There is a big difference between a short sale specialist and a short sale wanna be. Even in the affluent areas of the country including, Bucks County , short sales are effecting the market in a huge way. This is part two in a series of articles I will be writing to help you navigate the murky waters of a short sale. Click on Part One for a refresher.
If you live in the Bucks County, PA or the Philadelphia area, and you are a home owner in distress and looking for help but don't know where to turn and don't know who to trust, PAY ATTENTION, THIS IS FOR YOU!
Who should I call for help first?
In Bucks County,Pennsylvania your lender is required to send you an Act 91 letter. This letter is the first formal notice provided by your lender that you are at risk of foreclosure. Included in the letter is a list of state approved credit counselors who will help you and answer your questions, free of charge. Companies such as American Financial Counseling Services, Inc. (AFCS) which is a PA State Affiliated Non-Profit Agency are very respectable and knowledgeable. They have been through many training courses specifically related to dealing with distressed sellers. They not only have the ability to refer you to an experienced real estate agent but also will be able to help you rebuild your credit and answer any possible Bankruptcy questions you may have. These state certified companies usually have attorneys on staff who can also help you if needed. Be sure to meet with them and ask for their help! They very well may provide you with options that allow you to stay in your home and your initial consultation is free so you have nothing to lose.
Why, as a licensed real estate agent and realtor(r), would I suggest contacting an investment company or an REI club regarding your short sale situation?
It's simple really, it's safe to say the president of a well known REI (real estate investment) club will have contacts and knowledge in buying and selling all kinds of distressed properties. It is quite possible he/she will know more about the subject than your average local real estate agent who may never have completed any type of distressed real estate sale, let alone, a short sale transaction. He/She may even know someone who may want to buy your home for cash. That is what investors do!
Shouldn't I be wary of investors who "Bottom Feed" and take advantage of unsuspecting and uneducated (in Real Estate) Sellers?
Well, yes and no. Yes, you should be wary of anyone you are entrusting with your short sale, including investors. But, every town has investors who operate with high morals and ethics and they very well may have a real estate license themselves they just don't operate and use it like a "traditional agent". Investments are their game and they stick to what they know. Plus, large national companies like 1-800-SELL-NOW do not affiliate themselves with just any investor, they make sure their brand is represented by professionals who have integrity and knowledge of distressed real estate. They even provide specific training which is usually better than what is offered by the NAR (National Association of Realtors).
Warning: If you are going to call a local and unknown "We Buy Houses" investment company who use those cheap looking home made signs, be very careful and tread lightly as there are a lot of crooks out there. Think about it, if they do not care enough or do not have enough money to, at least, have a professional looking sign, how professional do you think they will be with everything else they do? Larger National Companies have much more at stake and will more than likely be a safer bet.
Problem is even those who you "think" would have your best interest in mind may not be able to be trusted these days.
Recently even attorney's, real estate agents and mortgage companies have been accused of committing fraud. A short sale is a very tricky transaction and should only be handled by experienced professionals who can answer your questions and provide you with resources and testimonials.
Investigations and arrests both locally and nationally are popping up all over. Just do a quick goggle news search on foreclosure fraud and you will quickly get a sense of the murky waters you are in. You need to be sure you are not knowingly or unknowingly committing or about to be a victim of fraud.
You'll want to be sure you interview more than one professional and ask the following questions before moving forward:
1. How Many short sale transactions have you closed?
2. What is your short sale closing ratio?
3. What is your average time from listing to closing?
4. What is the average commission you'll accept from the bank?
5. How many short sale files are you currently working on?
6. Do you negotiate the short sales yourself or do you outsource the negotiations to a third party?
7. Do you have testimonials and a list of past clients I can call to ask them about your services?
8. Can you provide me with a list of experienced short sale attorneys who you feel comfortable referring me to?
9. Can you provide me with a list of experienced Bankruptcy attorneys so I can weigh my Bankruptcy rights and options?
10. How will a short sale affect my credit compared to a bankruptcy, foreclosure or a deed-in-lieu-of foreclosure?
11. Will I be able to stay in my home by renting it back from the buyer?
12. Will I receive any proceeds derived from the sale of my home?
13. Will I have to pay taxes on the difference between what I owe and what the house sells for?
14. Will I have any future financial obligations to the lender after the short sale transaction closes?
15. How long will it take for you to find a buyer?
16. Do I have to pay any money or commissions in order to sell my home in a short sale situation?
17. Can you provide me with a list of experienced CPA's that specialize in cancellation of debt and the tax consequences of short sales?
18. Will I have to sign a promissory note or worry about the bank going after me for a deficiency judgement?