Frequently Asked Questions
Q: What is a Short Sale?
A: A Short Sale is a Lender’s voluntary acceptance of less money than is owed to allow a property to be sold as an alternative to foreclosure.
Q: Why would a Lender approve a Short Sale?
A: If the Lender believes the Short Sale offer is better than what they would net if they took the property back at foreclosure and sold it themselves, they will most likely approve a Short Sale. The costs of taking a property back in foreclosure are tremendous for the Lender, including accrued interest, attorney's fees, listing charges, and maintenance costs.
Q: What is a short sale candidate?
A: A seller that is over leveraged (owing more than they can sell the home for).
Q: How do I locate over leveraged sellers?
A: First, review your current listings to determine if you have any clients that are over leveraged. In addition, approach any future clients you meet that are over leveraged, in foreclosure or headed for foreclosure
Q: How do I know if a property is a Short Sale prospect?
A: If the homeowner is behind on their mortgage, has some sort of hardship, and does not have the financial ability to solve the problem on their own, then it might be a good Short Sale prospect. Run it through our Is It a Short Sale Prospect? analysis and fill out an Information Sheet with the details – we will contact you and let you know whether we think we can help with a Short Sale.
Q: Why would a homeowner opt for a Short Sale?
A: A successful Short Sale will prevent a foreclosure from appearing on the homeowner’s credit report. If the home is foreclosed on but the mortgage company is not able to sell the home for what is owed on it and recoup all of their costs, the homeowner is still obligated for the difference. In addition, the Lender will tack on the arrearage, interest charges, legal fees, listing charges, and maintenance costs of the home while it is up for sale. In pursuing a Short Sale vs. foreclosure, the homeowner will also have the satisfaction of knowing they tried everything possible to fulfill their obligation to the Lender on the money they borrowed.
Q: What is the process?
A: First you present a client to us as a referral. Next, you complete an in-house listing agreement. We will then set an appointment with the client to discuss our process and have them sign Fresh Start property disclosures. We will then write up a purchase contract for you to present to your client. We then take all paper work to the bank and begin negotiations.
Q: What do I have to do?
A: You will do the listing paper work, assist Fresh Start to get any financial information and paper work required by the lender and you will present Fresh Start's offer to the client. Last thing is go to the closing table to pick up your check.
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Q: How much is this going to cost the homeowner?
A: Not a penny! There are absolutely no fees or costs to the homeowner.
Q: What about my commission?
A: When you work with us, you will earn your full 3% listing commission and retain your listing. You also have the opportunity to sell the property at a lower, more competitive price and earn the 3% selling commission too, for a total of 6% commission.
Q: How good are my chances to receive my commission?
A: We are successful completing the process over 80% of the time, while MLS statistics show that Realtors average less than a 20% success rate.
Q: Is there any other benefit for me?
A: In addition to receiving a full 3% commission for simply listing the property, if you bring the end buyer, you will also receive another 3% (6% total). Any leads generated from this listing that do not have agent representation, will be given to you so you can work with them to sell them a home. In addition you get “piece of mind” and a good reputation for doing what's right for a client that has no chance to sell their home in a traditional way.
Q: What is the time line for the short sale to be completed?
A: Each lender differs based on their internal processes and work load. That being said, our total process averages about 4 months.
Q: Why shouldn't I attempt the Short Sale myself?
A: Short Sales are an incredibly long and arduous process. You can spend hours and hours gathering and submitting paperwork and on hold waiting to hear from any number of committees. In order to be successful with Short Sales, you must devote a huge amount of time to them. In this market, the last thing a real estate agent needs to be doing is sitting on hold with Countrywide instead of focusing on listing and selling properties
Q: How much legal knowledge must I have to do a short sale?
A: We are not attorneys, but the legal knowledge needed in Real Estate Law, Foreclosure Law and Bankruptcy Law is extensive. The cost to learn this information from qualified attorneys would be very expensive. If you do not know this information, you can do a large disservice to your clients and put yourself and your broker in harms way by offering incorrect advice. We already have gained this knowledge required to protect you and your clients.
Q: There are other short sale referral agents, why use Fresh Start?
A: Other agents wait and wait for a buyer that may never come. FRESH START IS THE BUYER!!! Our very experienced, dedicated full time negotiator starts negotiating with the lender immediately after sign up.
Q: Do I get to keep client for future home sales?
A: Absolutely, we are providing a service for this transaction only. We have no interest in future home sales with the client and there will be no solicitations to them.
Q: Are there any banks or clients you won't work with?
A: We do not work with Bank of America (or Countrywide) due to their internal processes and inability to negotiate a short sale in a reasonable amount of time. Also, we may not accept a home valued below $75,000 but there are some exceptions to that rule. Every home should be presented to Fresh Start for evaluation.
Do you have more questions?
Call us at (513) 489-5333
and we’ll be happy to answer them.
