I hate shopping.  I realize I’m a girl and this is the result of some kind of genetic mutation gone bad.  Cave women surely had an unexplained desire to shop for the survival of the clan, right?

I’ve learned to navigate the mall as if on a reconnaissance mission, in and out in less than half an hour, making it to the car with a suite, shoes, and some random hat I’ll probably never wear.  The grocery store, however, is my nemesis.  My only motivation is the mental replay of “There’s nothing to eat in this house,” from the desperate-sounding anguish of a teenager on the other end of the phone.  “Text me a list,” I say.

The scavenger hunt for waffles and milk isn’t the problem.  It’s the ingredients.  We have several no-no’s and that’s where it becomes a challenging task.  So as I’m reading the side of a container of yogurt and catch – gasp! – sucralose, the unfriendly neurotoxin we’re allergic to, my perplexing cue-dependent memory conjures a vision of an MLS sheet and seeing the words – gasp! – short sale.  Seriously, it’s like that.

I am SFR (Short Sale and Foreclosure Resource) certified.  I’ve also been listing and selling short sales for several years now.  How well the process goes is completely dependent upon the cooping agent and the bank.  Here’s how it works:

Suzie owes $100,000 on her house and has to move.  Her house will probably sell for around $80,000.  Now if her bank accepts an amount that is less than what she owes, it becomes a short sale.  A buyer sees Suzie’s house and falls in love. 

Suzie is still the legal owner of the home.  The bank is a lien holder.  Suzie signs the contract, not the bank. The bank gets a copy of the contract and processes it for approval to accept the lesser amount – this is between Suzie and the bank with the Realtor as the authorized middleman/woman. The buyer waits, and sometimes waits and waits and waits.

When I have a list of homes my buyer wants to see, the ones with “short sale” go to the side.  I call the agents BEFORE we even look. 

Who is the lien-holder? Is there a second loan on the property? Is it a pre-approved short sale?

Some banks pre-approve the short sale, which means they have already determined the amount they are willing to accept on the property and they have already scrutinized the seller’s financial hardship and approved their need to sell short.  Some banks don’t start that process until there is a contract on the property.  We know who those banks are and unless our buyers are willing to wait six months to a year to close, we don’t even look at the home.

That amount the bank might be willing to accept is another variable to consider.  I have heard the myth that it is dependent on how much is owed on the house; not so.  We’ll go back to Suzie’s house.

The bank will get a market value of the property from a third party (often called a BPO – Broker Priced Opinion) and base the amount accepted on a percentage of the market value.  Not every bank uses the same formula, and even within the same bank that can vary depending what type of loan was used to purchase the home originally (Government backed loans have regulations). Example:

Suzie owes $100,000 on her house.  Current BPO value: $85,000.  Bank accepts 80% minimum value for this particular property – net price minimum of $68,000 (Add estimated closing costs charged to bank including commission to get total minimum sales price).

So, while it’s true that short sales often get a bad rap, they are sometimes an extremely viable means of selling or purchasing a home.  Basically, we need more regulations.  Selling a home through a short sale often keeps the home occupied and maintained; that’s good for the home, good for the neighborhood and good for the community.  Once a home becomes a vacant foreclosure it has a strong negative effect on the surrounding community and the amount the bank will lose in its original investment.  I could rant at this point, but I have a kitchen full of groceries I need to put away so I can hopefully avoid the grocery store for at least another week!

Audrey Elder

Heartland Home Team

Keller Williams