Greater New Haven CT Real Estate

There are a number of complexities involved in short sales.  In order to understand the entire short sales process, please read the Short Sales in Branford CT and New Haven County series posted here:

Short Sales - Part 1 - What You Need To Know

Short Sales - Part 2 - Are You Qualified To Do A Short Sale?

Short Sales - Part 3 - What You Need To Do To Prepare For The Short Sale

Short Sales - Part 4 - What The buyer Needs To Have With A Short Sale Offer

Short Sales - Part 5 - Myths and Truths About Short Sales

When a buyer has made an offer all of his/her supporting documents will be included.  the seller and their agent have all the seller documents put together for their short sale package.

Every document will be checked by the agent to make sure that every document is filled out correctly and that the loan number is included on every page.  The agent will now contact the third party lender to get the instructions to submit the package to that lender. 

The majority of lenders will request that the package be faxed.  Other lenders may ask that the package be send by express mail. Whatever the method the lender chooses, keep a duplicate copy of the short sale package ready to re-send in case the original gets lost or is not received.

Insider Tip:  Save time by purchasing a stamp kit at Office Depot so you can stamp all the pages of the short sale package with the loan number instead of hand-writing it on 80 to 100 pages of documents.

Once the short sale package has been sent, confirm receipt by calling the lender to ask if they've received the package.  If the lender has received the package ask what was the last page they received, what exactly was on that last page and how many pages were in the package.

Insider Tip:  Get on the phone to the lender first thing in the morning before other callers start calling. Be the first in line

Once phone contact is made to the lender, confirm that they have received and package and that this lender is holding the note for this property.  Many times a seller will be making payments to one note holder only to find out that the note had been sold to someone else.

Quite often there are note holders that service loans they do not own.  In these instances, the servicer oversees the care of all of the short sale paperwork and acts on behalf of the note holder.

Lender may also contract their short sales to companies that just do short sale processing and negotiations. These companies are getting paid upon the completion of each short sale and are quicker to respond and you can usually get right through to the negotiator on the file.

Then there are the lenders trying to do it all by themselves.  They own and service the note and handle every detail of the short sale. These tend to be the most difficult lenders to get through to. They have no experience in doing short sales and are totally overloaded with files.  You are working with a a salaried employee who has little to no knowledge of the real estate business. Many times a buyer is gone by the time these lenders do something with your short sale package.

Insider Tip:  Even if  you do lose the first buyer, you've accomplished three things.  One, you've completed your short sale package and it is submitted to the bank.  Two, you have demonstrated to the bank that you are making every effort to sell the property in  many cases delaying a foreclosure.  Three, you have discovered what the lender tolerances are for a deal they will accept.  This will make it easier to negotiate offers and contracts with subsequent buyers.  More information on that in the next post, Part 7.

Mortgage Assistance Relief Services Disclosure

RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.  If you stop paying your mortgage, you could lose your home and damage your credit rating.  RE/MAX Alliance is not engaged in the practice of law nor gives legal or tax advice.  It is strongly recommended that you seek appropriate professional legal counsel and tax advice for any real estate transaction.

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Contact Donna Bigda, CDPE, e-PRO, Realtor®, RE/MAX Alliance Licensed Realtor® in the State of Connecticut at 203-488-1641, ext. 214 to list your property for sale or to purchase a property in Branford, Guilford, Madison, East Haven, New Haven and the rest of shoreline area in New Haven County Connecticut.

If you're thinking about buying a home in Branford CT there are plenty of great buys in today's market and now is one of the best times to buy while interest rates remain low. For more information on Branford CT real estate homes or condos, see Branford CT real estate or sign up today to get access the hottest new listings here Branford CT homes and condos. 

Disclaimer:  All information provided by this author is strictly an opinion, is not guaranteed, may be based on information collected from several sources, which may or may not be deemed reliable at the time of researching this article and may be time sensitive.

Copyright © 2009 by Donna Bigda, All Rights Reserved ...*Short Sales in Branford Connecticut and New Haven County – After The Offer Comes In - Part 6*

Short Sales in Branford Connecticut and New Haven County - This is a series of articles for buyers and sellers to better understand what a short sale is and how to decide what to offer on a short sale, myths and truths about offer prices on short sales.

Here are the links to the Short Sales In Branford Connecticut and New Haven County Series:

An Alternative to Foreclosure

Do you qualify to do a short sale in New Haven County Connecticut?

What you need to have in your Short Sale Package.

The process of the Short Sale; what happens next. 

There is quite a bit of misinformation about how much you can buy a short sale for. There are those that are watching late night TV shows about buying real estate at 50 cents on the dollar and with no money down.

MYTH #1- The lenders are so desperate they will accept any low offer that is offered on a short sale.

TRUTH- The lenders would rather work out solution that is workable with the homeowner. Most use a formula to determine their loss and what the actual net proceeds they will accept at a short sale closing.

MYTH #2- The lenders are just waiting to get your low ball offer!

TRUTH- Lenders have a policy to follow.  The policy is that the listing agent submits the short sale package from the seller along with the buyer’s short sale offer and package. The lender will then order a BPO   The BPO is not an appraisal.  It is a Broker’s Price Opinion.  The BPO usually comes back in 7 to 10 days. The lender pays for the services of an agent to go out and do this Broker's price opinion.

The value that the agent gives to the lender in this BPO will be the amount they begin negotiation with.  Once the BPO is returned they work their formula and send us a statement telling us what they will need to net. The lender usually will accept about 5% to 15% below the BPO for an accepted offer.

MYTH #3- You can offer 30 cents to 50 cents on the dollar of what the listed price is.

TRUTH- The lender will take a small discount off of the value of the BPO usually right below market value.

The starting point in the negotiations on a short sale offer is not the list price. You must check to see how much the owner owes to the lender by pulling up the tax rolls. If a Lis Pendens has been filed and the house is in pre foreclosure you will also have to take into consideration that there are other bills they most likely have not paid for that affect the sale of the property.

Those are:

• Second mortgages or home equity lines of credit

• Unpaid Property Taxes

• Unpaid HOA fees

• Title insurance

• Real Estate Agents' fees

• Related attorney's collection fees

All of these fees will have to be paid at the closing. Most likely the seller is not going to have all that money to bring to the table at closing. These figures are submitted to the lender because the lender will choose which closing fees they will approve and how much they will consider these fees to be reduced.

Once you determine how much the seller owes on their property you will have some idea as to how to structure your offer.

You must look at what is owed to the bank versus what the market value is; the list price. The lender is actually reducing the loan down to the market value which can be a reduction of up to 50% as many markets have dropped that much in the last couple of years.

When making an offer on a short sale you must have a lot of patience.  If you have a specific time frame that you need to be in a house in the near future trying to buy a short sale that is at the very beginning of the process and a BPO has not yet been done on the property then most likely would not be in your best interests to pursue the offer.

Mortgage Assistance Relief Services Disclosure

RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.  If you stop paying your mortgage, you could lose your home and damage your credit rating.  RE/MAX Alliance is not engaged in the practice of law nor gives legal or tax advice.  It is strongly recommended that you seek appropriate professional legal counsel and tax advice for any real estate transaction.

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Contact Donna Bigda, ABR, SRES, e-PRO, Realtor®, RE/MAX Alliance Licensed Realtor® in the State of Connecticut at 203-488-1641, ext. 214 to list your property for sale or to purchase a property in Branford, Guilford, Madison, East Haven, New Haven and the rest of shoreline area in New Haven County Connecticut.

If you're thinking about buying a home in Branford CT there are plenty of great buys in today's market and now is one of the best times to buy while interest rates remain low. For more information on Branford CT real estate homes or condos, see Branford CT real estate or sign up today to get access the hottest new listings here Branford CT homes and condos. 

Disclaimer:  All information provided by this author is strictly an opinion, is not guaranteed, may be based on information collected from several sources, which may or may not be deemed reliable at the time of researching this article and may be time sensitive.

Copyright © 2009 by Donna Bigda, All Rights Reserved ...*Short Sales in Branford Connecticut and New Haven County – Myths and Truths About Short Sale Offers - Part 5*

This series about Short Sales in Branford Connecticut and New Haven County continues as we further explore what happens when an offer has been made on a short sale listing.  This article is of important interest to buyers who are considering making offers on short sales.  As a buyer you should know what is included and your agent should understand and be able to follow the process of making a short sale offer.

To fully understand and be up to date about short sales in Branford Connecticut and New Haven County you may want to consider reading the other 3 parts of this series:

Short Sales In Branford Connecticut and New Haven County - An Alternative to Foreclosure - Part 1

Short Sales in Branford Connecticut and New Haven County - Do You Qualify? - Part 2

Short Sales in Branford Connecticut and New Haven County - What You Need To Know - Part 3

Let us suppose for this post that the seller understands what a short sale is, has met the qualification test, their Realtor has experience doing short sales and the seller and their Realtor have all the documents put together that are required by the lender.

Everything is now set to receive an offer from a buyer.  Your buyer's agent should know how to help you understand what the process is from both the seller and buyer side of the transaction in order to have a smooth transaction.

The primary and most important thing to know about the short sale is that the seller still owns the property and is the final decision maker on which offer will be accepted.  A seller has mortgaged their property and the note holder or the note servicer is the lender.  The bank is not the owner of the property.  While a Lis Pendens might have been recorded and foreclosure measure may have started until the property is sold at auction or on the courthouse steps, the owner of record is still on the town records.

A seller can consent to an offer from a buyer but since the offer will be less than what the seller owes, there has to also be approval by a third party to the offer.  The third party is the lender to whom the seller owes their mortgage to.

The property will be required by this third party lender to be sold in "as is" condition and approve all the fees associated on the closing side of the seller.

As the buyer it will be necessary for you to prepare a good presentation with your offer to the third party lender.  You agent will have all the required documents to prepare an Offer to Purchase along with any required short sale addendums.  You will need your lender's approval letter if you are obtaining financing for this purchase. 

Make certain you have been approved for your loan.  This means that you have filled out a loan application, your credit has been checked and you have furnished the required documents to your lender such as tax return and W-2's.  If your offer is accepted it is more than likely that the third party lender will require a closing with 3-4 weeks of their acceptance of the terms and the amount of the short sale pay off.

You are best served if you choose a mortgage company that deals with short sales and can get your loan through underwriting in the shortest amount of time.

The moment the third party lender approves your offer your earnest money deposit needs to be immediately placed into an escrow account.  If you are making your earnest money deposit with a personal check it may take 10 to 14 days for that check to clear so you might consider getting a cashier's check so there is not hold up at closing for funds that have not cleared yet.

You should submit a handwritten note along with your offer explaining to the third party lender why you would like to move into the home.  An example is the story of a single mom who was trying to get a home for her children and that the offer she made was the highest she could go.  She got the home even though there were multiple offers on the property.

Your agent should strengthen your offer with comparable sales in the area along with any other relevant supporting market documentation.

The next article of our Short Sales in Branford Connecticut and New Haven County Series will go over how to decide what to offer on a short sale, myths and truths about offer prices on short sales.

Mortgage Assistance Relief Services Disclosure

RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.  If you stop paying your mortgage, you could lose your home and damage your credit rating.  RE/MAX Alliance is not engaged in the practice of law nor gives legal or tax advice.  It is strongly recommended that you seek appropriate professional legal counsel and tax advice for any real estate transaction.

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The Short Sales in Branford Connecticut and New Haven County is a series of articles for buyers and sellers to gain a better understanding of what a short sale is and how to move forward with closing on a short sale. In order to be thoroughly familiar where we are in the series, please read Part 1 and Part 2.

Short Sales In Branford Connecticut and New Haven County - An Alternative to Foreclosure - Part 1

Short Sales in Branford Connecticut and New Haven County - Do You Qualify? - Part 2

You now know what a short sale is and you have passed the qualifying test outlined in the previous posts. Now here is what you need to do to put your short sale package together for your lender and your agent.

Your short sale package should be put together prior to listing your property with your agent. This will help your agent to process the short sale quickly and efficiently. This is an important step in the process because as soon as an offer is made on your property your short sale package must go along with that offer.

Don’t wait until you have an offer before you collect all the documents you need in your short sale package and risk losing a possible buyer by delaying the process.There is no getting around this process so take the time to prepare in advance.

Your first step in putting your short sale package together is to call your lender to tell them you are putting your house up for sale and to confirm who the lender is. Make sure the note holder or servicer is in fact the lender you are calling. Don’t just take a chance by sending out your short sale package to your lender and then discover that the note was sold to another lender. Save yourself some valuable time by confirming your lender. 

The second step requires that you write an authorization letter for your agent giving him/her permission to speak on your behalf to discuss with you lender the status of your loan, details and short sale offers. In addition this letter must include your name, property address and loan number along with your agent’s name and company. The letter must be dated since many lenders limit the time in which the authorization letter is valid and once that time has expired you will be required to write another authorization letter.

Listed below are the documents that may be required to present a complete financial package to your lender. It is better to be prepared with all of the documentation and send more than what is required than to submit and incomplete short sale package. Your agent will also be checking the package to make sure all the documents are in order. With the amount of files lenders receive they may not even look at incomplete packages.

Your authorization letter as defined above.

A handwritten hardship letter describing your hardship. This letter must be as persuasive as possible as it can make or break the sale and should explain all thecompelling reasons why it is necessary to sell your property as a short sale.

A completed and signed personal financial statement that your Realtor® has received from the lender. It is not uncommon for each lender to provide their own financial statement. It is not a difficult form to fill out and usually includes tow columns; an asset column to write in all of your income and a debt column for all of your expenses.

Tax returns for the previous two years for all the signers on the mortgage.

Employment pay stubs for the past twoh months for all the signers on the mortgage.

A signed copy of your listing agreement with your Realtor®; this will be provided by your agent.

After you put all of these documents together give them to your Realtor® who will then work on your short sale package to make all the necessary notations. Every document must have your loan number written on it.

Once you get an offer on your property you and your agent will prepare the rest of the package and that includes:

A fully executed purchase and sale agreement and all supporting documentation.

Written proof of the buyer's pre-approval to purchase the property or evidence of cash available (a current bank statement).

An estimated HUD-1 settlement statement certified by an escrow office listing all the fees as completely and accurately as possible. The lender will reference this closing statement in their approval of the expenses prior to accepting the buyer’s offer.

Along with your short sales package your agent should put together a sales package. This will include your current market value paperwork with supporting sales data showing the offer is reasonable.

Your agent can support this documentation with a short narrative about the market and market trends taking place in the immediate area and include materials such as newspaper articles and recent economic data. Documentation is better than conversation, This is one example where you can take all the bad news and work it in your favor.

The next article of our Short Sales in Branford Connecticut and New Haven County Series will discuss what happens after the offer and short sales package is sent to the lender. If you are considering buying a short sale property knowing what takes place after the lender receives
your offer will be beneficial to you.

Mortgage Assistance Relief Services Disclosure

RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.  If you stop paying your mortgage, you could lose your home and damage your credit rating.  RE/MAX Alliance is not engaged in the practice of law nor gives legal or tax advice.  It is strongly recommended that you seek appropriate professional legal counsel and tax advice for any real estate transaction.

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Contact Donna Bigda, ABR, SRES, e-PRO, Realtor®, RE/MAX Alliance Licensed Realtor® in the State of Connecticut at 203-488-1641, ext. 214 to list your property for sale or to purchase a property in Branford, Guilford, Madison, East Haven, New Haven and the rest of shoreline area in New Haven County Connecticut.

There are great buys in today's market and now is a great time to buy while interest rates are still low. For more information on Branford CT Real Estate and Homes For Sale contact Donna or call me directly at 203-488-1641, ext. 214. Beat other buyers to the home of your dreams. Sign up with no obligation at my Shoreline Home Finder Site.

Copyright © 2008 by Donna Bigda, All Rights Reserved ...*Short Sales in Branford Connecticut and New Haven County – What You Need To Know – Part 3*

This is Part 2 of our short sale series, "Short Sales In Branford Connecticut and New Haven County - Do You Qualify?  In our first article of this series Short Sales In Branford Connecticut and New Haven County - An Alternative to Foreclosure - Part 1 we learned what a short sale is.

If you own a home in Branford Connecticut and New Haven County, are behind on your mortgage payments or have found out that you owe more money to your lender than what a buyer is willing to pay for your home does not automatically mean you will be able to just sell your home for less than what is owed to your lender.

To qualify as a short sale, you must pass the Hardship Test and show just and provable reasons why you cannot keep your home any longer.

The Hardship Test - As you go through each of these questions examine your current situation to see if it will pass the hardship test.

• Did you lose your job since you bought the home?
• Haven you had an illness, injury or bad accident and could not work?
• Have you incurred new large medical bills since you bought the home?
• Have you been relocated to another city or state?
• Did your interest rates increase so much that it is now a hardship for you to pay your mortgage?

Now each situation is different.  Each short sale request is looked at individually.  Bottom line is you must be able to prove there is a hardship.

What is NOT a Hardship?

If you took all of the equity out of your home and are now in debt you are going to have a very tough time having that accepted as a hardship.  I would recommend doing whatever you can to keep your home.

If you bought your home at the height of the market and it is now worth less than what you paid for it that is not a hardship or reason to sell your home as a short sale in Branford Connecticut and New Haven County.

The Asset Test - Are there assets that you can liquidate to bring to closing when you sell your home short of what is owed to your lender?

• Do you have stocks and bonds?

 

• Do you have money in CD's and savings accounts?

 

• Do you have equity in other properties?

Your lender is not going to take all of the loss if you have any of these types of assets and not have you bring some money to the table at closing.  Your lender will only accept the short sale if you contribute to the loss as well.  You may however be able to negotiate the loss with your lender.

The Fraud Test - Did you commit fraud on your loan application for this property?  If you were not truthful and lied about anything on your loan applications like:

 

• Where you worked?

 

• What your assets were?

 

• How much money you were making?

Lenders have access to your original loan application and any untruths or lies are going to be checked out by the lender.  They will be matching up what you are saying now to what was said on your original application when you applied for the loan.  If there are any big differences then you better have a very good explanation of why the change.  An obvious reason would be a job loss.

If you committed fraud, I will not list your home as a Short Sale in Branford Connecticut and New Haven County because you will be required to turn in a short sale package to your lender which we will help you put together along with an offer thereby exposing you to fraud and that can have serious legal implications to you.

The next article in this series of Short Sales in Branford Connecticut and New Haven County will cover the documents that are required in the short sale package. 

Mortgage Assistance Relief Services Disclosure

RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.  If you stop paying your mortgage, you could lose your home and damage your credit rating.  RE/MAX Alliance is not engaged in the practice of law nor gives legal or tax advice.  It is strongly recommended that you seek appropriate professional legal counsel and tax advice for any real estate transaction.

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Contact Donna Bigda, ABR, SRES, e-PRO, Realtor®, RE/MAX Alliance Licensed Realtor® in the State of Connecticut at 203-488-1641, ext. 214 to list your property for sale or to purchase a property in Branford, Guilford, Madison, East Haven, New Haven and the rest of shoreline area in New Haven County Connecticut.

If you're thinking about buying a home in Branford CT there are plenty of great buys in today's market and now is one of the best times to buy while interest rates remain low. For more information on Branford CT real estate homes or condos, see Branford CT real estate or sign up today to get access the hottest new listings here Branford CT homes and condos. 

Disclaimer:  All information provided by this author is strictly an opinion, is not guaranteed, may be based on information collected from several sources, which may or may not be deemed reliable at the time of researching this article and may be time sensitive.

Copyright © 2008 by Donna Bigda, All Rights Reserved ...*Short Sales in Branford Connecticut and New Haven County - Do You Qualify? - Part 2*

In recent months we are hearing more and more about the Conneticut foreclosure market on the news, at work and from family and friends. 

Too many Branford Connecticut and New Haven County homeowners are finding themselves in financial distress and unable to make their mortgage payments  At the same time the decline in home prices are leaving them with little or no equity in homes that are now worth less than what is owed on the property.

An alternative that homeowners are unaware of who need to sell but owe more than their home is worth or facing foreclosure is a short sale.

What is a short sale?  A short sale is the sale of a home negotiated with a bank or mortgage compnay to accept less than what is owed on the property. For instance you may  have a mortgage on your home of $350,000 but in today's market the current market value is only $325,000 based on the recent sales in the  neighborhood.  The lender must agree to take less than what is currently owed for it to be a short sale.

A lender's decision to do a short sale depends on a number of factors and criteria.  While your home may fall into this category it is the lender who determines what they need to move forward with the short sale process.

If you are in a situation where you need to sell and owe more than your home is worth or have been late with your mortgage payments and may face foreclosure proceedings, the first step is to contact your attorney and financial advisor.  They will help you understand the short sale process and any possible risks involved. 

You 'll be ahead of the game if you start now instead of waiting unitil it's too late. 

Disclaimer: This post is not intended to be or to provide legal advice. We recommend that you speak to your attorney and your tax accountant regarding specifics and to find out if this is the best option for you in your situation.

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Contact Donna Bigda, ABR, SRES, e-PRO, Realtor®, RE/MAX Alliance Licensed Realtor® in the State of Connecticut at 203-488-1641, ext. 214 to list your property for sale or to purchase a property in Branford, Guilford, Madison, East Haven, New Haven and the rest of shoreline area in New Haven County Connecticut.

If you're thinking about buying a home in Branford CT there are plenty of great buys in today's market and now is one of the best times to buy while interest rates remain low. For more information on Branford CT real estate homes or condos, see Branford CT real estate or sign up today to get access the hottest new listings here Branford CT homes and condos.

Mortgage Assistance Relief Services Disclosure

RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.  If you stop paying your mortgage, you could lose your home and damage your credit rating.  RE/MAX Alliance is not engaged in the practice of law nor gives legal or tax advice.  It is strongly recommended that you seek appropriate professional legal counsel and tax advice for any real estate transaction.