The Do's of a Short Sale in Colorado
Also click here if you missed the Don'ts of a Short Sale
1) Obtain all existing lender information from your client. Name of the bank and loans numbers.
2) Have seller sign authorization so you can speak to the bank on their behalf make sure to have them include their SS#
3) Order O&E and TBD on the property so you have no surprises. Judgments, bankruptcies, etc.
4) Order payoffs immediately so you know exactly what the #'s are.
5) Order the HOA status letter, you need to know the entire picture prior to a contract coming in.
6) Get Short sale package from lender, some lenders provide that, some others not.
7) Listing Agreement/MLS contract all of these should state that any offers or contracts are contingent upn seller's lender(s) accepting a short sale.
Please add more to the list and I will include them in the main blog
Aurora Colorado Real Estate Homes for sale in Colorado Spanish Speaking Real Estate Agent Realtor
The do's of a Short Sale in Colorado
21 comments • Aurora Colorado Real Estate Ray Saenz, Colorado Realtor • May 18 2007 08:49PMComments
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Sally, you do not have anything on mind to add right now ? have you done short sales ?
Ray -- same comment as before -- make sure the seller know about the tax consequences. Also, lenders are telling me that if there adjustments to the price -- e.g. a reduction in price due to home inspection -- or a credit -- this must also be approved by the lender in a short sale -- and that it cannot be approved quickly -- any changes must be submitted not less than 10 days prior to the closing date -- the lender said to build in a longer closing period to accommodate for the time it will take the lender to approve any changes.
Thanks for the tips, I guess it's always good to be educated on these issues!! Best of luck to you!
Joan, sure thanks for your proper comment and good advises, I will add this as soon as I can :P thanks for stopping by :P
Randy :) thanks for stopping by my friend and to read my blogs, I appreciate it :) as I wrote in the other blog, I always have in mind many of your great blogs :)
Ray - That was very nice of you to acknowledge my blog posts.
Siha, I am glad that you found it useful, they are just some starting tips, if you have more and you want to comment how you are doing on that, let me know, the lender that you are working with , etc
:)
OK, now I'm REALLY stupid.... but..... admitting it is the first step.
As the question above:
3) Order O&E and TBD on the property so you have no surprises. Judgments, bankruptcies, etc.
*** This statement I'm inferring to mean have a property search done (Title/Abstract company) for open mortgages, leins, judgements, etc? What's TBD mean ... "Order a TBD?"
5) Order the HOA status letter, you need to know the entire picture prior to a contract coming in.
*** What's a HOA status Letter?
THKS in advance....
Rob
Do you work the foreclosure list and ntice of default list every week.
Great tips! I, too handle short sale processing but my clients are agents and FSBO's. I have been handling Short Sale processing for a long time now.
One of the Do's I would add to this great list are pictures. If your representing a seller on a traditional sale, your going to take pictures of the most appealing aspects of the property. In a short sale, your going to take the worst pictures of your life. Document the worst of the home! Why? Because you need to convince the lender/investor that they stand to lose more if it goes to foreclosure.
Secondly, most loss prevention department employees do not have time to look at photos and to review comments about the condition of the property. Also, they do not want to assume this information is accurate and will not likely verify it unless it is confirmed by the BPO/Appraiser. So, it is very important to meet the appraiser/agent at the property and ask them to document the problems with the property. This will substantiate the property's short comings and will more likely be taken into account.
Scott
What documents are you getting from the lien holders that assure the Seller that the lien holders won't file against them for the deficiency? Colorado does not have anti deficiency rules like some other states. I have heard of Short sellers having the mortgage companies come after them for the deficiency but there must be a way to prevent that by making it part of the short sale agreement.
JP,
One thing is that buyers in 2007, 2008 and 2009 they don't have to pay taxes from the Deficiency only and always from the original purchase price amount, if someone refinanced and they got cash, the difference between the original purchase amount and the refinanced loan amount will not be forgiven. I'm not a tax advisor or lawyer, I am just sharing what I know and if you really want Taxes or Legal answers you should consult a Legal advisor / lawer or a tax advisor.
The other thing that you can do for lender's collectors is to get something in writing that they will not go against the defiency, remember that Collectors have the right to collect the deficiency if they want within 6 years in this state that's what I remember, so for instance, they can try to collect after 3 or 4 years suddenly the difference, that's only if they want it, many times they don't do anything about it.
Good Luck
Ray Saenz, Realtor
Colorado Homes for Sale
As a listing agent of a short sale I find it very important to update the selling agent, even if there is no real update. communication is a very helpful tool between Short sale Realtors.