Marples & Associates Realtors

Short Sales happen when a lender agrees to accept less then the amount owed against the homes because there is not enough equity to sell and pay all costs of sale. Not all lenders will negotiate a short sale, and that is why a real estate agent can be tremendous help by contacting the lenders loss mitigation department to find out.

You can’t just wake up and decide you are going to sell your homes at a loss by asking for a short sale. Typically, lenders won’t even consider a short sale if your payment are current. Lenders will be more agreeable to negotiation if you payments are in arrears. Plus, if you have cash assets, the lender might try to tap those accounts. Doing a short sale is not for the faint of heart.

How is the Seller’s Credit Affected?

According to David Steep, division manager at Vitek Mortgage, sellers will take a bigger hit on their credit report by going through foreclosure or giving the lender a deed-in-lieu of foreclosure. Steep says the points lost on a FICO score (the formula used to assess a borrower’s risk factor) are as follows:

Foreclosure or Deed-in-Lieu of Foreclosure
Both of these solutions affect the credit the same. Sellers will take a hit of 250 to 280 points. This means is a seller’s IFCO score before foreclosure was 680, it could dip as low as 400.

Short Sale
The affect of a short sale on a seller’s credit report is much less damaging. The ding on credit will show up as a pre-foreclosure in redemption status, Steep says, which will result in a loss of 80 to 100 point. This means a short sale with a previous FICO of 680 will see a fall to 580 to 600.

Waiting period before buying another home

Foreclosure or Deed-in-Lieu of Foreclosure
Steep says a seller who wants to buy another home after foreclosure will end up waiting about 36 months before a lender will offer any kind of interest rate that makes sense.

Short Sale
The good news for a short sale seller is the wait is much shorter before buying another home. “They can buy again in about 18 months at a reasonable interest rate” says Steep.

Short Sale/Foreclosure Deficiency Judgments
The bad news is a seller could be subject to a deficiency judgment for the difference between the loan amount and the amount paid. In California, purchase money loans are not subject to efficiency judgments; however, hard money loans, home equity loans and refinances are. Other states have laws regarding personal guarantees, which could also result in a deficiency judgment if the home owner personally liable for loan repayment.

The lender has sole discretion whether to pursue a deficiency judgment in those instances when the judgment is permitted. To determine whether a pending foreclosure or short sale is subject to a deficiency judgment, talk to a real estate lawyer.

For sellers trying to decide whether to let a home go through foreclosure versus attempting a short sale, salvaging their credit is the main advantage to doing a short sale. Be sure to seek legal and tax advice before making this decision.

Article obtained from about.com and authored by Elizabeth Weintraub who has an extensive background in real estate spanning more then 30 years.

Dear Homeowner,

On behalf of Cathie Marples and The Marples Team, I want to thank you for the opportunity to present our services. I am confident that we can provide you with unparalleled real estate representation. Over 70% of our business is derived from referrals and past clients. We believe that this is the clearest and truest reflection of our unequaled commitment to our clients and their trust in our representation.

If you are interviewing other Realtors, I would ask you to closely consider these facts:

Cathie Marples & The Marples Team closed nearly 200 real estate transaction sides in 2006. Our nearest competitor closed approximately 110 transactions. We are currently on pace to exceed our all time sales record.

Cathie Marples & The Marples Team, due to our position, represents the highest probability of selling your home, representing the buyer and producing the lowest possible commission expense. No Realtor Group in your marketplace currently competes with the level of sales attained by Cathie Marples & The Marples Team.

Marples & Associates Realtors have 30 years experience selling real estate in your marketplace. Our Team has successfully closed several thousand transactions totaling nearly one billion dollars in homes sales.

Cathie Marples & The Marples Team are the only real estate group in your marketplace with a four member, full-time staff who oversee every aspect of your real estate transaction with unequaled attention and commitment.

Our Team has an administrative staff and expert Realtors who are available 7 days a week to show property to our buyers and preview all of our active listings!

Cathie Marples & The Marples Team hold every major sales record for residential homes sales in your marketplace. We believe this success is closely tied to our unrelenting philosophy of treating every real estate transaction as if it were our own.

Please feel free to call our offices if you have any questions. Thank you for your time and we look forward to working with you.

Best Regards,
Matt Marples