Can A Lender Profit From A Short Sale?

Myrtle Beach Short SaleMyrtle Beach Short Sale – Is It A Good Fit For a Mortgage Holder?

With the rising number of Myrtle Beach foreclosures happening all across Horry County, Myrtle Beach homeowners are seeking effective ways to avoid the whole depressing situation. However, it is not just the Myrtle Beach homeowner that is affected by this trying situation with Myrtle Beach foreclosures, but the mortgage holder that has to bear the brunt of these changes in the local real estate economy. There are ways to combat these unfortunate situations and a Myrtle Beach short sale is one solution.

A Myrtle Beach short sale refers to the situation where a Myrtle Beach homeowner sells their property at a reduced price – a price that is less than what is owed to the mortgage holder. The goal of a Myrtle Beach short sale is to avoid foreclosure entirely and save the cost and expense of a full blown Myrtle Beach foreclosure. In many instances, not only will the Myrtle Beach homeowner profit by a Myrtle Beach short sale but also the mortgage holder. The mortgage holder can make up for losses even if the Myrtle Beach short sale does not cover the balance due and save the money, time and labor of going through a Myrtle Beach foreclosure.

Myrtle Beach real estate foreclosures and auctions are a huge pain to the lender at best. In many cases the mortgage holder will try and make a successful closing on the Myrtle Beach property only to be disappointed when there are insufficient bids at the auction of the foreclosed property. In some instances the Myrtle Beach property may not sell at all and the mortgage holder will suffer major losses when the property is left to just sit empty. This is why the mortgage holder will agree to a Myrtle Beach short sale to minimize their losses in the short term.

How Lenders Benefit From A Myrtle Beach Short Sale

The major advantage to the mortgage holder is that they are free from the risk of a potential un-salable Myrtle Beach property. In many instances a homeowner that is facing foreclosure will do considerable damage to a Myrtle Beach property if they are forced to evacuate the home. They do this by removing such items as ceiling fans, cabinets and other items they feel they have a right to remove. With a Myrtle Beach short sale, the homeowner is still occupying the home and will leave these items in tact while attempting to receive a good offer. A property that is run down and in an un-salable condition is of no use to the mortgage holder and is a liability on their financial statements.

Then there is the lengthy and expensive Myrtle Beach foreclosure process. In many instances a foreclosed home will go to auction where the offer for the property is considerably less than would be expected with a Myrtle Beach short sale. With a Myrtle Beach short sale the mortgage holder has an easy option which ensures the property will be given a good evaluation. The mortgage holder does not have the expense of any repairs or renovations they might incur should the property go to auction. They also save the expense of marketing the Myrtle Beach short sale property themselves. The Myrtle Beach homeowner works with a Myrtle Beach real estate agents to list the home on the local market and is available to potential buyers to view the Myrtle Beach property. All of this saves the bank the time and expense of bringing the property up to current market value and negotiating with potential buyers.

If you are a Myrtle Beach homeowner that is considering selling your home to reduce your debt and not face the possibility of a foreclosure, you will want to call a Myrtle Beach real estate agent to discuss your options. You will be surprised at the options that are open to you.

The JP Shorts Sales Team is experienced in the Myrtle Beach short sale process. They have worked with local mortgage holders and can assist with finding a buyer at a price that will satisfy both your mortgage holder and you.

No need to be afraid of the Myrtle Beach short sale process, call us today for peace of mind.

Jerry Pinkas Real Estate Team
854 Frontage Road West, Myrtle Beach, SC 29577
(843) 839-9870
‎homeguidemyrtlebeach.com

Selling at a Loss: Short Sales Explained

Myrtle Beach Real Estate Agent Helps With Short SaleSo many families in the Myrtle Beach have faced situations over the last few years where it is better to cut your losses and get out of Dodge. We all invest a lot of ourselves in our homes and the loss of a home can be devastating. This is the reason that many home owners wait until it is almost too late when deciding to sell. If you are considering downsizing due to out-of-control costs or if you are in a position where you have to sell your home, you will want to be sure and enlist the help of a Myrtle Beach Real Estate agent. Look for an agent who has experience in short sales and can sympathize with your situation.

If your Myrtle Beach home is currently worth less than what you owe the mortgage company, then a Myrtle Beach real estate agent will be familiar with all the procedures and red tape and will be in a position to guide you through the many aspects of negotiating a short sale. You have probably heard the term “short sale” many times. It simply refers to the situation where the current Myrtle Beach market value of your property is less than what you owe – causing a sale that is “short” of what you owe.

Due to past financial practices in the banking industry, most of the housing market in the United States has suffered a drastic decrease in the value of existing homes. Fortunately, most of these practices have been rectified and the industry is reporting a light at the end of the tunnel so to speak. Existing home sales have increased and the inventory of homes is on the decline.

Many home owners are not in a position to take advantage of the lowest interest rates in recent mortgage history. Combine that with the increase in food and gas prices and it is impossible to stay within your budget and keep your current home. If you are considering a short sale, you need to understand that this is different than selling your home under normal circumstances.

Differences Between a Myrtle Beach Short Sale and a Conventional Sale

In many instances with a conventional sale, the mortgage holder won’t even know the home is on the market until they lawyer calls for a pay off balance on the mortgage. With a short sale, the mortgage company has to be in on the sale from the beginning. There is also considerable more paperwork with a short sale than a conventional sale and this is where a Myrtle Beach real estate agent can be a big asset.

The first thing you must do in a short sale is give your mortgage holder permission, in writing, to communicate with your Myrtle Beach real estate agent. Next you will need to document all of the reasons you can no longer pay the monthly mortgage on your home. This is referred to as “proving hardship” and you will need to include bank statements, proof of income such as W-2’s, credit card and other bills.

Keep in mind that the statement of hardship does not relieve you the homeowner of the responsibility for the debt. It is up to the lender to determine if they will absolve any remaining balance. Your attorney can ask the mortgage holder to “forgive” the balance. Many lenders will accept a short sale as an alternative to foreclosure to avoid having yet another home on their inventory and avoid the expense associated with a foreclosure.

Many homeowners don’t realize that if a mortgage company has too many foreclosed homes on their books they can jeopardize any future loans from being insured. This is a huge incentive for the bank to cooperate with a short sale.

Even if the debt is “forgiven” a short sale will still affect your credit rating. However, the hit to your credit is usually not as great as a foreclosure. The mortgage company is required to issue a 1099 for the amount “forgiven.” This may cause an adverse affect on your tax return. Currently, the federal government is not taxing the difference, however, this could change by the end of 2012 when the law expires.

As with other areas in your life, compromise and patience will go a long way when working with your lender on a short sale. This type of sale usually takes considerably longer than a conventional sale and finding a buyer that is also patient can be difficult. By working with a Myrtle Beach real estate agent, you can drastically cut down on the length of time this takes.

Here is what one of our customers had to say:

“Jerry and his team did a fantastic job of short selling our condo for us. We had an offer is less than 2 months and the process with the bank went flawlessly. Everything they said they’d do, they did. We’d like to sincerely thank Jerry and his team for all they did for us and helping us to move forward. We would highly recommend him and his team without any hesitation.” Dave & Ruth Buell

We would love to be our Myrtle Beach Real Estate Agent of choice! We can help.

Jerry Pinkas Real Estate Team
854 Frontage Road West, Myrtle Beach, SC 29577
(843) 839-9870 ‎
homeguidemyrtlebeach.com

 

What Do You Need To Know About Short Sales

Myrtle Beach Short Sales HelpMyrtle Beach short sales used to be regarded as a bit of a no-no to eliminate home mortgage obligations, however today with the housing uncertainty and the present economic challenges, they are once again not only more accepted , but happening more often. There are plenty of property owners who have discovered the exact help they will need to stay in decent position with the financial institution as well as rescue their credit rating by doing a Myrtle Beach short sale. This takes place when property foreclosure is upon you and impending . However before you plunge into it, let’s learn all we can regarding this so that you can make the best and knowledgeable selection before turning to the government for the choice of short sales.

Conventional Myrtle Beach Short Sales

Loan companies tended to be incredibly slow and really reluctant years ago to possibly consent to a short sale as an option to property foreclosure . The main reason was simply because the general thinking was that the damage to the financial institution could be much deeper . But new research is currently showing that the damage to the financial institution may actually be much lower , once the mortgage loan has gone into default, by getting a Myrtle Beach Short Sale solution . Utilizing this new information available , most lenders tend to be prepared to assist their borrowers who have hit financially distressed times.

By using conventional short sales, all of the power of agreement is retained by the financial institution . They will certainly state there is a exact set of requirements that affect this acceptance ; the ultimate decision rests with them. Many lenders need to see the borrower undergo each and every means available to take care of the home mortgage in other ways before agreeing to approve a Myrtle Beach Short Sale. Still , the procedure will take a very long time .

HAFA Myrtle Beach Short Sales

Owners who are really hard pressed with their mortgage loan financial obligation will undoubtedly be relieved to find out that there is additional help from the us government to assist them . In recent years , HAFA was created to assist these homeowners get their short sales approved . HAFA is known as The Home Affordable Foreclosure Alternatives procedure . HAFA criteria standards are not as strict as conventional short sale avenues , but one of the prerequisites is that the property be occupied for the past 12-month period and have a mortgage loan which was secured prior to January 1, 2009. HAFA furthermore makes it necessary that the home be declared underwater, which means that the potential selling value of the home is below what is in fact payable on the mortgage loan . The HAFA program offers guidance and tips to the troubled borrower from the Department of Urban Housing and Development mortgage loan debt counselors . It may also provide guidance in the chance to receive up to $3000 to assist with relocation and also other help needed to secure a mortgage in the future .

Contact us whenever we can help you understand Myrtle Beach short sales better. We’re informed about this and have helped numerous individuals previously to have the peace of mind when looking for this alternative to home foreclosure!

JP Short Sales Team
604 N. 27th Ave WestMyrtle Beach, SC 29577
843-839-9870
myrtlebeachshortsalesteam.com

Short Sales Have New Guidelines

Myrtle Beach Short Sales Upside downMillions of Americans now find themselves in a situation where they owe more on their mortgage than their homes are worth. The years of 2011-2012 have become dubbed as “the years of short sales.” In the first 6 months of 2012 alone, there were almost 39,000 short sales completed by Fannie Mae.

The Federal Housing Finance Agency has very recently announced that there will be new guidelines for mortgage lenders. All programs for short sales will be combined into one program, making it more streamlined. These new rules will let homeowners see much more easily if they qualify for a short sale, and it will allow lenders to have much more flexibility in qualifying people for a short sale.

Highlights Of The New Short Sales Guidelines

Homeowners with mortgages from Freddie Mack or Fannie Mae can do a short sale, even when they are current on their mortgage, as long as they meet the criteria for hardships such as the death of a borrower, divorce, illness or disability or employment transfer.

At closing, homeowners will have the option of making a financial contribution in exchange for not being pursued by the lender for a judgment of deficiency later.

All military personnel who must relocate are eligible for short sale, and under no obligation to financial contribution in order to cover the difference of the sale price of their house and the balance owed.

In previous times, the lenders would often try to negotiate with the homeowner for a higher payment. Under the new guidelines, any subordinate-lien payments must be limited to $6000.00.

Homeowners can receive as much as $3000.00 in relocation assistance in some special circumstances.

Guidelines For Lenders

  • According to the FHFA, lenders must:
  • Respond to the short sale offer within 30 days
  • Provide the borrower with weekly updates
  • Give the borrower a final decision within 60 days

This consolidated short sale program has created guidelines that will certainly make it easier and smoother for homeowners who have to face the possibility of short selling their home.

JP Short Sales Team
604 N. 27th Ave Myrtle Beach, SC 29577‎
843-839-9870
myrtlebeachshortsaleteam.com

Your Myrtle Beach Short Sales Team

 

FAQ’s About Short Sales

short salesfaqIf you’ve been around the real estate world at all, or even listened to TV and radio commercials, you’ve probably heard about short sales. They seem to be a big commodity in today’s market, yet many buyers and sellers often wonder what it really means and how the short sale process takes place. Here are some FAQ’s that will answer some of the most common questions.

Exactly What Is A Short Sale?

A short sale happens when a home is sold for less than the existing amount of the loan. If the lender accepts a payoff that is discounted in order to satisfy the debt owed on the loan, then a short sale happens. Almost always, the seller will need to prove that he has fallen on hard times and cannot pay the full amount of the loan.

How Does A Foreclosure Differ From A Short Sale?

The bank owns a foreclosure and has most likely already foreclosed on the property, whereas in a short sale, the property is still owned by a struggling owner who is asking if the lender will be willing to take a discounted payoff of the loan.

Are Short Sales Always Heavily Discounted When Sold?

No. Banks decide the selling price by getting the property appraised. Almost always, the bank will not accept an offer, which is more than 10% below the appraisal value.

Why Do Short Sales Take A Long Time?

During a normal real estate transaction, the deal is closed once the buyer and seller agree to all terms and draw up a contract for the purchase. However, in a short sale, there is a bit of a lengthy process of determining the property’s fair market value, as well as the process that determines if the seller can qualify for a short sale.

Who Pays The Real Estate Agent’s Commission And Seller’s Closing Cost?

This is usually paid by the current lender and includes, commissions, closing costs and any back taxes and liens.

Does The Seller Have To Pay Tax On The Debt That Has Been Forgiven?

It’s important to discuss this with an accountant, but generally the lender will declare a loss to the IRS as bad debt for the deficiency. The borrower will usually receive a 1099 form from the lender representing the income gain that comes from the waiver of indebtedness. It will be necessary for the seller to account for this income. The Mortgage Debt Relief Act of 2007 protects the primary residence of borrowers who are short selling their homes. This happens by allowing much of the reported income to be excluded. Insolvency may be declared on a borrower’s secondary investment property and this would allow the owner to also exclude that income as well.

For more information on Short Sales and how they might affect you, call us today at Jerry Pinkas Real Estate Experts. We have the answers you’re looking for!

JP Short Sales Team
604 N. 27th Ave Myrtle Beach, SC 29577‎
843-839-9870
myrtlebeachshortsaleteam.com

Things To Know Before Buying Myrtle Beach Short Sale

Myrtle Beach short saleMany people today are using the internet to find “hot” deals in the Myrtle Beach short sale market. When you think you have spotted that perfect Myrtle Beach short sale that really interests you, take a minute to step away from the computer and call a Myrtle Beach real estate agent. They can research the sale and make sure it is truly a good buy.

In many instances a short sale will not close and in some markets it is as few as 1 in 10. There are several factors that much take place, including the approval of the lender, before the sale can actually go through.

How is a Myrtle Beach short sale compared?

Most real estate agents will price a short sale below the comparable sales, however, they are in line with pending sales. What is the reason? Short sales will usually take from 3 to 4 months to close. At the time of closing the pending sale will be compared to the comparable sales on the market.

Many Myrtle Beach short sales are priced so ridiculously low that the bank would never accept the sales price. What the seller is looking for is multiple offers. To expect your offer to be accepted by the bank, the offer needs to be close to market value. If you are not in a position to pay more than the lowball listing price, you really should pass.

Research mortgage amounts and number of loans

Ask your Myrtle Beach real estate agent to find out how much is owed and the total number of loans that are on record for the short sale. In these situations a second or third mortgage holder will receive pennies on the dollar compared to the primary mortgage holder.

There are some lending institutions that have a reputation for being difficult to work with. Your agent is aware of these lenders and can give you good advice on how to handle certain mortgage holders.

A good rule of thumb is if your offer is 20 to 30 percent of the amount owed, it is unlikely the mortgage holders will negotiate.

The Myrtle Beach short sale agent’s track record

 

Be leery of an agent who is hired to market a short sale and has never closed a short sale. Why? It is the responsibility of the listing agent to submit the bid to the mortgage holder and then work to negotiate a price. Your agent cannot talk directly to the bank.

You need to ask yourself if you want to risk losing the purchase of your short sale because the listing agent lacked experience in the short sale arena.

Seller qualifications in a short sale

Request that your agent check with the listing agent for a complete short sale package. A Myrtle Beach short sale package should include:

  • Tax returns
  • Income verification such as W-2
  • Check stubs
  • A complete financial statement
  • Statements from the bank
  • Hardship letter as to why a short sale is needed

You don’t want your short sale delayed because the seller is refusing to cooperate with the bank. You will not be in a position to see these papers but you need to know they have been submitted to the bank.

Offers received

Myrtle Beach homes that are listed under market value will usually receive many offers. The listing agent is not expected to disclose the exact terms of the offers but you can know who many offers have been received. In many instances the following scenario will take place:

  1. The Myrtle Beach short sale is listed and the first offer is slightly below the list price.
  2. The second offer will come in at the actual list price.
  3. The third offer will be above the list price by a small margin.
  4. Then the fourth and subsequent offers will be higher.

Your goal should be to be in a position to make an offer that is better than the competition but still below market value or you are wasting your time.

Short sale procedures

Realtors are held to a code of ethics which requires them to treat everyone fairly, however, not every agent is a Realtor. In some instances a short sale agent may make the decision to only submit the first offer to the lending institution.

Withholding these offers is a violation of the relationship between the seller and the listing agent but it does happen. The seller should receive the highest price for their home. Keep in mind that even if your offer is submitted to the lender, you can still lose the sale if another buyer outbids you.

Contact JP Real Estate Agents when you are looking for a good buy on a short sale. They can help you avoid costly mistakes.

JP Short Sales Team
604 N. 27th Ave Myrtle Beach, SC 29577‎
843-839-9870

myrtlebeachshortsaleteam.com