The Short Sale Process

We had a great sales meeting yesterday.  Stewart Prather’s review of our E&O policy was very informative.  There was a good bit of discussion on short sales.  The following form provides an explanation and overview of the short sale process.

 

 

THIS FORM is provided by __________________________________________________ (the “Company”). The following is an

explanation regarding some of the practical and legal issues involved in Short Sales.

1. SHORT – SALE DEFINED. The term “Short Sale” is used in the real estate business to describe a situation where

there is more debt owing against a property than the property is worth. In other words, the owner cannot sell the property

unless the creditors agree to accept a payment that is less than the amounts actually owed to those creditors. The creditors

are usually mortgage lenders, mortgage insurers, bankruptcy trustees, and federal, state and local taxing authorities (such

as the IRS or State Revenue Commission).

2. CONTRACT CONTINGENT ON THIRD PARTY APPROVAL. A Short Sale requires the written approval of the

creditors. Consequently, the owner of the property, and any interested buyer, are advised that even if they reach an

agreement between themselves for the purchase and sale of the property, that agreement will be contingent upon receipt of

creditor approval of the terms of the Short Sale.

3. THIRD PARTY REJECTION OR CHANGES TO PROPOSED SHORT SALE. Based upon the obvious financial loss,

creditors may reject a proposed Short Sale. If, however, the creditors do not reject the proposed Short Sale, they may send

to the owner a list of requested changes to the proposed purchase contract. Some of those changes may affect the owner

and others may affect the interested buyer. For example, the creditors may require that the property be sold in “As-Is”

condition. Also, the creditors will normally not permit the owner to pay for any of the buyer’s closings costs, repairs, etc. The

owner and the interested buyer are not obligated to accept any of the changes requested by the creditors in which case,

there will be no Short Sale. If, however, the owner, the interested buyer, and the creditors reach a written agreement with

each other, then, at that point, the Short Sale transaction may proceed to closing,

4. DELAYS IN RESPONSE FROM THE CREDITORS. Most purchase contracts for Short Sales impose a deadline for

written approval by the creditors. As a practical matter, the creditors rarely meet that deadline. THE OWNER AND THE

INTERESTED BUYER SHOULD BE PREPARED FOR SIGNIFICANT DELAYS IN RECEIVING ANY RESPONSE FROM

THE CREDITORS.

THE OWNER AND ANY INTERESTED BUYERS SHOULD UNDERSTAND THAT THE CREDITORS MAY NOT EVEN

RESPOND TO A REQUEST FOR APPROVAL OF A PROPOSED SHORT SALE TRANSACTION. In the event creditor

approval of the terms of a proposed Short Sale is not received prior to expiration of any time deadline in any applicable

purchase contract, then the owner and the prospective buyer shall determine whether the purchase contract to allow more

time for obtaining creditor approval, or whether the purchase contract shall simply be allowed to expire, with no further

obligations between the parties and with the earnest money deposit being returned to the prospective buyer. Any extension

 

COPYRIGHT UTAH ASSOCIATION OF REALTORS

Printed as modified by the Kentucky Real Estate Commission with permission of the Utah Association of REALTORS

®2004 – ALL RIGHTS RESERVED®.

 

2

 

of a purchase contract shall be at the discretion of both the owner and the prospective buyer, with no obligation on the part

of either party to extend.

5. PROPERTY TO REMAIN ON THE MARKET. Pending approval by the creditors of the terms of any Short Sale and

pending completion of settlement and closing on said Short Sale, the owner shall continue to market the property for sale

and solicit from interested buyers offers for purchase. If the terms of any of such offers are acceptable to the owner, then

the owner may accept such offer(s) as a back up contract in the event that any prior contracts of sale shall be allowed to

expire, without mutual extension, prior to creditor approval of the terms of Short Sale.

ACKNOWLEDGEMENT OF RECEIPT

The undersigned acknowledge that they have read and understand this document.

________________________ __________ _______________________ ___________

Signature Date/Time Signature Date/Time

 

E-mail and a new twist on HomeFeedback

The agenda for the Tech Session has changed a bit for this Thursday (10am and 2pm), but not much.

Yes, we are going to be taking e-mail marketing to web leads and others quite a bit further. If you missed last weeks’ session, be sure to make it this week if at all possible.

The other thing on the agenda is a new free (yeah!) and different way to handle feedback. This system is something that may be a good alternative for you.

I look forward to seeing you there!

Eric

New Louisville Foreclosure Site

Many of the agents in our office use the JCOMM site to search for foreclosures and when they will be sold at the courthouse. Over the weekend, we received word that a website has been created that is a “mash up” of the courthouse data, plus other sources to make it very convenient for Agents who are working with investors to get access to the information they need more quickly.

Here is the site. (If you work with investors, please bookmark it! I think you will find it useful.)

Welcome Back Reva Morris!

RE/MAX Properties East welcomes back Reva Morris!  She joined our office in 1989 and was with us for 12 years until she left in 2001 when she transferred to RE/MAX Action First.  Reva has three children: Chuck, Stacy, and Kari and also has three beautiful grandchildren.  She enjoys bicycling, walking, reading, and most of all traveling with her husband Wayne.  It’s great to have her part of the team again!

RPE Raises $10,000 for Kosair!

We are proud to announce RPE has raised $10,000.00 for Kosair Children’s Hospital through Children’s Miracle Network since April of last year.  We have 24 agents signed up on the “Miracle Home Program” and would love to have 100% participation from the office.

When you join the Miracle Home Program you pledge $25 or more out of every closing to the Children’s Miracle Network.  An Honor Card will be sent to your client telling them a personal story about a child that has benefited from the services at Kosair Children’s Hospital and that a donation has been made to the hospital in their name.

It’s a great listing tool because you can put a “Miracle Home” sign rider on your RE/MAX sign in their yard.  You are making miracles happen for children in our area!

If you are interested, please see Angie Cox x 631.

Lead Conversion Best Practices

Ever wonder why some folks seem to convert internet leads more than others? Me too! I have been working to figure out the best practices of those in our office who are the best at it.

Beleive it or not, they don’t spend all day at it, either!

In this week’s Tech Session we are going to learn some techniques that successful online lead converters have used for years:

The art of relinquishing control, yet keeping it.

The ability to EFFICIENTLY manage leads.

Making an autoresponse email look like a personal note.

How successful REALTORS are engaging potential clients online, but moving the conversation to a venue where they have the upper hand. The phone.

All this and more. I look forward to seeing you Thursday 10am and 2pm.