Nuts and Bolts of Short Sales

In Part 5 of our short sale series we go back to the basics with a look at the nuts & bolts of short sales.

Nuts & Bolts:
• When it comes to home-equity lines of credit you need to correctly counsel your client: Short sales disqualify.

• Fooled into thinking that higher-end sales are more difficult? Think again. They are much easier (portfolio deals, no mortgage insurance, etc) and are on the rise – a win-win.

• Hardship letters: Don’t oversell; keep it short and to the point. Think Reader’s Digest.

• 1099’s: Tax season is fast approaching and all short sale and foreclosure clients will be receiving 1099’s. Stress to your client that this DOES NOT mean debt forgiveness. When it comes to negotiating/modifying these – don’t work outside your area of expertise. Do what you do best and pull in an expert.

• A good tool of the trade is to have your client sign an expectation letter up front. Lay out what you expect from them. Include that they will keep current on HOA payments. If they don’t, this becomes a personal debt and opens a whole new can of worms.

• Your best friend in short sales is email. DOCUMENT EVERYTHING! You’ll be surprised at what having a good e-paper trail can do for you.

• You may have gotten the run-around trying to find out who owns your clients loan. Your life just became a lot easier thanks to Fannie Mae Loan Lookup and Freddie Mac Loan Lookup.

Armed with an arsenal of info and tools thanks to the valuable input of Wendy Shaw, of The Russell Shaw Group and attorney Mark Windsor of Winsor Law Group, REALTORS are now left with the question: 2011 is going to be a high distressed year – what will you make of it?