Short sales comprise around 30% of the closings we see in our office and there doesn’t appear to be an end in sight! In talking with agents, I find they either want to know everything about them or want to avoid them like the plague.
If you are considering dipping your spoon in the short sale broth, there a few things you need to know before agreeing to take one of these sales on. If you are unable to gather this information from the inception, it might be wise to run!
You must at minimum know the following:
• All the lenders associated with the home, the loan balances, how many months delinquent the prospective client is and if there are additional liens.
• The seller’s housing expenses – interest, principal, taxes and HOA dues.
• The actual reason for the hardship.
• How much money the client earns monthly and their debt ratio.
• Do they have other assets?
• Are they able to make a financial contribution and if so, how much?
• Is the property vacant or occupied and is it the primary residence or not?
• Is the property subject to a Homeowner’s Association? Are the dues current?
• Have they received a Notice of Trustee Sale (Foreclosure notice)? If so, how much time do you have to try and sell it?
If you can’t get this information without pulling teeth, you are guaranteed to be pulling your own by the end of this process. There will be piles of subsequent paper to collect after you decide to help these sellers and the amount of cooperation you receive in the beginning is a good sign not only to determine if you’ll be able to sell the house, but to determine if you can work with these clients!
If you are interested in a little free feedback, you can go to www.chicagotitleshortsale.com. You can follow the forms link and be taken to Mortgage Resolution Service’s pre-qualification form (MRS is a sister company of Chicago Title). Once you complete it and email or fax it back to them, they’ll take a look at it and offer you an expert opinion on whether or not you should partake in the soup!
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