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About Diann Tonnesen
Expertise
I have over 25 years of experience in real estate in Las Vegas. I can answer almost any specific question about buying or selling homes, condos, high rise properties or land in the State of Nevada as well as general real estate questions that pertain to the industry as a whole. I can also answer questions related to financing on FHA and VA loans, conventional loans, interest only loans, stated income loans, and hard money lending. You can also go to my site at http://www.greatlasvegashomes.com which has lots of information on it as well.

Experience
With my husband I have been helping families call Las Vegas home for over 23 years and I still love it! We developed a strong niche in the Internet industry and had to start a team of agents to respond to the large volume of calls we were getting. Currently we have 18 full time agents, a sales manager, two leads managers and two transaction coordinators assisting us. Last year we helped over 280 families and investors find property in Las Vegas.

Organizations
Las Vegas Board of Realtors and the National Association of Realtors

Publications
PR Web, Las Vegas Review Journal, and interviewed for numerous magazines as well as a broadcast interview for television by CNN.

Education/Credentials
college journalism major

Awards and Honors
Top agent in the state of Nevada for sales multiple years when working for Century 21 and last year one of the top 10 agents in the country with Prudential.

Past/Present Clients
Just too many great clients to mention here, but I can certainly provide a long list of references on request. Or check out our web sites at:

Las Vegas Real Estate
Las Vegas Condos
Henderson Real Estate
Las Vegas Golf Course Homes

You are here: Experts > Shopping > Home Buying/Selling > Buying or Selling a Home > Short Sale Questions

Buying or Selling a Home - Short Sale Questions

Expert: Diann Tonnesen - 11/6/2009

Question
QUESTION: Hi. I am hoping you can help me with some questions. We are currently trying to sell our house and we have to do a short sale because it is appraised at over $50,000 less than what we bought it for. We would prefer not to even sell our house right now but my husband is in the military and he is due to transfer out next summer.

Anyway our house has been on the market for almost a month now and we have not had even one person come to look. I am thinking the problem is that when people find out it is a short sale, they will not even bother coming to look because they know short sales can take a really long time. So that is one problem we are having... The other is that we dont even know for sure that we will be able to get a short sale approved.. Our bank has just told us that we have to wait until we have a buyer and then submit the paperwork for a short sale.

Also, I am hearing that you are not likely to get a short sale approved if you are not having major financial problems. We are doing ok, my husband is very good with budgeting our money.. Our mortgate payments are on time and we dont have outstanding bills. So we are wondering if we would even qualify for a short sale in the first place.. Unfortunately we cant get any info from the bank about if we would or not, so this is a really frustrating situation.. This is why I am trying to find out what would be the best next step for us. Should we just wait until we get a buyer (if we ever do) and then just hope we get a short sale? Or is there anything else we can do right now to help ensure that a short sale would be approved?

This is a really tough situation and I am not quite sure what to do next. I would like to rent out our house but my husband doesnt like the idea at all since we would be living out of state and would probably lose a couple of hundred dollars a month, especially since we would need to get a property management company..

So, if you have any advice for us on the short sale situation, I would really appreciate it. Thanks so much for your time!!

Jennifer

ANSWER: Hi Jennifer. First of all, thank you to your family for your contribution to our country. It's not easy being in the military, but I certainly hope you are enjoying this time in your lives.

As for the short sale, the good news is you do not necessarily have to ruin your credit to be approved! You do have to show some sort of hardship and a good reason for the bank to consider the short sale. In your situation I would think you would have an EXCELLENT chance of being approved. In your letter you need to tell the bank:

1. that your husband is military and being transferred out on such and such a date.
2. currently you are just able to afford your payments, but after you move you will not be able to afford an additional housing payment.
3. want to emphasize that since you are in the military, you have no choice but to move.
4. you would like to be able to get as much money for the home for the bank as possible, and are keeping it in pristine condition and that you are so sorry that the crash of the real estate market has made it impossible to sell for what you purchased it for
5. add any other extenuating circumstances or hardships that might have affected your finances since you bought the house
6. end with thanking the bank for considering your application for a short sale and hoping they can help you

I truly do think you have a good chance of having your short sale approved because you are in the military and circumstances totally beyond your control (the economy and a job transfer) are the reasons you need a short sale. Most people overspent and did not manage their money wisely. It seems like you did - if anyone DESERVES to be considered for a short sale, it is your family!!

If you can keep your payments current and the bank does approve the sale, you should actually be able to buy another home in a very short time. The short sale shows up on the credit report as a "negotiated sale" and does not affect the scores very much at all. It is the LATE payments that really make a negative impact on credit scoring.

As to why your home is not being shown, it is all about the price. You need to make your home by far the lowest priced home in the area in order for buyers to consider looking at it. Agents and buyers both hate short sales because they don't know if they will be able to close. So in order to make your home feasible, it has to be worth it financially to go through the hassle. As long as you have had it on the market at a higher price before, your agent can document to the bank that no one put in an offer until the price was lowered. The bank just doesn't want to see a one day sale. They want to be sure they got as much as they could, but usually will be willing to settle for about 80% net to them (after deducting closing costs) of actual market value.

So I would advise you to start working on a really great hardship letter and keep lowering the price on your home weekly until you start getting lookers and offers. You didn't mention what price range your home was in, but usually I do $5k to $10k reductions per week until I get an accepted offer.

Good luck to you and please let me know if there are any other questions you have!! Wish you were here in Las Vegas so I could really help more. :)

---------- FOLLOW-UP ----------

QUESTION: Thanks so much for all of the advice!! I think lowering the price is really what we need to do . My husband is convinced that if we we make the price to far under the appraised value that the bank is not going to approve the short sale, but I will show him this email. We started out house at 160,000 and just lowered it to $155,000 after almost a month.. I think we should probably lower it again soon! The main reason we are trying to keep it a little above the appraised value is so that if the buyer wants to make a lower offer that we would be able to take it. I know they always want to feel like they are getting a good deal! Thanks again for all of your help!

Answer
Tell you husband not to worry about pricing it at or even a bit below appraised value. You have already proved that a higher price is not generating offers or even showings. I don't know what the appraised value of your home is, but you definitely want it listed below $150k. That is considered a major "price break" in the real estate industry. If your appraised value is even lower, go lower than that! (Sometimes we price our homes really low and end up generating multiple offers above list price.)

But the bottom line is, if the price is too high and no one is even looking, no one is going to buy. You should be getting at least four showings a week.

Good luck, and if you have more questions, you know how to find me!

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