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Wachovia makes a short sale short

We received an offer on one of our listings on March 10, which was signed by by seller and buyers on March 12. It was a short sale, and subject to the bank’s approval. Usually this is months is getting a response from the lender so short sales are notoriously LONG in closing though short in money.  Anclote Title Services has two full time short sale negotiators who are diligent in pursuing each one of their short sale contracts. They coach the seller and Realtor to be sure that the package going to the lender is complete to the smallest detail, submit it in a form that can be easily reviewed, and stay in touch with everyone throughout the process.

Today we closed on that sale – yes, it was approved and closed in less than a month!  Hurray for Wachovia, for Tami and for Anclote.  Thanks for making this work the way it should.

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Short Sales

Short sales are sales at a price that’s not high enough to pay off the mortgage. So – the money is short. Sadly, the time to complete a short sale is anything but short. USA Today had an article this morning on short-sale frustrations. We’ve represented both sellers and buyers in short sales and it’s generally a case of Wait – Wait – Wait. We’ve had buyers that didn’t get a lender response for 6 months. Many times buyers will get tired of waiting for months for an answer to their offer and will withdraw. Sometimes the lender will counteroffer and the buyer will decline.  Back to the starting gate. USA Today cites a study that says just 23% of short sale offers actually close. If I had to make a guess from experience, I’d say perhaps only 5% of the offers actually close – perhaps 23% of the offers that get a response from the lender close.

The timing and complexity gets more complicated if there is more than one loan. If it’s a home equity loan, even with the same lender, it’s a totally separate department. Sometimes there are second or third mortgages. Sometimes FNMA needs to approve. Sometimes a guarantor needs to approve. Sometimes the mortgage is owned by multiple investors. And yes – by the time the lender responds, the market may have changed and the buyer may not longer be willing to pay the once-offered price.

It helps if the real estate agent and/or title company checks to be sure the original documentation (financial statements and hardship letter from the owners, brokers price opinion, etc) is complete, as the package will keep getting rejected if anything is missing, so the time line doesn’t even start.

We hear that the government has plans to streamline the short sale process.

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Short Sales – are they a bargain?

Many of today’s “bargain” properties are short sales. Are they really a bargain?  Maybe.

Some properties are listed below what the lender will ever agree to – it’s the current owner setting the price (often at a price recommended by their agent). These homes are “short” in that the sales price is less than is owed on the property. They are NOT “short” in time. Any offer that the seller accepts must still be approved by their lender. If the seller has more than one loan, it gets even more complex. It may take several months before the lender tells you if your offer is accepted. and they may continue accepting other offers during that time.

If you don’t have that much time or don’t want the uncertainty, you may want to look for properties offered by owners at short-sales  prices that don’t require third party approval.  If you’d like help finding these, contact The Simms Team at ALVA International, Inc.

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We did it – a short sale finally closed

Short sales are anything but short! and they’re anything but certain.  It’s can be 3-5 months before you hear back from the lender on whether your offer has been accepted – and meanwhile they’re taking any other offers that come in. You need tremendous patience to pursue a short sale. (A short sale is when the owners owe more money than the current market value of the home, so they will be “short” of paying off the mortgages.)

Rob wrote an offer in February for our clients – and they waited for an answer until August!  Then the lender wanted to close in 10 days, and we hadn’t – of course, since the offer wasn’t accepted –  even done the inspections.

This home in the Old Northeast area of St. Petersburg closed yesterday. This is the first closing, despite writing offers for our clients on over two dozen short sales this year.

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Are short sales a good deal?

Lately we’ve had many buyers asking to see short sales, because they’ve read so much about what bargains they are. We caution them that in our experience, though we’ve had several short sale “contracts” accepted by sellers, we have had none that actually closed. Any contract will be subject to acceptance by the lender – and if there are additional mortgages, a home equity loan, or a business loan secured by the home, the issues increase significantly and the likelihood of a closing diminishes. Read the rest of this entry »

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