Colorado Short Sale FAQ From Your Denver Short Sale Realtor
The Colorado Short Sale FAQ section on this website is designed to answer questions about your home and finances.
The reality of the situation is that American homeowners from all around the country are beginning to discover there are a lot of questions when it comes to handling short sales. In situations like this it is important to seek guidance from a local short sale specialist who can properly evaluate your potential short sale and help you come up with a viable solution.
Whether you are someone who just went through financial hardship, were recently laid off, went through a divorce, or lost a tenant, a short sale could be the right choice for you. However, this is not always the case and every situation is different.
As an experienced short sale realtor, I will assist you in providing straightforward insight in relation to your particular situation. I will thoroughly listen to your individual needs and give advice based on knowledge and past experience in handling short sale transactions. I will help you discover the truth, and I will separate facts from fiction as we get you back on the road to financial stability.
When a short sale seems like the best possible solution, I will guide you through the process of creating the proper strategy in relation to the sale of your home. I will assist you and answer any questions you may have. I will be there stride for stride through every phase of the short sale process.
Common Colorado Short Sale FAQ
A short sale means the amount from a sale does not meet the obligations of a loan or home mortgage. A short sale is a process that must be cleared and approved by your lenders in order to qualify.
In order to be eligible for a short sale, the homeowner(s) must face one of the predicaments below:
- Financial Dilemma
- Monthly Income Drop
- Money Insolvency
Among the most common such as job loss, a hardship might also involve business struggles; a family death; illness; job relocation; medical/emergency room bills; divorce; mortgage modification; property tax increase; lower income; divorce; and jail time.
A hardship letter is an essential element that pertains to the entire short sale process and greatly increases your odds of being considered for a short sale. Your lender will heavily weigh your letter into your short sale request. The letter should communicate your financial predicament in a realistic tone .It can be written by hand or typed You must clearly acknowledge in detail what your hardship is and how you have gone about dealing with it up until this point. All loan borrowers are required to hand sign and date the letter.
Lenders often prefer a short sale to foreclosure. In most situations, the loss banks take is significantly lower during a short sale transaction. Banks are in the lending business thus their primary initiative is to get back as much money as they can in as short of an amount of time possible.
Even though there are no regulations in place that prevent homeowners from going through with a full fledged short sale on their own terms and conditions, it is a common practice to seek the help of an experienced realtor when starting such an in-depth transaction. There is too much on the line for an individual with little to no experience to handle it on their own.
- Selecting an unqualified short sale realtor to guide you in the short sale process
- Over or under evaluating the property and its value
- Submitting an incomplete short sale package to lenders
- Taking an offer from someone who is not fully qualified
- Turning in multiple offers to the lender
- Having expectations that are beyond your means
Deficiencies that are tied to both foreclosures and short sales are viewed as debt forgiveness by the corresponding lenders. More importantly, they are also viewed as debt forgiveness by the IRS.
If you are a distressed homeowner, you should get in touch with an experienced tax advisor that will help guide you to debt forgiveness solutions and implications stemming from a short sale. Please be aware that a short sale typically brings a deficiency that is significantly lower than a full fledged mortgage foreclosure.
A deficiency is essentially the gap that exists between the overall amount from a sale and the loan requirements. For example, if a seller owes $300,000 to the bank upon the short sale being approved and the sale of the home returns only $225,000 as net proceeds, then the deficiency/gap is $75,000. There may be potential tax implications on the $75,000.
After either a short sale or foreclosure, the shorted lender may go to court in order to recover any money lost through the borrower’s transaction. When someone experiences a foreclosure, the opportunity to understand and speak with lenders in regard to the amount of deficiency can be rare and confusing.
In Denver, the lender is allowed seek a judgment and pursue a borrower by putting liens on property while also garnishing wages and back accounts.
Choosing to complete the entire short sale process as opposed to letting the home go to foreclosure allows the borrower to take over control and negotiate the existing deficiency amount. Additionally, the actual shortage is typically lower in a short sale than in a foreclosure because the property is sold with assistance from a short sale realtor for actual market value.
BPO is short for Broker’s Price Opinion and is identical to appraising the value of the property at hand. Lenders who are being shorted count on BPOs to come up with market evaluations and to ensure the property is going to be sold for a reasonable price.
Typically, a lender will grant a request for BPO from a third-party provider who then proceeds to recommend a local realtor to give an in depth market analysis of the current home along with images, pictures and property details. Lenders are required to provide a full appraisal that has to be completed by an approved and licensed appraiser to guarantee they have the most quantified valuation of the distressed property.
BPO serves as a fundamental point of focus when it comes to the short sale process. An appraisal, as opposed to a BPO, provides further details on the specifications of the property such as the condition and property details. A BPO is fairly biased and can be the deciding factor in a short sale.
We believe that each and every appraiser or agent should be present and met directly in person. The appraiser or agent should also provide supporting documents that lend to their credibility. Failure to do this could result in a short sale rejection based on delays in registering the short sale in the system.
Your short sale realtor should possess all the attributes of professionalism such as honesty, integrity and passion. They should have the track record and expert knowledge to deal with the transaction in a confident manner that will yield worthy results. A good amount of the knowledge in dealing with short sale transactions comes with first-hand life experience through various short sale transactions.
Homeowners who are contemplating the assistance of a short sale realtor should always ask for references and past results of performance to prove their credibility. There is too much at stake to put your financial wellness at risk to a short sale provider who is not qualified with experience.
How Do I Get Started?
If you have any questions or would like to seek additional insight beyond the Colorado Short Sale FAQ, feel free to Contact us at any point in time.