The first lender, Countrywide, insisted on a short sale price of $625K, although the first loan with them is less, at $588K. Countrywide said that because of the missed payments, etc., the monies owed are now around $610K. HUH?
The second lender agreed to a payoff of only $9K. And usually, it's the second lender that gives us grief. Not this time.
And my poor co-Realtor, who has worked on this listing for months is puzzled. She received several offers on this property. All of them were in the $550-575K range. The sellers accepted the highest and best, and they even have someone in back-up.
The realtor provided detailed comps and market analysis to justify the $575K sales price and to challenge the BPO. But the Countrywide loan negotiator won't even present this information to their investors, and wlll not budge from the $625K.
The sellers feel like they have no choice but to let Countrywide foreclose. Or they may file for bankruptcy.
Has anyone run into this problem before? Are other lenders demanding the same thing?
To illustrate a point about the value of using a comparative market analysis by a REALTOR, I pulled up the information on two of the most popular places where people go. To say that the difference is startling would be an understatement!
This house in Los Angeles is owned by my client who is debating whether or not to sell the house to his relatives who are renting from him so that he can buy his own house here in Alameda.
To get the market value, I advised him to get a CMA from a REALTOR. But I had to show him what it would be like to get the estimates from two of the most popular sites. And here's what we found.
CYBERHOMES
ZILLOW
WHAT A DIFFERENCE!
My client was amazed at the difference in the estimates. At least he now knows that going to either site isn't going to give him the information he needs to make an informed decision. Although these sites are sources of information, they are not or should not be THE best and only resource.
This was a fabulous way to make that point!
REFERRAL
And this was also a good time to let him know that as part of my service to him, I will find a REALTOR who can get him the information he needs.
Since I am a member of several networks, one of which is Active Rain, I have already engaged a REALTOR who had sent me a referral earlier this year. YEY!
Today, while reading through some questions posted online, I came across this one:
"What is the status of the CA Foreclosure Moratorium that went into effect in June 2009? Are lenders still required to try a loan mod with the borrower for 90 days?"
I wondered if this REALTOR was trying to stimulate discussion. But she honestly sounded like she needed guidance. It seemed to me that the subject matter would make an excellent blog as an update, and not as a question from a REALTOR.
So I researched it on California Association of Realtors site. There is a wealth of information there. I feel guilty that I don't visit more often to stay abreast of Market Matters or Legal Updates.
One of the best resources for this Q&A is found on the Housing Stimulus Laws for 2009 (must be a member to log in and get this info)
And that's where I found the answers to her question. I promptly responded, and encouraged her to go to CAR's website to see for herself.
CALIFORNIA ASSOCIATION OF REALTORS - This is a wonderful opportinity to review what our member benefits are. Looking at the various tabs, one will find:
When in doubt --- go to the most trusted source!
MY DEAR SELLERS
During a short sale, our mutual goal is to get an offer accepted as quickly as possible by your lender to prevent a foreclosure.
And as you already know, the effects of a short sale are far less damaging than a foreclosure or a bankruptcy.
REMEMBER YOUR GOAL: SELL THE PROPERTY!
Please understand that maintaining the home is still your primary responsibility during this selling process, whether you choose to stay or not at the property, remember what it takes to sell.
MAKE IT EASY TO SHOW YOUR PROPERTY
Keep the house looking nice inside and out. You literally only have minutes to make a good impression. Make that first impression count!
If it's messy and smelly, it won't sell. And if it doesn't sell, consider the alternative: foreclosure!
Allow the realtor to put a lockbox that other realtors can use to access the property.
How can we sell it if we can't show it?
Don't insist on unreasonable windows of time to show the property, such as showing only between 12 noon - 1 pm, or requiring 24 hours notice.
If you're serious about selling, you'll do your best to accommodate all interested buyers and their agents.
Keep the utilities on. Buyers, inspectors and appraisers need the utilities on to complete their respective activities.
A dark home is gloomy and uninviting. No power on will also make the home smell musty. Bathrooms and kitchens may show mildew. These are all unappealing and are turn-offs. Why take a chance? You'll only have to turn them back on for inspections later anyway. So just keep them on.
C
OMMUNICATE
Be accessible. Provide a number to best reach you, and return calls promptly
When you're going out of town, make sure you can still be reached by phone, email, fax.
Complete all required documents, especially your financial information, in a timely manner.
Keep your records current and handy. Don't pack away important information like your most recent tax returns, bank statements, pay stubs.
Keep the lines of communications open. Although doing a short sale transaction will take weeks from the time an offer is submitted, by the time the offer is ratified by the short sale lender, it becomes a race for time especially if the lender insists on a specific date to complete the transaction.
Your role as a seller doesn't end until the transaction closes escrow. What if the buyer backs out? We'll need to regroup quickly.
BE REALISTIC 
Accept the possibility that your property may be worth less today than what you owe, or what you paid for.
What your house sells for should not be your primary concern. Protecting your credit and your future ability to buy a home in the near future, is.
Remember that as a condition of a short sale, you as the seller will not receive any funds from escrow.
So does it really matter to you how much it finally sells for? Just aim to get it sold!
You may have to spend a bit of money to spruce up your property , but consider that an investment to accomplish your goal
TAX RELIEF
Yes, these are challenging times. Nonetheless, remember the provisions of the Mortgage Forgiveness Debt Relief Act "to amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on principal residences from gross income, and for other purposes."
Key point in a short sale: the difference between what you owe and what it finally sells for was normally considered income, and would have been taxed as such....until the Mortgage Forgiveness Debt Relief Act was passed in December 2007, and applies to debt forgiven in calendar years 2007 through 2012.
As such, because this is not considered income, you may not have to pay taxes on it --- please consult with your CPA to get the complete and right answer.
 |
|
|
Serving Alameda and Contra Costa Counties. Helping my clients with their real estate needs. Experienced and seasoned short sale specialist. Call me for exceptional real estate service and results!
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
