A Real Estate Short Sale is defined as: Lender’s agreement to accept less than what is owed (i.e. short payoff of what’s owing), as an alternative to a foreclosure.

Many homeowners today owe more on their house than what it’s worth.  Homeowners are upside down (underwater on their house).  In recent years lenders are finally starting to accept this more and lenders are allowing homeowners more than ever to do a short sale instead of taking the house back through foreclosure.   A foreclosure to a bank is never a good thing.  Banks succeed by keeping stockholders happy, when a homeowner gets behind on payments their loan turns into a non performing asset in the banks eyes and to their stockholders.  When a loan is in non performing status, the bank by federal law has to hold an 8:1 reserve(this ratio changes from time to time) for every dollar of the non performing asset.  This puts a strain on the bank and as you can imagine limits the profits of the bank as it needs those reserves to be profitable.   Numbers will vary in reports, but most agree that a lender will lose $50,000+ in the process of taking a house back through the foreclosure process. Please consider all opportunity costs of lost monies, all reserve requirements with tied up monies, consider all winterizing of the house, evicting the homeowner at the end of redemption, damage to the property, taking over taxes, water bills and taking over all liabilities, as well as not receiving any more payments.

The bank knows they will be losing in multiple ways, it’s our job as negotiators to point this out to them.  Because the lender soon realizes how much money they are making we negotiate with them to do a short sale for less than what’s owing, even with a substantial loss on a short sale, it’s still a better option for the lender over a full foreclosure.  We, as negotiators get paid commissions by the bank, and do all of the negotiating and paperwork.  Also we make all of the numerous contacts, and to the right people.  Due to the completness of our paperwork and experience, I am sure you can appreciate that a banker (loss mitigator) is going to put our file, 1 of 400 they can’t possibly handle, to the top of the stack because it’s the most complete, plus they get paid to close them from the banks side, they work at a desk just like us.

We try to get this message out to as many homeowners as possible, we want to be able to let homeowners know that it’s a win-win situation for everyone.  There will be questions of how it affects you with taxes, credit score, and future loan qualifying, these are all important questions, the more important thing to understand that short sale is always a better solution than giving the house back to the bank.  The timelines of your credit, and future loan qualifying privileges are greatly shortened when opting with a short sale over giving the house back to the bank.  Current underwriting qualifications for loans with Fannie Mae and Freddie Mac prove this.  The idea with a short sale is that we need some information upfront, and some documents signed, so that you understand the process, but from there, you can be assured we know what we are doing, and we’ll take it all over from there.  A few people will need to get into your house for showings, and down the line we’ll need you to show up at closing to sign the paperwork for the new buyer.  We want to make this process as easy for you as possible.

We have a full circle vision handout we can give you if you ask for it, this will show you how we can help you after the short sale or during the process with credit repair and recovery and have a plan in place for your next property and the future.  We help a large number of homeowners with this process, this is all we do, so we are short sale experts.  You can go to our online website and fill in your info, or please call the phone number listed to the right, on this page.  You are welcome to talk to us by phone with questions or come and meet at the office to discuss your situation. We appreciate that all homeowner situations are unique and we welcome that.

Please review our blog and many of our case studies of other satisfied customers as well as handouts, educate yourself on the process so that you feel 100% comfortable and when you are ready to call we would be happy to help you.

If you are interested in doing a short sale please go to www.WeCallYourBank.com

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