Short Sales...owners Credit...
First...would a bank be willing to do a short sale if a owner is not behind on payments? How far behind, on average, does the owner have to be behind before a bank will consider a short sale?
Second...what does a short sale do to an owners credit history? About the same as foreclosure?
Thanks in advance...
---The seller has to be at least 3 months behind usually.
---Your score tanks because of the late payment history, BUT, a short-sale is still better than a foreclosure. AND, if you want to get a property in the future than it will be easier to get financing with a short sale than a foreclosure.
I am in a similar situation but my bank will accomodate a short sale even though I am not behind on payments. I am debating whether I should stop making payments to my bank (I am still receiving rent) while I do the short sale process since my credit will tank anyway. Is this the wrong attitude? Is this legal considering I am still collecting rent (which still leaves $700/mo upside down).
I had some partners that ran up a visa to 7500 and a lease to like 15K.
part of the negotiated settlement was that the accounts would be reported as "paid as agreed", rather than 120+ late.
As anyone tired this is a short sale?
This topic seems to be debated all the time. I concur with Chris as far as "missing " payments. This is not a good option.
In addition, I am almost certain that a short sale will be reported to the credit bureaus as a serious delinquency/derogatory public record. This is according to Fair, Isaac Score Reason Codes.
This is the same code as a foreclosure.[ Edited by dpeeples on Date 07/07/2008 ]
Amazing!
Here’s some info from an experienced agent who does BPOs for lenders like Countrywide, Wells Fargo, Suntrust, Wachovia, BOA as well as companies that supply BPOs for investors before they purchase. Did our first one in 1997 so we’ve been around the block for a while.
Agents are expressly forbidden to talk to anyone but the lender client about valuations. If an owner/agent gives us a list of comps we smile, thank them and take them with us to the nearest trash can. Driving by, going inside and taking the pictures is just a minor part of the process.
BPOs have a certain set of criteria based on the specific banks/clients order. At the moment the most common are: 3 sold and 3 current active or pended. Date of sale no more than 6 months, prefer within 3 months. Some ask us to only use sold comps that sold in less than the average area DOM. Square footage of the comps within 15% of subject –some want 10% brackets. Age of construction within 5 years of subject. Distance from subject 1 mile but can expand in 1 mile increments. Similar style comps – capes to capes, ranches to ranches, 2 story to 2 story. Similar features – garages, basements, pools, etc. Below grade sf must be listed separately and valued as below grade which is a lot less than above grade.
If the BPO is ordered for a short sale or foreclosure process the comps must also be SS or REO sales. Distressed sale BPOs often include a FMV as well as a distressed value. Copies of property records with previous sales are provided. Comps have to bracket the subject meaning higher and lower sold/listing prices, larger and smaller sf, larger and smaller lot sizes, older and younger construction, etc., etc. Value range of the comps has to be within 20% of the value you give the subject.
Those are the highlights. Repair estimates, pictures of the property including damages, copies of the Comp MLS info including DOMs and price changes and analysis of current local market conditions are often asked for.
So, no its not the lazy agents out there doing BPOs. Most of the ones I know are the hustlers, are active in the market and are able to multi-task without losing focus.
We did over $20k worth in 2007 and looks like 2008 will be well north of $30k. Not a big deal but it does pay for our toys and some playtime. This is an adjunct income to our retail real estate business, our own investing and property management. Do you think I would jeopardize my BPO income by doing a half done job because some investor chats me up?
Jim
get a BPO or apprasial or CMA of you own. Fight fire w/ fire.