Short Sales for REALTOR s Krawczyk.pdf · Short Sales for REALTOR®s “ Sell ... “ Sell a House – Buy a Home – Foreclosure Specialist ... Retail vs. Short Sale vs. REO Hybrid

“ Sell a House – Buy a Home – Foreclosure Specialist” © 2007 F.C. Tucker Company, Inc.

Short Sales for

REALTOR®s


Fred Krawczyk

REALTOR®, Broker, SFR

Short Sale Specialist

Tel: (317) 294-4425

Email: [email protected]


Home Ownership

w/Financing (Loan)

Note &

Mortgage Deed


What Is Foreclosure? … a process … not an event … ~ 9 Months

• Law Suit filed against the

homeowner by their Lender

because the homeowner has

defaulted on their loan payments.

• The Lender hires a law firm

located in the same state as the

property.

• Sheriff Sale – Bank Owned,

HUD, VA


Legal Matters

1. Foreclosure Judgment

2. Deficiency Judgment (Collections)

3. Bankruptcy (Financial vs. Ownership)


1. Loan Modification

2. Short Sale

3. Deed in Lieu

What Are My Client’s Options? when Facing Foreclosure


Short Sale

• Negotiation Process from which the

Lender (Creditors) agree to take

less than what is owed against the

house to release their lien.

• Reduced payoff of Jr. liens (2nd

Mortgage, HOA, Credit Cards …)

• Keep a foreclosure judgment off

Credit Report

• Waive Deficiency Judgment

• 1099 Taxable Income


Why Do Lenders Short Sale?

Their Business is Money … Not Real Estate

• Loss of Loan Payments (+12 months)

• Attorney Fees

• Property Holding Cost (Bank Owned)

• Prevent Ownership Liability (Bank Owned)

• Have to Keep Money Reserve w/ Loan Default

** A synthetic CDO is a complex financial security used to

speculate or manage the risk that an obligation will not be

paid


Successful Short Sale

1. Seller Cooperation

2. Find a Qualified Buyer

3. Lender (Creditor) Negotiation


Selling a Short Sale

1. Condition

2. Location

3. Price


Short Sale Process

1. List The House

2. Get Offer w/Qualified Buyer

3. Submit Short Sale Package to Lender

4. Lender Negotiation / Accept / Counter

5. Get Buyer to Closing (30 days)


Example Short Sale Properties

45 Days – Bank of America

70 Days – HSBC

240 Days – Citizens

45 Days – Wells Fargo

120 Days – Bank of America

100 Days – Harris Bank


Retail vs. Short Sale vs. REO Hybrid Transaction

• Lender doesn’t own the property / but controls the sale

• Lender Approves the HUD1 Settlement Statement

• Short Sale Addendum (3rd Party Approval)

• Lender won’t do repairs but may secure and winterize

the property (Protection of Collateral)

• Contract Law Seller and Buyer

• Presenting multiple offers to the Lender


Servicer (Lender) vs. Investor


Short Sale Management


FHA Preforeclosure Program ELIGIBILITY

1. The property must be owner-occupied, no “walk-a

ways” or investment properties. Exceptions: when

it is verifiable that the need to vacate was related

to the cause of default (job loss, transfer,

divorce, death), and the subject property was not

purchased as rental investment, or used as a

rental for more than 18 months.

2. The Mortgagor must be 31 days or more

delinquent at the time of the Preforeclosure Sale

closing.

3. The Mortgagor must provide documentation

substantiating a reduction in income or an

increase in living expense, and documentation that

verifies the Mortgagors need to vacate the

property (if applicable).


Buyer’s Agent Expectations

1. Set the Expectation with the Buyer Up Front

(90 Days Offer to Lender Response / AS-IS)

2. Reasonable / Clean Offer (Seller Concessions –

Home Warranty – Survey)

3. Pre-Approval / Proof of Funds

4. AS-IS

5. Hurry up and Wait (Time is of the Essence)


Short Sale Approved

1. Short Sale Deadline (30 days)

2. Inspection / Appraisal

3. Earnest Money

4. Utilities (Buyer)

5. Loan Officer Management


Renovation Loan / Repair Escrow


Questions & Answers

Documents

Short Sales for REALTOR s Krawczyk.pdf · Short Sales for REALTOR®s “ Sell ... “ Sell a House – Buy a Home – Foreclosure Specialist ... Retail vs. Short Sale vs. REO Hybrid