1 Short Sale Basics Realtors Edition

We save homes one at

a time.

”

● What Is The Short Sale Process

● Requirements For Any Successful Short Sale ● Transaction

● What Will The Servicer Allow or Not Allow

● New Opportunities For You In Short Sale ● Listings & Closings

● New HAFA Program

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WHAT IS A SHORT SALE?

Short Sale Scenario:Home Is Worth $100,000 Mortgage is $110,000 Agent Lists It For $100,000

And Sells It For $100,000 After Commission And Closing

Costs Of 8%, There Is $92,000 To Satisfy Mortgage,

Servicer Discounts Mortgage $18,000.

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Short Sale Scenario:Home Is Worth $100,000 Mortgage is $110,000 Agent Lists It For $100,000

And Sells It For $100,000 After Commission And Closing

Costs Of 8%, There Is $92,000 To Satisfy Mortgage,

Servicer Discounts Mortgage $18,000.

WHAT IS A FORECLOSURE?

Foreclosure Scenario:

● Home Is Worth $100,000 ● Mortgage is $110,000 ● 9 Months To Foreclose & Resale● Legal Fees $1,500 ● Lost Interest $4,500● Taxes, Insurance, Maintenance, Utilities

and Secure the Property -$3,000● Commissions & Closing Costs $8,000● Servicer Losses $27,000 +

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FORECLOSURE LOSS● Mortgage Servicers Are Trying To Reduce REO Inventory And Losses Due To Foreclosure

● Average Foreclosure Loss $50,000 or More

● Servicers Want to Double Short Sales.

● Opportunities for Servicer, Homeowner and Agent.

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LISTING A SHORT SALE PROPERTY

● Servicer Does Not Own The Property And Does Not Tell You What To List Property For. You And Homeowner Determine The Price.

● Our Short Sale Advisors can help with pricing the property.

● List Property Subject To Short Sale Approval And Be Familiar With Your Local MLS Rules.

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Start gathering the information on your listing appointment

SHORT SALE REQUIREMENTS

Homeowner Qualifies For A Short Sale With A Complete Short Sale Package

● Listing Agreement● 2 Years Tax Returns (Signed)● 2 Months Recent Pay Check Stubs w/YTD● 2 Months Recent Bank Statements w/Bank

Logo● Mortgage Statement(s)● Hardship Letter● Financial Worksheet● Authorization Filled Out and Signed/Dated● HOA Statement, if applicable● Order Payoffs on Mortgages 7

WHO DETERMINES THE OFFER FOR LENDER?

● You And The Homeowner Negotiate The Best Possible Offer for the Lender.

● Homeowner Should Reject Or Counter Unreasonable Offers.

● Servicer Expects: Fair Market Value.

● Have Homeowner Accept The Offer “Subject To Short Sale Approval.”

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WHO NEGOTIATES WITH THE SERVICER

● Servicer and weRshortsales.com have the same Goal- NO Foreclosure

● Our staff will negotiate all loans with the servicers.

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SUBMITTING THE OFFER ● Complete Package (email to:

packets@weRshortsales.com)● Signed Offer● Buyers Pre-approval Letter

Proof of cash on hand –if a cash offer

● Listing Agreement● Short Sale Package

● 2 Years Signed Tax Returns (signed)● 2 Months Recent Pay Check Stubs● (if self-employed a Profit & Loss is required)● 2 Months Recent Bank Statements● Hardship Letter● Financial Worksheet● Authorization Signed & Dated● Include Comps /Pictures/Articles/MLS Sheet

Do Not Leave Anything Out!

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FEES NOT PAID

The Following Fees will generally Not Be Paid

● Repairs ** Property is Sold “AS IS”**● Inspection Fees, Pest Inspection Fees, Pest

Repairs● Fees Normally Paid by the Buyer Including Tax

Service Fees● Survey Costs● Junk Fees● Utility Bills/Unless a Lien on The Property● Buyer Closing Costs in Excess of 3%

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FEES THEY WILL CONSIDER PAYING

● Property Taxes● Owners Title Policy● County Documentary Transfer Tax (if

applicable)● Settlement Fees/Closing Fee● Commission **May Be

Reduced**Negotiable● Junior Lien Holders **Must Be Negotiated

For Release**

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● Junior Liens May Accept $1,000-5,000

To Release The Property ~

● They May Not Forgive The Debt ~~

● They May Ask The Seller To Sign Unsecured Promissory Note

JUNIOR OR 2ND LIENS

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ANOTHER OFFER – MI COMPANY

What do you do when another offer comes in? Do we resend the entire package Do we have the homeowner accept the new offer Depending on the Servicer up to 3 offers can be

submitted at one time.

What happens if there is an MI (mortgage insurance) company involved? This take longer to get approved Can I call the MI company

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GETTING YOUR SHORT SALE APPROVED

● We Need To Demonstrate To The Servicer That It Makes Sense To Approve The Sale.

● We Provide The Documentation Needed To Justify Their Decision.

● Help The Servicer Understand Your Market, The Property And It’s Condition So They Can Make The Right Decision.

● Have Pictures And Comparables.

● We make Servicer Aware Of Your Marketing ● Efforts And Pricing History.

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SERVICER’S PERSPECTIVE

● Servicer Expects Fair Market Value.● It Is The Duty of The Servicer To

Obtain The Highest Possible Net Amount.

● Loss Mitigation Departments Get Evaluated Based On Minimizing Their Losses.

● Servicer May Ask Us To Reduce Commissions.

● Servicer Must Document Why They Are Discounting The Loan.

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WHY SO LONG FOR AN ANSWER?

● Servicer Needs To Verify The Value Of The Property

● Servicer Will Order An Appraisal

● Servicer Will Order A BPO

● Servicer Needs To Get Approval, Based On How Big The Discounted Amount Would Be

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FORECLOSURE TIME LINE HASNOT STOPPED!

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IMPORTANT!

.

Let WeRshortsales.com know when there is a foreclosure or a sale date !

The Foreclosure Process will continue while the

property is listed and even during the

negotiations of a short sale. We will ask for a

postponement of the foreclosure sale if we have

an offer pending. Do not assume that the

LENDER or weRshortsales.com is aware of the

foreclosure sale!

POSSIBLE TAX CONSEQUENCES

There May Be A Tax Liability Created By Either A Foreclosure Or A Short Sale.

Have The Homeowner Talk To Their Tax Advisor.

Seller Receives a 1099 For Discounted Amount.

File Form 982 If They Are Insolvent

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BENEFITS TO THE SELLERS

Homeowner Does Not Have A Foreclosure

Homeowner Avoids The Humiliation Of A Public Sale.

Homeowner Completes Their Original Commitment With Integrity.

Possible Smaller Tax Liability.

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WHAT I HATE ABOUT SHORT SALES!!!

● Shorter Time Frame To Market Property Before Foreclosure Sale Date.

● Servicer Believes The Property Is Worth More.● Servicer Requiring Additional Information.● Lack Of Communication With The Servicer.● Length Of Time For Servicer To Approve● Unmotivated, Uncooperative Sellers.● Title Issues.● Servicer Wants To Limit Commissions.

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Too Many Liens

Value

3 REASONS YOU DON’T CLOSE

Ego

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THE GOOD NEWS!● Servicers Really Do Want To Participate

In More Short Sales.

● You Will Get Referrals From The Sellers.

● Sellers Really Do Need Your Help.

● The Servicers Have The Same Goal And We Are On The Same Team.

● We are here to help you through the short sale process.

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YOUR SOURCES OF BUSINESS

● WeRshortsales.com Assignments● Notice Of Defaults, Or Notice Of Lis

Pendens From County Recorder● FSBOs In Newspaper or Rentals or Expired

Listings● Get Referrals From Other Professionals,● Lenders, Title or Escrow, ● Organizations That You Belong To● Agents You Network With Around The

Country● Word Of Mouth● Consider Doing A Seminar At A Local

Library

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● Lenders Are Using Interior BPOs Or Appraisals to Set The Value

● Servicers Are Hiring and Provide Training To Their Loss Mitigation Specialists As Fast As They Can.

● All Servicers Have Publicly Stated That They Want To Double Their Number Of Short Sales.

PROCESS IMPROVEMENT

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CONTACT INFO

WeRshortsales.com

Ask For Short Sale Packets and Addendums for Each

Servicer

info@WeRshortsales.com

1-888-726-344026