About Heather Expertise I can offer information about pre-foreclosures, foreclosures, short sales and high rise projects in the Las Vegas area. I can also assist with financing questions, especially involving investors.
Experience I have been in the real estate industry since 1990, and 4 years in Las Vegas. I am also a licensed loan agent in Nevada.
Education/Credentials BA in Liberal Studies from CSU Northridge
Licensed Realtor
Question I met with someone that runs a short sale business who offers to handle the short sale process and find a buyer for my property for me. I'm upside down in my mortgage (owe more than it's worth) and I'm struggling with it. Taxes and insurance aren't even escrowed.
I have never been late on a payment, and I know usually you have to have at least one late payment in order for the lender to consider doing a short sale. However, I've yet to afford to pay the second half of the summer property taxes from 2007.
The short sale guy says they have a system for finding buyers for my property to go back to my lender with. He said that he's heard of people getting short sales to go through in instances where the person has never been late on a payment, however, he was honest enough to tell me that their company has yet to get one to go through on someone who's never been late, but he's heard of instances where it's happened with others in the industry. They charge $1900 for their "service."
My questions are, (1) is being delinquent on property taxes enough to get the lender to consider a short sale if I've never been late on a payment but can show that my net worth is seriously negative(I know it kind of depends upon the lender, but...)?, (2) aren't their other services out like this that I can get done for free or for a cheaper price, and (3) isn't it somewhat silly to spend $1900 for a CHANCE that the lender will accept the short sale?
Answer Hi Alvin -
Do I know of a lender that will do a short sale if you're not behind, but about to be delinquent on property taxes, the answer is no. Lenders could care less about the property taxes. I don't know what state you're in, but in most states when you're delinquent in your property taxes, the tax lien can be sold to an investor for what's owed plus penalties. Then the owner of the tax lien can now charge you a certain interest percentage for you to buy it back, but they do not actually get full ownership of the property for 2 years. If the property goes to foreclosure while they own the tax lien, they could be out the money or they could gain complete control of the property with all other liens including mortgages being wiped out and they get the property for just what they paid in delinquent property taxes. Its complicated and risky but its one avenue of investing.
As for the $1900 fee, A good real estate agent will help you prepare the property for a short sale for FREE! You can find out who those agents who are working with a lot of short sales by searching your area listings, checking online which ones are short sales and then calling those agents and ask them -
1. How many short sales have you done?
2. Do you know the process?
3. How many have been accepted?
A good real estate agent will know that you need to assemble the following information:
1. Current financials including bank statements for the last 60 days
2. A listing of income and expenses which shows how much you are in the red each month
3. A hardship letter which explains why you are behind in your mortgage
4. The last 2 years tax returns
The real estate agent should compile this with a broker's price opinion (BPO) on the value of your property so the lender will decide to accept or decline your attempt to short sale the property. If the paperwork isn't prepared properly and the hardship letter isn't convincing enough the bank could say no.
Please note that some lenders will only consider the short sale after an offer has been made. Also note that many lenders will only consider a short sale if a real estate agent is involved because they want the property on the market. Lenders will deal with experienced investors if they know how to present a short sale offer, but these investors are few and far between. You can find experienced investors yourself by calling all the we buy houses ads and signs in your area and explain your situation and see if its the type of deal they do.
Regardless, I wouldn't pay someone $1900 to see if they could maybe get an investor to buy my property because they're also getting a finder's fee from the investor so they're double dipping. And if you had $1900, I'd pay the property taxes instead.
Here's another resource for you. If you were in Las Vegas, I could help you. If not, let me know where you are and I'll refer a couple agents in your area to assist you.
