Short Sales in Las Vegas

About Short sales in Las Vegas and Henderson Nevada

Tell Max what you are thinking of Short Selling here NOW!

Prudential Americana Group, Realtors®
Max Schmidt P.C. dba Max Schmidt
Broker/Salesman
871 Coronado Center Dr., suite 100
Henderson, Nevada 89052
(702) 334-2200

Short Selling Las Vegas Real Estate

There are many ways to lose a house but signing away ownership in a manner that destroys your credit, embarrasses your family and strips you as an owner of dignity is one of the hardest. If your a home owner who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of these options is called a "short sale."
With the increase in foreclosures lately you may have heard the term “short sale” and wondered what it was. A short sale is when

the lender will accept less than the full amount due on a mortgage when a property is sold. Usually, the lender will accept the
short sale to avoid the time and expense of a foreclosure.

When you the borrower are in default on a mortgage you not only owe the back payments but also may owe late fees, property inspection fees, attorney fees, etc. This can add up quickly to eat up all the equity the you have in the property. And with real estate values dropping here in Las Vegas you may have no equity or actually own more than the property is worth. If you are unable to bring your account current the lender will then foreclose. With a foreclosure, the lender can lose up to 40% of the mortgage amount because of the extra costs involved with foreclosing on a property: attorney fees, court costs, lost interest, eviction costs, property maintenance costs, and selling costs. Therefore, it is sometimes in the best interest of the lender to accept a short sale.

It also can be in your best interest as the borrower. You will not have to endure the time and stress of a foreclosure and your
credit may not be as adversely affected as it would with a foreclosure. It is quicker and easier and does not subject you to the embarrassment of a foreclosure.

Perhaps right now you are not late on any payments but have just received a notice in the mail that your payment is going up and you cannot afford the increased payment. You are still a candidate for short sale.

Or perhaps you find yourself in a position of having to make the choice of making your mortgage payment or providing for your basic needs such as medication, food, utilities, etc. You have a way out through short sale with dignity.

In many cases within a few years you may once again be able to have good enough credit to purchase a home. With foreclosure or deed in lieu you may have a major blemish on your credit report for up to 7 years which could adversely affect any loan or credit card interest you may now have or acquire in the future.

The I.R.S. considers debt forgiveness as income except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007 which was passed by congress and signed into law. This new law was passed to relieve home owners who are short selling their primary residence of having to claim the loss as taxable income. Be aware that in investment homes, 2nd homes and some other situations the deficiency may still be considered income. As a real estate agent, I am not licensed as a lawyer or a CPA and cannot give you advice regarding all your financial consequences.

In a short sale you will need to prove to the Lender that you can no longer afford the property. Remember when you applied for the loan with the lender you probably needed to prove your income to be approved. Now you must go through the whole process again to prove you can not afford the loan. This is required by the banks to insure that just because the value of real estate has gone down in Las Vegas it is not an excuse to not honor your financial obligations if you have the ability to do so.

So what steps should you take to determine if Short Sale is for you?

#1 Call the Lender

The first thing you the borrower should do when you can no longer afford your payments is to contact the lender immediately. The last thing a lender wants to do is foreclose on the property. Lenders typically have departments that work with people who are behind on their payments to resolve the situation. If you cannot resolve your situation with the lender then give us a call. In 2007 less than 20% of people facing foreclosure were able to resolve their situation through the lenders workout departments.

A sure sign your lender is not going to work with you is a foreclosure notice. If the lender has sent you a foreclosure notice Call Us Immediately as your time is running out quickly and will require quick and decisive action.

#2 Call Max

We will discuss the results of your call with the Lender and help you determine the best course of action for you to follow. During this call we will be asking you who your lenders are on 1st and 2nd mortgage and how much you owe to each one.
Based on the course of action we agree on, we may send you a package of information for you to complete. This information will be essential in us moving forward with our plan for your situation. Without your thorough completion of this package we will NOT be able to move forward. Please complete this package ASAP so that we have the best possible chance for your best possible outcome.

Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.

#3 Our 1st Meeting

At the time of our first meeting I will need you to provide me with the following. I will be sending a package over prior to this meeting but I want you to know now what I will need you to supply me with. These documents will be required for all borrowers on the mortgage.

1)       Copies of the most recent mortgage statement(s).
2)       Copies of your most recent tax return.
3)       Copies of your two most recent pay check stubs.
4)       Copies of your most recent bank account statements covering 2 months.
5)       A letter, written in your own words, outlining the facts associated with the hardship that caused your financial distress and what options you have used to try and improve the situation. This letter should begin with the words “I can no longer afford this property because…..”
A)-what caused your tight financial position.
B)-what assets if any that you may have
C)-what future problems will occur if action is not taken soon, i.e. bankruptcy, foreclosure, etc...)

6)   Complete the financial statement included in the package I send over to you.
7)    I’ll need a copy of the key to the property (this will be placed in a lock box on the property)

I may be previewing the property and take some pictures. Please DO NOT clean up or make ANY REPAIRS to the property other than emergency repairs.

During our time together I’ll explain more about what to expect during a short sale transaction and how I will guide you throughout this process. You will be updated every step of the way. When we meet I’ll answer any and all questions you may have.

#4 Submit Letter of Authorization for Max to talk with the Lender

Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with Me, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk
with me and my staff about your loan. The letter should include the following:
o Property Address
o Loan Reference Number
o Your Name
o The Date
o Max’s Name & Contact Information

Some lenders require this authorization to be on their specific form.

5# Preliminary Net Sheet

This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. I will be preparing this for you.

6# Hardship Letter

I mentioned this in the documents you will need to provide at our first meeting but it is worth mentioning again as this is a VERY important document.

The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior. Be honest but always start your letter with “ I can no longer afford this property because…”

#7 Proof of Income and Assets

It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.

#8 Copies of Bank Statements

If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.

#9 Comparative Market Analysis (aka CMA or BPO)

The Las Vegas real estate market has declining property values. This is a part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Often the lender hires someone to do a Brokers Price Opinion (BPO) this is basically the same thing as a CMA but paid for by the bank to protect their interests.
I will prepare a CMA for analysis, which will show prices of similar homes:

o Active on the market
o Pending sales
o Solds from the past six months.

#10 Purchase Agreement & Listing Agreement

When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement.
Be prepared for the lender to renegotiate and to refuse to allow payment of certain items
such as home protection plans or termite inspections.

Now, if everything goes well, the lender will approve your short sale.

As part of the negotiation, we might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request. I may be able to help you with additional information and contacts in aiding you with the removal of any adverse credit reporting.

Completing a Short Sale successfully is a complicated task with involved strategies to get your property sold in the shortest period of time possible. It requires a real team effort on both our parts to complete this successfully.

If you are unwilling to do the paperwork then please consider other options as the time and effort on my part is an immense investment. But if you really are interested in doing the work and trying to save your credit so that you can move forward with your life, I stand ready to help you.

We will cover simple, understandable information that will show you the path to helping you to get your house sold in the shortest time possible while giving you a way out from under the debt burden that you can no longer sustain.

We look forward to meeting you and going over this exciting information especially tailored to your situation.

Now I have one more suggestion. You probably know a co-worker, friend or family member that this information would be helpful to. Please get this information to them. Help them to understand that there are options other than total financial ruin and give
them the opportunity to make better financial decisions in this difficult real estate and mortgage market.

So now its up to you. If you would like to discuss Short Sale and the possibilities it holds for you then give me a call now.

I’m Max Schmidt

Las Vegas Real Estate:

Back to Las Vegas real estate

Las Vegas Real Estate News

Search For Homes

New Las Vegas Homes for Sale Search

Video Library

Selling Your Home In Las Vegas

Buying Las Vegas real estate

Las Vegas Neighborhoods

Upgrading your Las Vegas home

Investing In Las Vegas Real Estate

Las Vegas Vacation Homes

Las Vegas Luxury Homes

Las Vegas condos

Retiring in Las Vegas

Contact Max here NOW!