Coldwell Banker Weir Manuel Facilitates Short Sales at No Cost to Sellers

Afraid you may lose your home to foreclosure? Your Coldwell Banker Weir Manuel Realtors trusted advisor may be able to turn things around for you with a "Short Sale."

A short sale is one where the proceeds of a sale of a home fall short of what you, the owner, still owe on the mortgage. Some lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed when you cannot make mortgage payments. And, there may be no out of pocket expenses to you.

You'll be able to pay off the loan for less than what you owe - and your lender, by accepting a short sale, can avoid a lengthy and costly foreclosure - making the best of a less-than-great situation but you must use a qualified real estate broker. Lenders will not accept short sales by owners

If your home is facing foreclosure, you're not alone. With more and more homes - especially luxury homes - still on the market, some homeowners may be afraid that foreclosure is a given. Not true! You need to speak to one of our Coldwell Banker Weir Manuel Certified Short Sale Experts today and see if your home qualifies for a short sale.

Your Coldwell Banker Weir Manuel Certified Short Sale Expert is trained to work with lenders, process the proper documentation, work out the details - in effect, to facilitate the entire transaction and take the worry off you!

Short Sale may be your last resort before foreclosure, so be sure to call our Certified Short Sale Expert today: Call Sue Falk at 248-824-2210 or email sfalk@cbweirmanuel.com.

What is a short sale? A primer

When the sale price of a home is not enough to cover the mortgage(s) on the home, the sale can only close if one of two things happen: either the sellers bring money to the closing or the sellers' lender agrees to take less than the amount owed. While in both situations, the sale price is "short", it is the second situation that is commonly referred to as a "short sale".

Perhaps the most important thing to keep in mind with respect to short sales is that a lender is not required to take less than the balance owed. Moreover, when the lender receives a request to consent to a short sale, the lender is not required to respond quickly or even at all. Because the approval of a short sale is wholly discretionary, a lender can ignore the request, reject the request, or approve the request subject to a whole list of conditions. If the lender approves the sale, in order for the transaction to proceed, the sellers and the buyers must agree to any conditions imposed by the lender.

Under what circumstances will a lender approve a short sale? There is no correct answer to that question. Different lenders apply different rules. Employees within the same lending institution may look at the same rule differently. Lenders themselves often change their rules from month-to-month or even week-to-week.

In a perfectly rational world, lenders would always approve a short sale in those instances where the proceeds that the lender will receive from the short sale exceed the amount that the lender would receive if it foreclosed the home and pursued the sellers for the shortfall. But even in the rational world, in order to make such an analysis, a lender must be comfortable that it has accurate information both as to the value of the home and the sellers' financial condition. Typically, much of the short sale process is focused on convincing a lender that it has accurate information and that based on this information, that short sale should be approved.

In some cases, a seller may accept multiple offers to purchase, making them all contingent upon approval by the seller's lender and the seller's approval of the lender's terms. While this practice is discouraged because of potential inherent risks to the seller in accepting multiple offers, it does occur. The buyer making the highest-cash offer or what that buyer may view as the best offer, may believe they are entitled by law to purchase the property. That is not the case. The lender can approve any offer based on numerous factors other than the offering price. There is no law requiring the lender to accept the highest or best offer in the eyes of a buyer.

Remember, there are few terms that regulate the terms of a home sale transaction; rather, the transaction is governed by the terms of the sales contract. Over the years, many terms have become so standard that many people assume that they are dictated by law, when in fact they are nothing more than typical contract terms for the purchase of a home. Often times the "conditions" that a lender imposes when it approves a short sale expressly alter some of these typical contract terms. It is therefore critical that these "conditions" be reviewed very carefully. Again, it is unlikely that a party will be able to get a lender to change any of these provisions; nonetheless, a party needs to understand these "conditions" when analyzing the transaction. For example, a buyer who has negotiated what he believes to be a great short sale price on a home should take into account the seller's expenses that he is being required to assume when comparing that transaction to a standard home purchase.

It is also likely that a short sale buyer will be purchasing a home that may need numerous repairs. A lender's conditions for approving a short sale typically provide that the buyer has no recourse in the event that there were misrepresentations made as to the condition of the home and/or material defects that the sellers did not disclose. Moreover, sellers who have been facing foreclosure for many months typically have not had the funds (or the desire) to properly maintain the property. A short sale buyer is well-advised to have the home carefully inspected.

Finally, the lender's approval of a short sale typically includes a provision which states that the lender can terminate the transaction for any number of reasons right up until the time of closing. For this reason, a short sale buyer is well-advised to keep his options open until the transaction is finally closed. A buyer with a moving truck in the driveway the day before closing will be in a very difficult positions if the transaction fails to close.

In the real world, a lender will never simply approve a short sale; instead, the lender will approve the shore sale subject to a whole list of conditions. Often the document setting forth the lender's "conditions" is longer than the purchase agreement itself. Keep in mind that this lender approval document is not "Boilerplate" and should be read carefully by both the buyer and the seller. While these "conditions" are seldom negotiable, buyers and sellers are well-advised to seek the assistance of counsel in order to clearly understand their rights and obligations should they choose to accept the lender's conditions.

Back to Previous Page