Short Sales, Pre-Approved Prices and Never Quitting on a Client

6 Questions Answered by a Short Sale Expert

Heather J. Keller, licensed Realtor with The Keller Group @ Charles Rutenberg Realty of Illinois has offered her years of experience to answer these questions.  

How do you get a pre-approved price on a short sale?

I don’t get a pre-approved price on every short sale because of the excessive amount of work it takes to complete a short sale packet.  Every situation is different. For example, if there is an auction date on a property and it is an FHA mortgage, I will start the process ASAP to halt the auction date process. FHA is tricky because it has to go through a complicated “waterfall process”, meaning the seller must complete a loan modification process, regardless of whether or not they want to sell. Knowing the timelines associated with the various types of loans is vital to the short sale process.

How do you value a property? What happens to the price when they sit on the market?

I start the listing process with current comps from the local market. Bank appraisals/BPO’s last around 120 days, so if the property is on the market past that, the bank will order a new appraisal. With my experience, I can more easily estimate values at where the banks will likely land on a number. However, I have done value disputes on BPO’s that I think come in ridiculously high.

When do you call it quits on a listing?

I never call it quits until it has been foreclosed on and there is nothing else I can do. I have carried listings for over a year! But truly, every deal is different. It depends on the mortgage, the lender and where it is in the foreclosure process. There is a lot involved!

The homeowner owes back Housing Association fees-how does this affect the short sale?

Back owed HOA payments are a nightmare. I rarely accept a listing that has this offense because the HOA is more difficult to satisfy than a bank loss mitigation department. Usually, the buyer will be forced to pay the fines on the outstanding debt on HOA and it can rack up fast.

How does a bankruptcy affect a short sale?

I always have my clients work with an attorney because I cannot offer legal advice. However, filing for a bankruptcy with an attorney can work in the homeowner’s favor. For example, if the property has a pending Auction date, filing for bankruptcy halts the timeline. A bank is unable to move forward with a foreclosure while a bankruptcy is in progress. Filing for a bankruptcy can also give the homeowner extra protection against a deficiency judgement, in addition to the extra time, to get their home listed as a short sale.

What is the process of foreclosure?

The State of Illinois has a specific time frame. This information is on the Neighborhood Housing Services of Chicago, Inc. website:

http://www.nhschicago.org/site/3C/category/foreclo...

First missed mortgage payment-mortgage is past due

30-60 days late: the homeowner missed 2nd payment, the lender calls the homeowner.

60-120 days late: the homeowner missed 3rd payment. Lender sends the homeowner a notice of intent to foreclose and contacts its attorney to initial foreclosure proceedings. At this point, the foreclosure becomes public record. Solicitations may begin to arrive to offer the homeowner help.

120-175 days late: The homeowner is served with a summons by the sheriff or a process server. A public notice is posted to the newspaper. The homeowner has 30 days to reply.

60 days after being served: if the homeowner does not answer the summons, a default motion is filed and a default judgement is entered against the homeowner.

90 days after being served: The homeowner’s right to reinstate their loan expires.

7 months after being served (or 3 months after judgement, whichever is later): Homeowner's right to redemption expires.

15 days after sale: Order confirming the sale of the property and order for eviction is entered. Order for eviction is stayed 30 days (gives homeowners 30 days to move).

30 days after order of sale entered: Order of eviction goes to sheriff. Homeowner is forcibly evicted.

Total: 15 months

Visit http://www.nhschicago.org/site/3C/category/foreclo...

Where can I go for more help on short sales?  

Message me on BP, leave a comment below or email me at [email protected].

Got more questions?

The Keller Team @ Charles Rutenberg Realty of Illinois works across the Chicagoland area helping distressed property owners and closing over $8M in annual sales, with an 95% average close rate on their short sale listings. They also volunteer at various local events, offering their expertise in a Q&A format, for any struggling homeowners. 

Visit them on Facebook under The Keller Group. Deals are posted daily The Keller Group @ Charles Rutenberg Realty of IL Facebook Group.  

Agents-need help with a short sale?  Contact us today for details on how we can help.

Investors-Have you listed a short sale or bought one this year?  Think a short sale could be a good fit for your investing portfolio?  Find out today!  

Fox Valley Investors is on Facebook, too. We post deals, meetups and information for investors. Fox Valley Investor Group.  Connect with me here on BP or my Wordpress site, Elgin Fox Valley Homes For Sale