The “short” in short sale simply means that the amount paid at the sale of a property on behalf of the borrower for an outstanding mortgage is less than the amount owed. But there is nothing “short” about the process. In fact it should be called “long sale” because real estate professionals who specialize in short sale transactions are well aware that – patience, diligent follow up and a long wait – is the name of the game. Due to the increasing numbers of distressed homeowners, there has been an upsurge in the number of potential short sales available to real estate agents. Many of these homeowners need someone to negotiate their short sale once they have decided that it is the best option for them to use to avoid foreclosure. The sheer amount of documents to be prepared as well as the time spent on the phone going back and forth with lenders makes investing in a Virtual Assistant (VA) a strategic decision. Now, “How can hiring a VA ensure that each short sale negotiation is carried out more efficiently and effectively?” To answer this question, let’s go through the entire process and then point out crucial areas where a virtual assistant can complement the agent’s efforts.

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Foreclosure as we all know is very awkward situation for anybody who is strangled in this economic crisis and to get out of this an expert advice from short sales expert will be the best decision to go with. We all know the current economic crisis has gripped many home owners who have been not able to pay their installments and got foreclosure notice. With flat fee listing of as short sales property it can definitely help us to avoid the embarrassment we can face. Let’s understand how short sale experts can help us to get out of this with flat fee listing.

Foreclosure is obviously a sad situation for home owner who is not able to pay the monthly dues to the lender resulting in notice. These cases have increased enormously in this economic crisis. For some this has happened due to loss of job or closure of business or over the head medical expenses. But there are ways to avoid foreclosure and short sales is the best option which can be understood and implemented with the assistance and guidance of experts. Experts will help you understand the pros and cons. They will also let you understand the advantages when you list your property in flat fee listing.

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Research by Moody’s Economy.com predicts that in 2009 1.8 million borrowers will lose their home to foreclosure. This figure rises from 1.4 million homeowners in 2008. Moody is a leading independent provider of economic, financial, country, and industry research. Moody attributes the increase in foreclosure rate to the rise in unemployment. At the start of the housing crisis in 2007, the unemployment rate was about 4.6%. Last month it reached 9.4%. Many believe it reach 10% by the end of the year. This unemployment figure does not account for those self-employed individuals unable to collect unemployment, those that have a reduced wage, and those that have not given up. Other experts believe the true unemployment figure to reach closer to 15%. In San Diego unemployment is predicted to hover around 11-12%

As the start of the housing crisis, homeowners that had subprime loans were the first to lose their homes. Now unemployment is the biggest factor driving foreclosures today. “It’s a much harder nut to crack, unemployment,” said Mark Calabria, director of financial regulation studies at the Cato Institute. “It’s much easier to bash lenders than to create jobs.”

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A short sale is the sale of a property by which terms the mortgage lender agrees to accept a loss on the repayment of his loan.When a property owner has ceased to pay his periodic payments, then decides to sell, he might find out that the market price of his property has declined in such a way that, not only he has no equity, but his debt is higher than the present value of the real estate.If the seller can pay the difference, the lender and any other creditor would then be paid in full and the sale completed normally.

If he cannot afford to pay the difference, the mortgage lender, to avoid foreclosure and more damage, has the option to absorb the loss and go along with the sale, avoiding a foreclosure that will possibly cause larger losses.Usually the seller will put his property for sale and once an offer has been made, he will submit it to the lender. An approval on the deal will be necessary and once obtained, and any other debt has been satisfied by the seller or the lender, the sale would be completed.Desperate homeowners initiate short sales procedures to avoid foreclosure, which is very damaging to their credit. Buyers look for short sales because they allow them to get a home at a deep discount.From a buyer point of view, it is essential to have some understanding of the whole process, to avoid a waste of time and even of money, by pursuing hopeless cases. All short sales do not stand the same chance of getting the bank or banks’ approval. Many of them will never complete, and some will need much more work to get to the closing table than others.

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When you’re browsing through your MLS Listings, don’t fall victim to the “approved” short sale hype. In this article, I will feature one very important aspect of purchasing these types of homes that will help you determine if a particular home is worth pursuing. I’ve seen home listings on MLS that say “approved short sale” for three, four, even six months…they don’t stay “approved” for that long. In order to capitalize on a property that is being sold for less than what the owner owes to his/her respective bank(s), you must cut through all the “smoke and mirrors” in order to make it happen. As a real estate agent, many times I will come across listings that say “approved short sale” and buyers will inquire about these properties. An approved short sale is when an agent, owner and/or attorney has submitted some form of contract or purchase binder to the owners bank for approval. Now one thing to keep in mind is, short sales are extremely complex transactions involving multiple investors and many levels of approval, not to mention, issues with the home itself. Issues like certificates of occupancy, surveys, title, and mainly, the sellers ability to fully cooperate in a timely fashion. So an “approval” is all relative to many items. That piece of information is important in and of itself. Basically just having the knowledge of all the different variables/obstacles can make the difference between wasting your time and being able to move on from something because it’s just too messy. But I promised one piece of information that will be helpful for you when evaluating an “approved” short sale listing.

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Nowadays, we continue to hear of troubling news of many families losing their homes to foreclosures. Many factors have been attributed to this woeful fact of modern life, all of which boils down to the global recession and its effects on buying power. Many, too, are looking at short sales as an option against foreclosure. However, before making any decision about your house, it is very important to increase your knowledge of both foreclosure and short sale.
A foreclosure is the legal process wherein the homeowner’s right to the real estate property is cancelled, usually due to defaults in payment of the monthly amortizations over a certain period of time. Said property is then sold at public auction and the proceeds applied to the debt. A short sale is the voluntary sale of the real estate property by the homeowner, with the consent of the mortgage holder, to a third party in which the sale proceeds fall short of the balance still owed on the applicable loan. This usually happens when both parties want to avoid the foreclosure process, which will involve heavy fees for the mortgage holder and poorer credit scores for the homeowner.
Both options will result in losing the house in question although other repercussions especially in terms of credit standing will differ. Unfortunately, there is no foreseeable benefit to foreclosure except maybe galvanize you into adopting better spending habits. A foreclosure severely and adversely affects your credit score, which can drop by as much as 200 to 300 points in one transaction. Furthermore, you have to suffer the consequences of your credit score being on a very low point for many years to come, thus, making it more difficult than usual to obtain new credit of any form. Worse, the mortgage holder can still ask for a court-issued judgment against you for payment of the foreclosure fees, amortization arrearages and interests thereon. A short-sale will only affect your credit rating by 80 to 100 points. And you can usually get your good credit standing in good shape faster than in a foreclosure – 18 months for short sale and up to three years in foreclosure. Also, it takes less time to settle things in a short sale, with lesser costs on both the homeowner’s and the bank’s part. However, you might still have to pay the balance of the principal loan plus interest although you can usually negotiate for more favorable repayment terms. Keep in mind, too, that a short sale is only possible when the bank and other lien holders consent to it, which in many cases, they will not.

There are thousands of foreclosed homes and short sales, there has never been a better time to get a great deal. But before you do here are a few tips because there can be expensive problems. Know what getting into before you buy a foreclosed property or short sale. Owners of foreclosed properties do not want to leave there homes. They can and do take there frustration out on the property. One property that was taken over by the bank found that 1200 gallons of cooking oil was dumped into the septic. The previous owner is currently under investigation for the incident but has not been charged. The previous owner had a bio-diesel company. Owners have removed toilets, sinks, damaged flooring and actually taken out widows. Properties that are empty can run into serious problems also, water damage, pipes freezing, mold, thieves, and rodents.

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There are many rumors out there and bad information on what is and isn’t in today’s market. This is when a lender agrees to take less than what’s owed on the property. Most people are amazed when they see that banks will negotiate debt when a property is inevitably headed towards foreclosure. Borrowers do need to prove some type of financial hardship in most cases. Many people tend to think that foreclosures and pre-foreclosure properties are the same, but that is not the case. On a short sale the borrower or person in foreclosure is the owner of the property. BANKS DO NOT OWN SHORT SALES. This can also known as a pre-foreclosure sale. The seller is participating to avoid a costly foreclosure from appearing on their credit ultimately, which can be very damaging. A foreclosure will report to a borrower’s credit and will have negative effects for quite a while, many say up to 7 years. They can also avoid deficiency judgments by negotiating a settled account on their credit. Banks do not like short sales, but they prefer them over a foreclosure.
Banks are not in the business of foreclosing on properties, but in the business of lending money. The costs of the foreclosure process, directly and indirectly, are what cost the banks money. As long as a borrower in foreclosure can show the bank or lien holder that they will net more money accepting a lesser pay off vs. going to foreclosure, the majority of banks in this market will approve the deal. In our current market this is another way to mitigate the bank’s loss. They will encourage this option instead of foreclosing on the property.

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