Realtor/Investor/Consultant FAQ’s:

• How do I know if a homeowner should do a short sale?

A – There are several factors that create circumstances in which a short sale becomes a person’s best option.  In short, if a property owner can evidence the fact that they cannot afford to make continued mortgage payments on their property and/or their property is worth less than the amount owed on it.  In those circumstances the owner usually will either need to short sale the property or potentially lose it to foreclosure.

• How can I increase my business volume by offering short sale services?

A – If you are a Realtor or a person considering offering your services as a  short sale negotiator then you are sitting on the verge of a very powerful and positive situation.

Powerful:  Approximately 4,000,000 households are facing some level of default on their homes across the country.  That doesn’t include the investors who are having trouble keeping their investment / commercial property mortgage payments current.  70% to 90% of those people who are struggling financially do not understand how beneficial a short sale could be for them. A large portion of the remaining percentage knows that a short sale could help, but they don’t know anyone with the knowledge and expertise needed to assist them.

Thus, there is a large volume of families in need of the assistance of well advised counselor!

Positive:  Each and every time you complete a successful short sale you will have not only made good money, but you will have helped a person or family avoid foreclosure and improve their financial situation.  There is noting quite so nice as having extremely grateful clients thanking you for making a positive difference in their lives!

• How do I market to homeowners who need a short sale?
  • This will be taught when you purchase your E-book.

• When do I need to file Form 982

A – Form 982 is an IRS tax document that pertains to financial insolvency.  In some cases, filing this form can significantly reduce any potential tax liability which could arise from a deed in lieu, short sale or foreclosure.  You should consult a tax professional before opting to file Form 982.

• When is a property, or property owner, eligible for a short sale?
  • Before this housing crisis, generally speaking, a property owner was only eligible for a short sale if they were experiencing hard economic times, were at least three months behind in mortgage payments, had no foreseeable chance of making their future mortgage payments, and had little or no equity in their property.

However, because of the current housing crisis short sale rules are rapidly changing. Nowadays, a property owner is eligible for a short sale if:-

-     The property owner is either behind in mortgage payments at lease one (1) month, OR, if they reasonably expect to not be able to afford their mortgage anymore in the immediate future.

-     The property owner is experiencing hard economic times and can’t afford to pay their FULL mortgage payment anymore.

-     If there is little or no equity in the property and/or if the mortgage amount is more than the property is worth.

• What liability does the property owner have when doing a short sale?
  • Generally speaking, the property owner has the same liability having a short sale negotiated as they do continuing with the pending foreclosure process. In almost all short sale cases, foreclosure is the only other option. Therefore, if the short sale negotiations are not successful the property will most likely continue on its current path towards foreclosure. However, if the short sale negotiations are successful, the property owner would have staved off foreclosure, salvaged their credit from the alternative, and hopefully will be free to walk away with no ongoing debt or responsibilities associated with the property. Many times the mortgage lenders will pursue the borrower for a deficiency judgment if the lender foreclosures, but will forgive the debt if a short sale is worked out. 

• Does the homeowner need to give you power of attorney to conduct the short sale?
  • Yes and No. You may request power of attorney so that you can more readily communicate with your client's lenders and other parties on their behalf. However, you can work around it if the homeowner will not give it. 

• Can I make a profit from negotiating short sales for my clients?
  • Yes! Banks will generally allow Realtors or Short Sale Consultants a fee of up to 5% of the purchase price. Therefore, whether you’re a Realtor or a Short Sale Consultant, you have the opportunity to receive this entire fee if you negotiate the short sale and find the buyer. If you negotiate the short sale and another Realtor or Consultant brings in the buyer you’ll have to give up a portion of your proceeds, but that amount will be determined by yourself and the other professional; either way you stand to make a nice living through negotiating and completing short sale deals.