Archive for tag Short sales
April 19, 2011 at 02:24 AM · Posted under Colleen Kuchta
By now, you may have heard the term Short Sale. It is a term used in the news and real estate quite often. But what does it mean? Simply put, a Short Sale is a real estate transaction where the home owner owes their lender more money than they will net on the sale of their property. They will be short of funds to satisfy their mortgage. Because you cannot transfer the property to a new owner without paying the current mortgage, the lender must agree to take less money than they are owed. The seller is short in paying their mortgage, and that is where the term Short Sale comes from.
Short Sales can be a great way for a buyer to get a home for a lower price. The main problem regarding a property that is in a Short Sale position is time. There are quite a few items that the seller's lender will require before they agree to take the loss. Once all of the items are in the lender's possession, the file is sent through a review process. This process can take 30-45 days, or more. If a buyer is not pressed to make a quick move, a Short Sale can be worth their time.
If you are looking to make a move, and would like more information on Short Sales, please feel free to call or email us. We are trained in Short Sales and Foreclosures, and we are here to help!
The Kuchta's, Kelly & Colleen 414-651-1613 or 262-894-6512.
Posted by: 
Colleen Kuchta
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September 16, 2010 at 03:16 PM · Posted under Colleen Kuchta
I am writing this today to let you know that short sales are not always the nightmare we perceive them to be. We recently had a terrific short sale experience. We listed a property in Menomonee Falls at the price the market analysis suggested. After a short time, and several showings, it became obvious that the price needed to be reduced. With the sellers approval, we set the price to reduce at certain dates until an offer was received.
On July 14, 2010 we received an Offer to Purchase which our seller accepted. The count down began immediately! We had already gathered the items that Bank of America would require as part of the short sale package, so I sent them in with the offer. Our stage one negotiator was easily accessible via email, so I sent an introduction email letting her know who I was, and that I was happy that we were going to be working together. On August 5, 2010 we received the approval to move into stage two. Our request for a short sale was approved, but now the offer needed to be scrutinized before final approval could be issued.
Our stage two negotiator was assigned within two days. Again I sent out an introduction email similar to the one I sent to our first negotiator. There were a few papers to be signed by my seller, and more information was requested at this point. We knew that we needed to hustle to avoid a delay, so everything was submitted the very next day. On August 14, 2010 our Bank of America negotiator sent the approval with a September 13, 2010 close date. Our seller would be able to avoid a foreclosure!
Things did not get easier from here. As part of the approval we needed to get the buyer’s lender to provide a final HUD to Bank of America no later than 5 business days prior to closing. This would be no easy feat - recent changes in lending laws have been causing delays. Often times, approval isn’t issued until the day prior to closing. We needed everything in stone by September 3rd! Luckily, the buyer’s lender was on top of things. We sent our final HUD to Bank of America on September 3rd, and on September 9th we were told that Bank of America would also be willing to pay the special assessments and the outstanding water and sewer bill. Wow! We made the changes to the HUD and on Saturday, September 11th, we received our closing instructions. We could proceed to close on Monday, September 13th.
This short sale experience was most definitely a positive one. At the closing table on Monday, September 13th, my seller gave me a huge hug. She was so relieved that this part of her life could be put behind her. The quick approval and smooth process gave her a chance to move forward. We were truly honored to be able to help.
Remember, not all short sales are alike, and not everyone qualifies for a short sale. You need to select the listing agent that is willing to go the extra mile to ensure documents are sent on time, the line of communication stays open, and is willing to put in the time it takes to see the process through. This was a very quick turnaround, and that is not common. But, if there were a longer wait, we would have made sure to adjust to the situation. Kelly & I are fully trained in short sales and foreclosures, and have experience in handling both. Don’t you deserve an agent that can get the job done? Contact us today, and we will do all that we can to get you a brighter tomorrow. We are easily accessible by phone or email, just click on our names to access our website for our contact information! The Kuchta’s, Kelly & Colleen
Posted by: 
Colleen Kuchta
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March 23, 2010 at 10:18 AM · Posted under Colleen Kuchta
By now I’m sure that you have heard plenty of stories about short sales, and how they should really be called ‘long sales’. You may have even written an offer on a property that is in a short sale situation, only to be disappointed by the amount of time you had to wait for an answer.
Well, some of what you are hearing is true. There is a longer wait to have an accepted offer with a short sale. The owner of the property can accept your offer right away, but the offer is not binding until the lender gives the final approval. The wait for bank approval can take anywhere from 2 weeks up to 9 months, or more!
This does not mean that you should avoid all properties that are in a short sale situation. Your Buyer’s Agent can do a little bit of leg work before you decide to dive in with an offer. A call to the Listing Agent is a great place to start. Your Buyer’s Agent can ask a few questions like:
- Has the Listing Agent ever done a short sale?
- Are there other offers?
- Has the bank given approval for a short sale, or do they need an offer before giving that approval?
- Has the bank given a time-line as to how long they expect approval to take?
- How many lenders are there? (if there is more than one lien holder, that will slow the process)
Although there may be a longer wait, there are a few benefits to purchasing a short sale property. You can usually buy the home for a discounted price, and you can get away with a lower earnest money deposit as well.
Two more bits of advice: Be sure to include the Short Sale Addendum to the Offer (SSO) when drafting an offer. There is specific verbiage in the SSO that addresses the issue of bank acceptance and deadlines for inspections & earnest money. You should also try to set your closing date for 45 days after the date given for bank acceptance. This will give you enough time to get your home inspection completed. Remember that the sellers usually do not have extra money for repairs that come up during your inspection, you could be purchasing the home as-is. Some buyers chose to do the inspection prior to bank approval to avoid last minute surprises.
As always, if you have questions or need help buying or selling, give us a call! The Kuchta’s - Kelly & Colleen 262-894-6512 or www.thekuchtas.shorewest.com
Posted by:Colleen Kuchta
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December 18, 2009 at 12:39 PM
Short sales can mean big savings to savvy consumers. They also can result in frustration and failure. Pull up a chair for a story about one very disappointing short sale non-transaction.
A builder was facing foreclosure on an expensive spec home that he had had on the market for three-plus years. There were two mortgages on the property held by the same bank and totaling about $1 million.
In June, we were able to cobble together an offer from a very qualified buyer for about $150,000 less than the amount owed on the property. The offer, Seller’s financials and everything else initially required by the lender was promptly forwarded to the lender.
For almost two months we heard absolutely nothing from the lender, despite repeated calls and emails. Finally, we were notified that the file had been assigned to a “negotiator.”
Just when progress was being made, we were informed the FDIC had taken over the file for the second mortgage and they had assigned the note to a collection agency. This is nearly three months into the process and the Buyer was growing impatient.
We begin the negotiations anew with the collection agency with the same sort of mind-numbing multiple requests for already provided documents. After a series of back-and-forths (the collection agency refused to speak directly to the first mortgage negotiator, so we had to serve as intermediary for all communication) the first and second mortgage holders were a few thousand dollars apart on a settlement.
We were at a standoff. And a ridiculous one at that. The second mortgage holder stood to receive absolutely nothing if the property went to a sheriff’s sale, yet its representatives would not reduce their demand. The first faced additional expenses of a sheriff’s sale and holding the property but would not up their offer to the second. Meanwhile, the Buyers had grown weary of the entire process and had found another home.
The Buyers gave notice that they would be withdrawing their offer unless a resolution between the mortgage company and collection agency could be reached in short order. Again, there was no movement by either party.
You guessed it…the Buyers walked.
Two more months have passed and the house now sits vacant, deteriorating from a lack of heat and electricity. And no sheriff’s sale has been scheduled.
I can’t imagine a worse outcome. Eventually, the first mortgage holder will take over the property. It will either have to hire someone to restore the home or sell it at a steep discount. Remember, this is a house that had been marketed for more than three years without attracting an offer, so a quick sale is highly unlikely.
Meanwhile, the second mortgage holder (a.k.a. you and me, Mr. and Mrs. Taxpayer) will lose about $200,000. Municipal taxes go uncollected. A neighborhood of expensive homes suffers because of the neglected property and its eventual sale at an extreme discount.
The FDIC’s representative however took it all in stride. When informed the deal was falling apart, his response: “Oh well, that’s one less file on my desk.”
Posted by:
Steve Bauman
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