Selling Poinciana One Property at a Time.: January 2008

Short sales. It's not only up to the Lender.

This is the third part of my series on short sales. As way of disclosure, I am NOT an expert on short sales, I am using this series as a way for me to think through the process and hopefully become better prepared to help some Sellers who may qualify for a short sale.

A short sale can be a very complicated transaction. Not only are we negotiating with the Lender but there is another entity who may be involved as well....the Private Mortgage Insurance (PMI) Company. Most Buyers, that did not put at least 20% down when they purchased their property, were required to purchase PMI for the benefit of the Lender.

PMI protects the Lender for loses usually up to 20% of the loan amount. So, they have a say so in whether or not a short sale is accepted.

I am in the process of negotiating a short sale right now where I am actually negotiating with the PMI Company instead of the Lender. This is a first for me but so far it seems to be going well. The lady I am dealing with has been very helpful and she is the one that is handling the negotiations with the Lender. Have you ever done this before?

I'm very anxious to see how this plays out. Brian Brady wrote a very good post about this a few months ago titled "A Realtor's guide to PMI and Short Sales". Give it quick read.

Anyway, the point of this post is to make you aware of the fact that a short sale is a lot more complicated than just getting the Lender to agree to a price. The Lender is looking at the bottom line. If the short sale does not NET them more than a foreclosure then it ain't happening.

When meeting with potential Sellers you need to find out if they have PMI. If they do, then do the math. Brian is better at that than I am so if you haven't already....go read his post.

OK that's it for today. These are my thoughts. What are yours?

Other posts in the series:

A "short sale" is an option NOT an entitlement!

Becoming a better "short sale" expert. A series by Broker Bryant.

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Comment balloon 28 commentsBryant Tutas • January 15 2008 03:45PM
Short sales. It's not only up to the Lender.
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This is the third part of my series on short sales. As way of disclosure, I am NOT an expert on short sales, I am using this series as a way for me to think through the process and hopefully become better prepared to help some Sellers who may… more
Becoming a better "short sale" expert. A series by Broker…
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I've been spending a lot of time this week thinking about short sales. My market, Poinciana FL, is going to have a bunch of them this next year so I figure it's time to brush up on my short sale skills to see what I can do to help some folks out. &… more
A "short sale" is an option NOT an entitlement!!
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"Short sale". The new buzz word. We've all heard it: "I owe more than my house is worth and I WANT to move. I'll just ask the lender for a short sale. " "I don't want… more
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MARKET REPORT POINCIANA NEIGHBORHOODS SINGLE FAMILY HOMES 2007 (INFO COMPILED FROM THE MID-FLORIDA REGIONAL MLS SEARCH CRITERIA: ACTIVE 34758, 34759 SUBDIVISION POIN) 2007 MONTH NUMBER OF CLOSINGS AVERAGE SALES PRICE MEDIAN SALES PRICE DAYS ON… more