Short Sale Las Vegas

What are the characteristics of a good short sale agent?
In a short sale the lender pays the listing agent and buyer’s agent so there is no cost saving by selling the property yourself (unless you are less than 5% underwater, as this is the total fees split between listing and buyer agent). You should select a local agent who knows how to set an accurate market price and quickly attract buyers.

The agent should be experienced and have a good ratio of success. They should also be ethical and uphold their obligation to present offers as they come in, they are not to wait for one offer to be rejected if another has been presented in the meantime. Some terrible agents present a lower offer if it is their buyer rather than a higher offer from a buyer represented by another broker because they want to get both the listing and buyer agent commissions. If you have an agent that breaches fiduciary obligation then it could well lead to a failed short sale, and result in foreclosure.

How do you work with a bank on a short sale?
Banks have loss mitigation committees which clearly define the procedures and forms required for a short sale. Your agent will be familiar with these and ensure that a complete application is made.

On a short sale what do I need to prepare for the bank?
The first thing you need before approaching the bank is a qualified buyer. Most banks have an Authorization Letter template that they will require you submit so that your agent can talk to them on your behalf. This will be just one part of the short sale package that you submit.

How do I do a short sale on an FHA loan?
If you have a Federal Housing Administration (FHA) loan then you need to work with the U.S. Department of Housing and Urban Development (HUD), which has a pre-foreclosure sales program that has to be dealt with as the first step. The FHA process demands that you get an FHA appraisal, limits the amount it will contribute to buyer’s closing costs, and limits the amount that can be spent on junior liens.

Is a loan modification a viable alternative to a short sale?
Bank loan modification committees are prepared to extend loans, delay payments, forgive past payments, provide money management counseling , reduce interest rates, but only rarely are they prepared to reduce principal balance. The reason is the fear that all borrowers would then line up for reductions. For this reason a short sale is the most viable way to reduce your loan amount, even where the delinquent borrower would be more than willing to take on a loan at the reduced capital value.

What is a cram down?
A cram down is where a lender is forced to write down a portion of a loan balance, usually by a bankruptcy judge. This right was taken away from judges in 1993, but legislation is changing.

Should I use a loan modification officer?

Never work for someone that offers to modify your loan in return for an up front fee. It is very difficult to secure a reduction in a loan balance, and most of these consulting companies will simply take you money and fail to deliver.

What does the short sale package contain?

  1. Authorization letter allowing agent to act on your behalf
  2. Proposed terms
  3. Estimated HUD-1, or some other estimate of the lender’s net position
  4. Repairs required prior to sale
  5. Hardship letter with addendums such as outstanding invoices
  6. Seller’s financial condition evidenced by W-2s/1040s from prior two years and bank statements for the last 90 days
  7. Broker Price Opinion supporting the sales price
  8. All outstanding liens and mortgages
  9. Buyer’s offer


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