill, Desoto, Lancaster, Glenn Heights and request a free consultation by email beth@txhomerealty.com.

Thinking about a loan modification? Our Dallas loan modification kit has the instructions you will need to get a loan modification approved with your bank. Email phillis@txhomerealty.com to request a copy.

Thanks for reading this, Phillis Nealy.

Phillis is a Real Estate Agent at The Texas Group.

Phone: (214) 650-5536.

A Realty company with Service as Big as Texas

View My homes for sale at www.southwestdallashomes.com.

Important Notice

Phillis Nealy and The Texas Group Realtors are not affiliated in any way, shape, or form with the government.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.