We work with borrowers to find solutions to avoid foreclosures. These options include loan modifications, short sales, temporary restraining orders, chapter 7 bankruptcy, chapter 13 bankruptcy, and finding investors willing to purchase your home for cash.
It should be noted that our sole focus is helping you retain your home, and we are not a debt counseling agency. As such, we only work with individuals who own a home that they are in danger of losing because of financial or other difficulties. If you are looking for general assistance with formulating a plan to pay off credit card or other debts, we would recommend you reach out to a credit counseling service, such as Consumer Credit Counseling Service (CCCS), which is a non-profit credit counseling service.
What is a Short Sale?
A short sale is an agreement by the lender to allow the property to be sold to a third party for less than the amount owed on the mortgage. In many instances, the lender will forgive the remainder; however, the lender may require that you remain personally liable for the difference.
The purpose of a short sale is to find a mutually acceptable solution to avoid the home being foreclosed upon. Contrary to popular belief, banks do not want to take back homes. Between attorney fees, realtor fees, and other expenses, banks often lose money in these situations. Therefore, if they can receive close to what they think they would net from the foreclosure and sale of your home, they will often accept a short sale.
Do I Need a Lawyer for a Short Sale?
You do not need a lawyer for a short sale; however, you will need a licensed real estate broker who is experienced in handling short sale transactions. Moreover, it does not hurt to have a lawyer involved to help guide you through the process. Working with Rick Davis Real Estate, you get both as Rick is both a lawyer and a real estate broker.
Can Any Real Estate Agent Handle a Short Sale?
There are no special licenses or experience requirements for a real estate agent to handle a short sale. With that being said, it is a complicated process and even one form filled out incorrectly or one document missed can slow the process down for weeks. The broker will often need access to certain systems — such as Equator — to submit documents or work through the short sale process. If the agent does not have access to these systems, there may be a delay while they get their accounts set up and figure out how to use the system. Therefore, we would recommend only working with agents who are experienced with the short sale process.
The primary advantage to an experienced short sale broker is that the broker is familiar with the process and can help head off problems early on. For example, if the broker knows that a certain document is going to be required and it is not in the initial packet, the broker can follow up with you to obtain that document before submitting to the lender. This can help cut significant time off the process as it may have take two weeks for the lender to review the packet and advise that the document is missing.
Why Use Rick Davis Real Estate for my Short Sale?
Rick spent the beginning years of his career representing some of the largest banks and mortgage servicers in the country. Moreover, he worked on site at two major servicers. As such, Rick has an inside knowledge of how these banks work and has contacts throughout the lending industry. This experience helps him to understand how to submit information to the banks in a way that makes them more likely to approve the loss mitigation requests faster.
Moreover, unlike many of the real estate brokers that assist with short sales, Rick is also a licensed attorney, which gives you the best of both worlds when it comes to the processing of your short sale application.
How do I Know a Short Sale is the Right Option for Me?
We want you to know the right foreclosure avoidance strategy for your situation. There is a lot of misinformation on the internet and it can be hard to get straight and understandable answers from your lender. Therefore, before we embark on any foreclosure avoidance strategy for our clients, we will walk you through a process that helps evaluate your specific situation, your goals, and what option is best for you. Below is an overview of this on-boarding process.
Introductory Phone Call
This is a short introductory phone call to briefly discuss your situation, the options available and what the process looks like when trying to avoid foreclosure. Because it requires a deeper dive into your finances and circumstances, this conversation will not be for the purpose of determining what option to pursue, but rather is for a general overview and determining if we would like to move forward with the next steps.
At this point in the process, we ask that you take the time to complete our foreclosure avoidance intake form. This form will take about an hour or so to complete and will require you to upload relevant documents, such as paystubs, bank statements, and other relevant documents. Therefore, it is recommended that you complete this form when you have some time and are in front of a computer. You can save and return to the form if you need to obtain additional information or just want a break.
In order to determine the right options for you, we will have to do an in-depth review of your loan, finances, and circumstances. Therefore, we ask that before we proceed to the next step that you make a deposit of $250. This deposit will be placed in the firm’s trust account. If you elect not to proceed following the strategy session, the deposit will be paid to the firm as compensation for the time spent reviewing your information and options. If you elect to proceed with a foreclosure avoidance option, the deposit will be applied to the amounts owed for additional services.
During this phase we will review the information that you provide through the intake form and will help to determine the best option or options for you to avoid foreclosure. Because this is an in-depth review, this stage may take up to a week. With that being said, if a Missouri trustee sale is imminent, we will expediate this review as is appropriate.
Foreclosure Avoidance Strategy Session
At this point in the process, we will schedule a time to talk with you about the results of the review and the various options available to you. We will discuss the pros and cons of each option, including the effects on your credit, likelihood of success, and costs involved. At the conclusion of this discussion, we will have a plan in place for moving forward with your custom foreclosure avoidance plan.
Sign Representation Documents
Once we have a plan in place, we will send you the appropriate representation documents, which depending on the plan agreed upon may include a lawyer retainer agreement, broker listing agreement, and other third-party authorizations.
As we walk through this process, you will have access to an iPhone, Android, and web app that tells you exactly where we are in the process and what the next steps look like. You can learn more about this app by going to the Case Status page on our website.
What Does the Short Sale Process Look Like?
Although the process may vary for each lender, the basic overview of the short sale process is as follows.
List Property for Sale
In order to do a short sale, you must have a buyer who is ready to purchase the property. Therefore, we must list and market the property for sale using the MLS system. We will confer with you regarding the listing price and scheduling showings. The listing will indicate that the sale will be a short sale and will require lender approval.
Property Under Contract
Once the property is under contract, we enter the standard contingency period. During this period, the buyer will have the opportunity to inspect the property to determine if he or she wants to purchase the property or renegotiate the terms.
Prepare Short Sale Application
Most lenders have their own forms that are required to seek approval of a short sale. Moreover, the more organized and clear the application (and supporting documents) are, the greater likelihood of approval of the application. Therefore, we want to take our time to make sure to present the best case on your behalf and this stage may take up to a week or so. In addition to the contract and documents related to your financial situation, we will also submit photos of the property, inspection reports, a bid for any work to be performed on the property, and a comparative market analysis showing the sale price of other homes in the area.
Waiting for Lender Approval
Once we have submitted all of the documentation, we must wait for the lender’s approval. This can be a drawn out and frustrating process; however, we will take care of it on your behalf. A short sale approval can come as quickly as a few weeks, but more commonly takes a few months for approval.
Once the short sale is approved, we will work with the title company to schedule the closing. If the borrower is obtaining a loan to purchase the property, the title company must send all of the documents out at least three business days prior to the closing. Depending on the title company, you may be able to sign and mail the documents to the title company or may need to be physically present for the closing.
Once all of the documents have been signed and notarized, the title company will record the deed transferring the property from you to the buyer. The title company will also send the funds to the lender to pay off your loan. Please note that it may take several weeks, depending on the lender, for your loan to show as paid off in their systems.
What are the Costs for Assistance with a Short Sale?
In order to determine the right options for you, we will have to do an in-depth review of your loan, finances, and circumstances. Therefore, we require an initial deposit of $250 prior to the review of your documents and information submitted through our intake form. This deposit will be placed in the firm’s trust account. If you elect not to proceed following the strategy session, the deposit will be paid to the firm as compensation for the time spent reviewing your information and options. If you elect to proceed with a foreclosure avoidance option, the deposit will be applied to the amounts owed for additional services.
If you engage Rick Davis Real Estate Sales to list your property and assist with a short sale, you will agree to pay a commission equal to 3% of the final sales price minus the $250 already paid. If the short sale is not approved, there are no fees or commissions owed other than the $250 paid for the review of your foreclosure avoidance options.