Naples Short Sales and Pre-foreclosure Sales

Many homeowners are facing the potential of a foreclosure action for many different reasons.  A possible solution is the exploration of a "short sale" or pre-foreclosure sale.  A seller needs to research and gather information prior to embarking on this endeavor.  You might want to seek the advice of a well qualified real estate agent with the skill sets and experience in several disciplines beyond just real estate listing and sales.

If you are thinking about a pre-foreclosure sale (short sale), selling or buying in the Naples, Bonita Springs or Estero areas this article is a must read!

• Ascertain the status of all your payments on all mortgages and assessments, and whether there are any judgments or other liens on your property. What are the balances? What are the arrearages? What correspondence have you received from your lender(s) or their attorneys?
• Have you been in cooperative ongoing contact with the lender? With whom?
  Have you discussed forbearance or a short sale with the lender’s "loss mitigation" department?
• Have you explored other alternatives with the lender, such as mortgage modification or extended payment terms?
• What is the nature and cause of your financial hardship? In negotiating a short sale, you will need to show an unanticipated, significant hardship occurring after you originally qualified for the loan and be able to prove it to the lender(s).
• Ask a real estate attorney to check your title at the clerk of court’s office where public records are kept, to independently confirm the mortgages and liens shown on the property and whether the lender has yet filed a foreclosure suit.
• As a seller a real estate agent should advise you they can market the property and assist in establishing market value for any short sale contract - but you should retain a knowledgeable attorney to negotiate with lender(s) and consult a tax advisor on the adverse tax consequences of a short sale, as most real estate agents are not licensed to practice law or income tax preparation.
• If you decide to proceed, be aware you will not net a dime, the listing price must be "reverse engineered", i.e. start with totaling loan and lien balances, and then initially determining if the market will sustain pricing in a range as high as the total loan balances. Don’t forget: Since quick sale is necessary, the listing price should be set at the very bottom of the current market.
• As a seller the real estate agent should request you sign an authorization allowing the real estate agent and any attorney representing you to contact your lender(s), obtain further information and act for you.
• You should have ready the following documentation for lender’s review - your employment and income records, bank statements, last two year’s tax returns, and proof of assets and debts documentation to prove your lack of income to make loan payments and lack of assets to cover the shorted loan balances.
• But avoid committing to a real estate agent handling any short sale negotiations for you with lenders. This is going beyond the scope of the real estate sales license and risks great liability.
  At the same time, be warned against possible approaches from alleged "short sale experts", most of whom at best have taken a quick get-rich-quick seminar and at worst can be unethical equity skimmers.