Don't do a short sale ... until you have asked these questions (don't worry, we know how you can get the answers and the solutions).
MLS4owners.com has started a new patent-pending short sale service, and we call it ShortSales4owners. Instead of pocketing a big sales commission from you, we make most of it available to pay your attorney, CPA and bank(s)! You only need this service if your situation fits the scenario described below. Otherwise you can use the regular MLS4owners Method that our customers have used to sell nearly $1 billion in residential real estate since 2001.
| What is my problem? |
If the equity in your home has evaporated, the rest of these questions are important for you to consider. |
| What are the potential solutions to my problem? |
There are many potential solutions. The one thing they have in common is that real estate brokers (including us!) are not qualified to advise you on which one is best. |
| What is a short sale? |
A "short sale" is one in which the proceeds of the sale will not be enough to pay off the mortgage(s) and the seller does not have the resources to make up the difference, which means you can't sell your home without the approval of your lender. |
| Should I attempt a short sale? |
Maybe. But there are many more questions to answer before starting. |
| What are my options? |
You could try to sell your home and hope that your lender will approve the transfer of title to your buyer even though you still owe money on your mortgage (Yes, you will probably still owe the bank for the unpaid balance). This is known as a short sale. |
| I'm confused. I thought a short sale approval means the bank is willing to forgive some of my mortgage? |
Nope. A short sale approval only enables you to transfer title to a new owner. The bank releases its claim on the collateral (the house), but they still hold your promissory note. In some cases you can negotiate a reduction or elimination of the remaining note balance (the "deficiency"), but that is not the same thing as a short sale. |
| Can a real estate agent negotiate with my bank to renegotiate my loan or forgive my debt? |
Absolutely not. A real estate agent can present purchase and sale agreements to your lender in hopes of getting approval of the short sale, but agents are neither qualified nor permitted to negotiate on your behalf to reduce the balance you owe to the bank. |
| If the bank forgives the unpaid balance, do I have to pay taxes on the amount that was forgiven? |
Probably. Ask you tax accountant to be sure, but forgiveness of debt is often considered to be taxable income. |
| Do I have choices besides a short sale? |
Yes, including coming to the closing table with enough money to pay off the loan(s), foreclosure, a deed in lieu of foreclosure, bankruptcy, and keeping the property. |
| Who can advise us on our best choice? |
An attorney can lay out your choices and help you understand which option is likely to be best for you. |
| If I can't afford to keep my house, how could I possibly afford an attorney? |
That's where the ShortSales4owners program comes in. |
| ShortSales4owners? |
MLS4owners.com has started a new patent-pending short sale service for people in your situation, and we call it ShortSales4owners. Instead of pocketing a big sales commission from you, we make most of it available to pay your attorney, CPA and bank(s)! |
| Do I have to pay a buyer agent? |
It depends on whether the buyer is represented by an agent. If the buyer is represented, the buyer's brokerage would earn 3% at the closing of the sale. If the buyer is not represented, that 3% is available to reduce or eliminate the amount you owe the bank. Our system is designed to get the buyer directly to the seller. Some buyers prefer to work with an agent, and some like to work directly with the seller's attorney. |
| Do I have to list my property before getting access to an attorney? |
No! Prior to MLS4owners.com's acceptance of the listing, your attorney should provide you with a preliminary assessment as to whether attempting a short sale is in your best interest (versus foreclosure, bankruptcy or trying to keep the house). This assessment will also explain the difference between the lender's approval of a short sale and the lender's forgiveness of the deficiency. If your attorney has any questions about our program, we would be happy to talk to them. |
| Why would MLS4owners.com want me to talk to an attorney first, when the attorney might advise me not to use the ShortSales4owners program? |
We find the more you know, the happier you will be with your experience. It's the same philosophy we have used since 2001 for the thousands of sellers who have closed nearly $1 billion in sales and saved more than $35 million in commissions.
If you move ahead with a short sale, your lender is going to have a paid professional trying to make the best deal for the bank. Don't go into that negotiation without an attorney. |
| So what do I do now? |
If you would like to talk with a real live human about how the program works or you would like to review the short sale agreement, drop us an email or give us a call at 253-460-1900. You may also want to review the Short Sale Matrix. If you would like to move ahead with the ShortSales4owners program, please provide us with your email address and phone number and we will send the Agreement to you or your attorney. |
Or keep reading and learn more about ShortSales4owners, a service of MLS4owners.com
WHAT IS A SHORT SALE?
A "short sale" is one in which the proceeds of the sale will not be enough to pay off the mortgage and the seller does not have the resources to make up the difference.
HOW SHORTSALES4OWNERS WORKS
Target Market
Homeowners in Washington and Oregon whose sales proceeds are expected to be less than the amounts owed to lien holders, and who do not have other assets to bring to the closing table to satisfy the outstanding debts, and who want to save money by taking ownership of the home selling process.
Product
ShortSales4owners adds a real estate law component to the MLS4owners.com self service realty program used by thousands of sellers since 2001, and defers the seller's payment obligation until the closing of the sale. MLS4owners.com charges a flat fee, leaving the rest of the listing commission available to pay attorneys costs. If the buyer is not represented in the sale, the buy side of the commission can be used to reduce or eliminate the amount the seller owes to the bank.
Problem
Sellers often incur legal costs related to short sales, and real estate agents are neither qualified nor permitted to offer legal advice, negotiate new terms of a loan, or negotiate the forgiveness of a deficiency. Agents are also not qualified to advise a seller about whether their best option is a short sale, a foreclosure, or a bankruptcy. Sellers often misunderstand the difference between a short sale and forgiveness of debt, and they are often unaware of the tax consequences of debt forgiveness. Sellers who obtain proper legal representation typically pay for those services above and beyond their real estate commissions.
Problem Solved
ShortSales4owners provides the same multiple listing and Internet exposure offered by the proven MLS4owners.com program, while reducing the seller's cost of completing a short sale and improving their legal representation.
Fee Structure
• $250 upfront.
• Out of the 6% commission on a successful sale, 3% will be paid to the buyer's agency (if the buyer is represented).
• If the buyer is not represented the buy-side commission will go to satisfying the seller's debts.
• From the 3% on the listing side, MLS4owners.com will first collect $1500 (not including the $250 you already paid) plus Washington B&O tax (0.05% of the sales price with our program). MLS4owners.com will then pay promptly submitted invoices from an attorney or certified public accountant, capped at the lsiting side commission less the portion retained by MLS4owners.com. If there is anything left over, MLS4owners.com retains the balance.
• For example, on a $300,000 sale there would be $7100 available to pay attorney and CPA fees ($9000-$1900). If the buyer was unrepresented, there would be an additional $9000 available to pay the lien holders.
Process
• Prior to MLS4owners.com's acceptance of the listing, attorney will provide preliminary assessment to seller as to whether attempting a short sale is in their best interest (versus foreclosure, bankruptcy, coming to the closing table with enough cash to pay off the loans, or trying to keep the house). This assessment will also explain the difference between the lender's approval of a short sale and the lender's forgiveness of the deficiency.
• Upon receipt of the ShortSales4owners Agreement, MLS4owners.com will create and manage the advertisement in a manner similar to the program it has offered since 2001.
• Attorney will maintain a transaction file and seller and attorney understand that MLS4owners.com will not keep a transaction file.
• Attorney will negotiate lender's approval of a short sale.
• Attorney will attempt to negotiate forgiveness of debt, if it would be in the best interest of the seller.
COMPARE COST SAVINGS
Most often your real estate agent will charge 6% to handle a short sale, which does not include the cost of legal services for negotiating any forgiveness of debt or restructuring your loan. If you have more than one home loan or other debts attached to your home, those services get even more complicated. Nor does it include any analysis of the tax consequences whatever settlement you make with your lender. Yes that's right, if the bank forgives any of your debt you will probably owe income tax for the amount that is forgiven.
With ShortSales4owners, the commission includes the fee you pay for your attorney for navigating through the short sale process, How much could that save you? $3,000? $5,000? More? Could that be the difference between the lender accepting or rejecting your short sale?
With most brokerages you owe the 6% regardless of how the home sells. With ShortSales4owners you don't pay the buy-side of the commission if your buyer is not represented. That means you save 3% of the sale price if your buyer happens to be one who does not seek assistance from a real estate agent. On a $300,000 sale that is $9,000. Now we are up to $12,000, $14,000 or more in potential savings, which dramatically increases the chance that your lender will approve the sale. It also slashes the amount you might still owe to your lender after the closing of the sale, and improves the odds that your attorney could negotiate forgiveness of the remaining debt.
|
