“World's Most Complete Neighborpedia”
Sponsor a Community — What is Localism? | Register or Sign In
Explore:   What's happening in your neck of the woods?
Home Mike Sher

Mike Sher

Blog_tag

It is nice to be loved! Short Sale Seller expresses her appreciation.

01-06-09
Mike Sher

It is nice to be loved!! Below is a letter from one of my past short sale sellers. This job is more about the people we help then anything else.

Dear Manager of Real Estate One, Royal Oak,

We wanted to let you know how much Mike Sher helped us with the sale of our home. Our home had been for sale for two years with three other Real Estate Agents with no success. We were frustrated and tired. We knew that the problem was that our home was worth less then what we owed our lenders. The other agents did what they could but were just unable to get past what we owed. In those two years of waiting for our home to sell, our employment situation became bleak and we went from wanting to sell to having to sell. Foreclosures were popping up everywhere and the value of our home continued to drop.

After speaking with an attorney about Short Sales, we were referred to Mike Sher. Mike met with us and explained everything. He was very straight forward about what needed to be done. He thought our best option was a Short Sale or we would have to walk away and be foreclosed on. Though we were not happy with the options in front of us, we decided to try the Short Sale. It was not easy, we needed to supply many documents to the bank and we had to sell our home for a lot less then we hoped. But, Mike worked very hard for us. He kept everything together to the end. Mike was able to find a buyer, get our lenders to agree, and close even with us out of state, all in 120 days. We would be glad to refer Mike Sher to anyone who is in the need of a Short Sale. He was honest, hardworking and always had a positive attitude. Thanks Mike!

Sincerely,

Michael and Kim Reed

2 Comments
Blog_tag

If you survived 2008, you will thrive in 2009!!!

01-04-09
Mike Sher

Friends, Realtors and Sellers lend me your ear. The time for excuses are over. 2008 is in the history books. It brought job losses, a financial freeze, billion dollar bail outs, slumping economy as well as Wall Street and Main Street deflation. But that "was then and this is now". As I woke up this cold January morning, the sun still rose from the east. The birds, (those tough enough to brave the Michigan winter) we chirping and I realized, the world was not coming to its end.

It is time for us to forge our new path; the road ahead is filled with foreclosed homes, Short Sales, tight lending guidelines and large inventories. THAT IS THE FACTS. The good news is that we NOW know where Demons lie. No more excuse left, we can not be blinded, surprised and shocked. We must push forward. 2009 will be far better then 2008, not because it will be easier. It is because we are a lot smarter, tougher and fearless then we were 2008.

If the sun can rise, and the birds can chirp, then we can sell!! Do not give up or give in, just give it you're all and that will be all you will need. Make 2009 the year you want it to be.

11 Comments
Blog_tag

"Excuses are the barriers we create to justify our failures." , Mike Sher

12-06-08
Mike Sher

Do not give up Buyers, Sellers, Realtors and all others a like. Times are tough but do not allow the negativity of the other steal your drive. Anything is possible if you believe in yourself. I work in the Detroit Metropolitan area. The economy is 2nd to none when it comes to layoffs, bad news and bad weather. Yet I still sell homes, why? Because I know I can. Because while others cry, complain and create a barrier to success, I smile, believe and make it happen. If a buyer walks away, find another buyer. If a bank will not accept a Short Sale, then find another negotiator. If you never give up then you will never lose.

Keep with it and I will see you on the other end of the mountain.

Mike Sher

1 Comment
Blog_tag

Realtors Short Sale, Frequently Asked Questions

11-04-08
Mike Sher

Frequently Asked Questions
What type of property qualifies for a short sale?
  • Banks may consider a short sale for various reasons.
  • A home in any location, size, style and condition may be considered.
Normal steps to start the short sale process.
  • The property or Home owner must be in distress.
  • Discuss the potential short sale option with the homeowner.
  • The homeowner must sign an authorization to release form.
  • You must have a signed sales contract for an amount less than what will cover all of the sellers' costs.
  • Contact the Loss Mitigation department at the bank.
Fax your offer along with the following to the bank.
  • Include a cover letter explaining why the offer is less than full price, the sales contract, justifying comps for the area and pictures, if you have them.
  • A net sheet or closing statement (a sheet that shows the bank exactly how much they will net after closing costs, taxes, etc. are paid).
  • A hardship letter from the homeowner that mentions the dreaded word... bankruptcy.
  • Estimate a cost of repairs using retail repair prices that the normal homeowner would pay for these items.
What happens to the homeowner's credit?
  • Keep in mind that the agreed upon price is payment in full. However, the homeowners may still owe the difference between the mortgage balance and the discounted amount via a deficiency judgment.
  • If granted, this judgment will affect the homeowners and their credit report just as any other judgment. You should try to get the bank to agree to accept payment in full without pursuit of any deficiency judgment. But sometimes you cannot and get that for the seller and they might have to sign a promissory note.
  • In addition, the difference between the mortgage balance and the short sale may be declared as income on your income tax return by means of a 1099.
  • Homeowners should speak with their accountant for advice.
What other options are available?
  • Since Fannie Mae and Freddie Mac have additional programs to assist sub prime borrowers, many lenders are more willing to offer loan modification options. This option can extend the term of the loan, add on delinquent payments to the loan principal, and/or reduce the interest rate to make the loan more manageable for the homeowner.
  • Also, there may be an option to utilize a repayment plan that requires homeowners to increase their monthly payments until the loan is current. Check with the mortgage lender and a real estate consultant who specializes in short sales. It may be possible to refinance an adjustable rate loan with a Federal Housing Authority (FHA) or Conventional Fixed Loan. Note that lenders will not postpone a foreclosure just because a property is listed, although they may delay the process, if you have a reasonable offer in the works.
  • The ideal candidate for a short sale is still making loan payments and has a credit rating worth preserving.
What are the seller's options if a short sale is rejected by the lender?
  • There are a variety of reasons a bank will reject a short sale - from too low a price to too many files on the loss mitigator's desk. You can look for another buyer or even try resubmitting the same contract.
  • A short sale might be rejected if the loan is less than a year old. In this case, the loan servicer that bought the loan may require the original lender to buy it back.
What financial liability will the sellers incur as a result of a short sale?
  • Many lenders ask sellers to sign a promissory note for all or part of the difference between the proceeds of the short sale and the debt obligation as a condition to a short sale. In such cases, the note gives lenders the right to sue a seller and attach other assets if the note is not paid when due.
  • According to many professionals, it's important to understand this difference if you work in a non-recourse state which may not allow the lender to pursue a deficiency judgment against a seller for any deficiencies after a property is foreclosed. Seek the advice of an attorney and your lender to determine what financial obligations exist for both parties involved within your state.
Are there tax liabilities as a result of a short sale?
  • Seek the advice of a tax expert. The IRS requires lenders to submit a Form 1099 stating the forgiven amount. Sellers who meet the Internal Revenue Service definition of insolvency (either in bankruptcy or with debts exceeding assets) may not have to pay taxes on the forgiven amount.
  • The U.S. House of Representatives has introduced the Mortgage Cancellation Tax Relief Act (H.R. 1876), which would eliminate taxes on any debt forgiven on a principal residence through either short sale or foreclosure.
  • Ask an account or attorney to provide more information on this bill.
Are For Sale By Owners qualified for Short Sales?
  • Homes that qualify for short sales are identified primarily by word of mouth. However, we have agents that specialize in short sale counseling which happens prior to filing bankruptcy.
  • For Sale by Owners are another source since many homeowners look for ways to cut their costs when selling their property. Their concern may not be warranted because many FSBO's don't realize that the bank covers the commission.
  • With many more adjustable rate mortgages ready to reset to higher loan amounts in the next couple of years, short sales represent a growing sector of the market.
If you have any further question, please mike@mikerealtor.com and we will gladly assist you. Some of the content comes from Real Estate One's Website
5 Comments
Blog_tag

The Simple Guide to Short Sales, but Short Sales are not Simple

11-04-08
Mike Sher
A short sale in real estate occurs when the outstanding obligations (loans) against a property are greater than what the property can be sold for.
Step One

Verify the value of your property. If you are selling the property through a real estate broker, your broker will provide you with an estimate of market value. If you are selling the property yourself, do your own market analysis of the area and your property.
Step Two

Add up all the costs of selling the property. If you are using the services of a real estate broker, the broker will provide an estimate of closing costs. If you are selling the property on your own, call a local title company or real estate attorney and ask, as a seller, what the closing costs will be.
Step Three

Determine the amount owed against the property. This will be the total of all loans against the property.
Step Four

Do the calculations. Subtract the total amount owing against the property from the estimated proceeds of the sale. On a short sale, this will be a negative number.
Step Five

Contact the lender or lenders. Talk to someone in the customer service department and tell them the situation. They may direct you to a specific department. Talk to a supervisor or manager if possible; this person will have more authority.
Step Six

Ask the lender what its procedures are for a short sale. Some lenders are willing to work with you by reducing the amount owed or making other arrangements. Others will look to the agents involved (if any) or anyone who's making money off the transaction to see if they concessions to make the transaction happen. Still other lenders will tell you know the dept is your responsibility, one way or another.
Step Seven

Sell the property. Select a real estate broker to assistant in marketing your home.
Tips

Closing costs will include title and escrow fees (if the seller is responsible for any portion of them, which will depend on your county), attorney fees, a portion of unpaid property taxes, re-conveyance fees, notary fees, delivery fees, documentary fees and/or transfer fees.

Remember that the amount on your monthly loan statement does not include interest. Interest is accrued until the date a loan is paid off, so you may have as much as 30 days of interest on top of the balance owing, and you'll need to include this interest in the total payoff amount.
Warnings

If a property is sold under a short sale, the lender may require the buyer to make up the difference, either through a personal obligation or collection. The IRS often gets involved with short sales, because they are seen as a relief of debt and may be treated as income. Check with your accountant.
If you have any further question, please mike@mikerealtor.com and we will gladly assist you. Some Content comes from Real Estate One
6 Comments