Considering a Short Sale?

Can't afford your mortgage? You are not alone, thousands in Las Vegas are facing the same problem. One option which you may want to consider is a short sale. In this article I will provide basic information. However, before you read the following, a couple of important considerations:

• Short sales are a complex transaction and are state + individual + loan + lender + investor specific. You need to consult with a lawyer who has considerable experience with short sales in addition to a Realtor who will handle the actual sale. I will talk more about the complexities later in the article.
• I am not a tax adviser, lawyer, accountant, etc. Take what I am saying in this article only as food for thought.

You might want to start with the following video; it's an introduction to short sales and the process I follow.

Las Vegas Short Sale

Short sales can be solution to a financial nightmare. However, getting a short sale approval is not the only goal. Lenders have up to six years after the short sale to seek a judgment against you all losses and fees. So, you need to work with both an experienced Realtor and a law firm that specializes in short sales. There is no cost to you; not for me nor the law firm. And, both the law firm and I only get paid if the short sale is successful so we are committed to success.

Types of Short Sales

There are two basic types of short sales processes. The traditional short sale program has been in effect for some time and has proven to be very slow and difficult to complete. In an effort to streamline the process, set up a program called HAFA (Home Affordable Foreclosure Alternatives). I won't describe HAFA here; Google “HAFA” and you will get more than you ever wanted to know. In the table below I compared some key differences between HAFA short sales and traditional short sales. See Short Sale FAQ for more information and links to additional information.

	HAFA	Non-HAFA (Traditional)
Borrower automatically released from future liability?	Yes	No
Time to complete	3 to 4 months	6 to 9 months
Know bank acceptable sale price	At start	At end
Short sale approval decision	At start	At end
Second mortgage assistance	Up to $6,000	None
Borrower moving assistance	$3,000	None
Threshold Eligibility Requirements	Yes – See below	Lender/Investor Specific

Below are a few of the most common HAFA Threshold Eligibility Requirements (For more details see this brochure.)

• Monthly payment must be greater than 31% of borrower(s) gross monthly income
• Property must be borrower’s primary residence
• First lien must have originated on or before January 1, 2009
• Borrower must be delinquent or default must be reasonably foreseeable
• The current unpaid principal balance may not exceed $729,750
• Borrower’s cash reserves must be less than the greater of $5,000 or 3 times the current monthly payment

If you are getting the idea that even HAFA short sales are complicated, you are correct.

Fees

Unlike other Realtors/attorneys, you pay nothing. Zero up front and zero on close. All my fees and all the attorney fees are paid for by the lender(s) out of the proceeds from the sale.

Process

The process is reasonably straight forward as illustrated below.

The short sale process starts with you and I discussing your situation. Once I have a reasonable understanding, I will guide you through the information you must collect. This information must be complete before we see the attorney because without it, they will not know how how to advise you or me. based on what they learn from your information package, it may be advantageous for you to take the time to re-arrange your finances such that you more clearly qualify for HAFA. The will also be able to tell you what the impact will likely be on your credit and other issues.

Key Differences

There are a lot of people who jumped into the short sale market. Many of them have little training and some appear to be in it only for the up-front fees they collect before they even start. Compare anyone else you are considering against the following four key advantages I offer:

• No risk and no fees to you, the borrower, whether the short sale is approved or not.
• On non-HAFA short sales, while we can not offer any guarantees the law firm and I work hard to get the lender to waive future liabilities. This is where the lawyers really shine. Lawyers can play hardball in ways that Realtors can not.
• Pre-planning your financial image. One step in the above process is labeled Restructure Finances. Sometimes, changes in your financial picture can be made such that you more clearly qualify for HAFA where right now you might not. This is a critical and time consuming step that most others do not offer
• Your home must be sold and my marketing is aggressive and unique. See this page for the details.

Next Steps

If you are considering a short sale, contact me. Short sales can be solution to a financial nightmare but they are complex and you need to work with people who have your interest at heart. The fact that both the law firm and I only get paid if the short sale is successful is a good indicator of our self confidence and our commitment to a successful short sale.

Contact me if you are considering buying or selling Las Vegas real estate. You will be glad you did.

...Eric

Eric Fernwood
RE/MAX CENTRAL
8400 W. Sahara Ave
Las Vegas NV 89117
Email: EricFernwood@gmail.com
Website: www.EricFernwood.com
Investment Blog: Blog
YouTube Channel: YouTube Channel
Cell: 702-358-8884
Fax: 702-202-2020

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