4 Questions (and answers!) About the Homebuyer's Tax Credit

Somethings in Real Estate can wait but getting a move on with the HOMEBUYERS TAX CREDIT cannot wait. So, this is a timely message for all of you home buyers that have been doing my favorite exercise. . . Procrastination. I have addressed this before but thought since time is running out for this great savings, I should bring it to the forefront again. As I always do I am going to answer some ACTUAL real life questions that people have brought to my attention and have consulted other legal resources for my answers. (Federaltaxpayerscredit.com)

Q. What if you have already owned a home or you are married and your spouse has already owned a home, can you qualify?

A. This is a big misconception that people have when you talk about the First time homebuyer credit because YOU CAN qualify even if you have already owned a home per the “Economic Recovery act” definition is as follows:

“The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.”

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter.

Q. What if you already have a partnership in a vacation home can you still qualify?

A. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer. This is a big question I have gotten from many people and the answer was quite surprising to me as well. What a great surprise!!!!

Q. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?

A. The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous “credit” was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

Q. How about short sales at this stage of the game? Should I buy a short sale or a foreclosure?

A. Now that could be a whole other article. Let me preface this by saying. . . “don’t shoot the messenger!” All short sales are not inherently bad, but I would at this point ask your Realtor if it is possible to close in time. It may be a risky venture for a home buyer and they should know the time frame going in. Most foreclosures are not complicated and can close in a timely fashion so they should be just fine. Again seek the consult of your trusted Realtor and lender, and they can help you with this on a case by case basis.

A big thing to remember that makes this so wonderful is that this is NOT a deduction, it is a CREDIT meaning that you actually get the check up to $8,000 if you qualify. You may use the money as you see fit. You may want to pay yourself back for the down payment or closing cost or you may purchase a home that needs a little face lift. You DO NOT have to justify your expenses it is your money to spend. Another huge bonus is that in addition to this money you also will be able to take a tax deduction for interest payments.

So now that you know and you have just enough information to get excited, give us a call and we will send you a Reference guide to the “Economic Recovery Act of 2009” You can also call your lender and he will help walk you through this process but you only have until November 30 to close so. . . on your marks – get set – GOOOOOO.

4 Common Questions About Short Sales

Not only have I gotten phone calls about short sales this week but I find myself struggling over interpretation of short sale protocol. So many questions and so many varying answers it is hard to determine what the exact course of action should be. A customer called me tonight concerned that her short sale offer was going to be bumped by a higher offer, but according to all that I am reading and studying her offer should be the only offer on the table at the time. Any other offers that come in should be considered back up offers and will only be addressed when the first signed offer is disposed of. This week I am going to answer some pressing questions that I have been presented with and will do so with the help of our good ole FAR guidelines and MLS rules which I need to add are still our benchmark.

Q. What is the short sale addendum and what is the ruling force? And, furthermore, this form or our MLS and FAR guidelines?
A. If you have done a short sale or if you know someone who has then you know you will be asked to sign a FAR Short Sale Addendum that says the seller may “accept other offers and submit them to the lender.” This does not mean that all offers are presented at the same time and the bank chooses the best one. According to FAR the addendum is designed so that the seller may continue to solicit offers and hold them in a a back-up position. The contract on the table is considered complete other than the contingency of lender approval with seller acceptance. Another important protection in the addendum is the pronouncement that the sale is contingent on the seller agreeing to the lenders conditions.

Q. Why does a potential sale show up as contingent instead of pending in the MLS?
A. Although the contract has been signed by the seller and the buyer it is considered contingent upon lender approval. It will become pending once the bank has accepted the short sale and the usual closing procedures such as appraisals and inspections begin. Our MLS rules and not the addendum give us Realtors our direction in this matter. There is still debate among Realtor sometimes on how to apply this rule.

Q. What is the purpose of a back up offer and are they worthwhile?
A. There was a time in the market that people would fight over a property so back up offers were used quite frequently and now they are used again but with a different end in mind. Because of the precarious nature of short sales a back up is a great idea because many times the buyer gets leery of waiting and decides to move on to something more reliable. I have had more sales fall out in the last 2 months than I have had in all my years of being a realtor. For this reason I love a back up offer and so does your seller and the new buyer is delighted as well.

Q. How reliable are the Realtor Remarks in determining what a lender will take for a short sale?
A. I will say a big hardy NO to that one. Keep in mind that Realtor remarks are put in when the listing was taken and many things can change in the course of a listing especially a short sale listing. It is almost impossible to know up front what a bank will take until they have already gone through the process with another offer. Your best bet is to call the Realtor and ask her questions about her ideas of what a reasonable offer would be based on offers turned down and her assessment of the market value. Many times you do not have a handle on the price that a bank will take until they do their own BPO (brokers price opinion). Many times prices on Short sales are really abstract in that no one really knows what the “loss mitigation “department will take.

I love how real life keeps throwing me curve balls and challenges to be met each week. Please be patient with your Realtor as she helps you wade these waters for they are uncharted for all of us and we are learning as we GROW!!! I am grateful that I am surrounded by some really smart Realtors that keep me on my toes so know that we are NO experts….. just hard working folks looking for the best way to serve our community and each other.

Why I Love Being A Realtor

This is not really a tip more an explanation of what I like about being a Realtor since we are kind of taking a week off from our normal show and articles. When I was a little girl my grandfather and my dad were contractors and later we had a Real Estate company right on Rucker Blvd. I was not a natural born Realtor and when my dad suggested that I become a licensed Realtor I stomped to a class at the college very grudgingly. Curt (that is what we called him) asked me to get my license so I could do more than work on just our family owned stuff. I think I said something sweet like “over my dead body” Well I am very much alive and I am really loving what I do and can’t imagine not doing it.

I want to add that my father was one of the sweetest men and all the people that worked for him just loved him. I tell you all this because I was the only one that he ever fired. Somehow he did not think that I should get paid for filing my nails and going to lunch at the Mexican joint down the road. My father has been gone for years and somehow I ended up full circle but this time I am doing it with great joy and there is rarely time to file my nails.

I love being a Realtor and I have a problem knowing when to shut down the computer and my” Crackberry “and call it a night. I have met some of the most interesting people and had some of my most amazing challenges in this career. I laughed and got a little aggravated when a person blogged on one of my articles suggesting that she would love to know how much a Realtor makes by the hour. That is a number I really do not want to know!! What I do know that like many of my Realtor friends I get a thrill out of studying the market and seeing what is sold, pended and back on the market and all those wonderful price reductions. It is a thrill to meet new people all the time and be a part of their first home purchase or help them sell a home to move up to their retirement or dream home. In today’s market it is not so easy but it is satisfying when you help them sell that short sale that takes a load off their mind and their pocket book.

One of my favorite parts of this business is that it is always changing and if you are wanting a job that is never dull then this is the gig. I love my fellow Realtors and in spite of what you may think… most of us really like each other and we get a big rush to help our fellow Realtor. I love it when a Realtor calls me to ask me things about Wild Heron because I happen to know and love that place and they do the same for me when I travel into uncharted territory. A good Realtor is one of the hardest working people I know and learning to work with delayed gratification is a must in this profession especially if you have to have the green reward. Sometimes my reward is someone calling me up and thanking me for helping them find their home and how much they love it and many times the reward is just knowing that I am doing what I love to do.

I have a motto that I really strive to live by and you will see it on everything that I write and it is….”The only people we have to get even with are those that have helped us” My list is long and I hope yours is too. I used to wonder if I could make a difference by being a Realtor or maybe I needed to be someone in a field that was more giving. I have found that I can make a difference and this can be my mission just like any other. So I want to end with a heartfelt thank you to all my customers and all my Realtor friends and my precious people I work with that make this such a fun and exciting career. Thanks for watching TheBeachShow.com and Jason and I will be back in full form next week.
In the meantime, “I have to go file my nails”

Who Really Qualifies for a Condo Loan Anyway?

Okay let me clear this up from the very beginning – I am not a loan expert nor do I play one on TV, but these days that would be a great idea. I have had several customers come to me wanting to purchase a condo and they assume that BECAUSE they have great credit and good income then they are good to go. Sometimes they even have a pre-qual letter and they really feel good. Well not so fast. Lets talk about the real skinny about who can get a loan and what they can buy with it.

I rely on the good wisdom of some really good lenders here in Bay County which brings me to one of the most important points. In MOST cases when buying a condo it would be best to use a local lender who is familar with the local market. While we are on the subject of Local a local appraiser is another vital part of the deal. So much has changed in the last few years and even more so in just the last few months. Because I am not a loan expert I am going to address just a few of the issues surrounding loans on condos in Florida. I hope to give you just enough to have you running to your local lender for the rest of the story.

In speaking to one of my favorite Bankers today he shared that back in the good ole days (creative license) that loaning money to folks was like a 3 legged stool that was income, credit and assets. If you had 2 of the 3 then most likely you were good to go. Now we throw a whole new monkey wrench and there are many more issues to consider. First you must have all 3 to get you started. Sounds like the way we used to borrow back in the day when you really had to make the money to buy the deal. What a concept?

One huge difference is that just because you have all 3 it is important that you find out if the condo that you are getting excited about is an approved project for that bank. Many banks take into consideration the saturation of loans in one condo complex, lack of people paying their dues and maybe even litigation issues to determine if the project is loan worthy. So not only does the customer need to be loan worthy so does the condo!!! In addition the bank will evaluate the building , it’s finances, and market conditions for your area.

So now your are feeling confident we have passed the first test and then the lender wants to know, “Is this your primary home?” “Is this your second home and vacation spot? Oops you say your primary home is just a few miles down the road??? Now the scariest question of all… Is this an investment property? Again in speaking to my various lender friends there is no such thing as investment loans on condos today. You will need to use the green stuff.

Another issue that many find discomforting is the fact that there are no longer just good old conventional fixed loans for condos and the amount needed to put down is greater and the interest rate higher. I have brought up more questions than answers but this should get you started with the questions you need to get answered by your favorite lender so you can buy that condo while the deals are great from your FAVORITE REALTOR.

I hope this does not serve to scare you away because there have never been so many deals and so many choices for the buyer it just means that lending is now a much more conservative and intensive process. I encourage you to find a lender to work with so you can be ready for those deals when they come up.

11 Reason's Short Sales Take FOREVER

One of my friends had a customer that is demanding for the bank to hurry up and get the short sale done, they are tired of waiting. I bet I am hearing some hearty “Amens” from all my Realtor buddies. And also as life would have it I called my short sale departments to see how my little short sales are coming along so I can report back to my apprehensive buyers. As in most things in life there is a flow to it, a cycle that all things go through to reach their peak or completion. So it is with a “short sale”. Please know that this is straight from a company that I am working with and I am NOT going to name any names. I have had a couple of easy ones but generally it has been taking from 3 to 6 months to get an approval to move to close.

Seller decides he can no longer make payments so he list property with you and gives you an approval letter to speak to his lender. He gathers all of his financials, his budget, his taxes, his last 4 months of bank statements, and his hardship letter. You send all of this in to the bank and you wait and you wait and you wait.
NOTE: it will many times take days before your authorization letter gets to where it needs to be. (this is the easy part)
You are enthusiastic and excited because you get a buyer and grateful that buyer and seller have agreed to the short sale price and you have signed all the forms and additional short sale addendums. You and the other agent try your best to brace the buyer and the seller for the long months ahead.
Offer along with HUD-1 and any other updated documents that the lender needs are sent in and the fun begins. I have a great title company that helps me gather this information. (McNeese)
(Real life example) Contract goes into the company on April 7, 2009, you call each week and the lending company tells you that they are about 4 weeks behind on uploading documents to the system. You continue to call each week and they can’t find it and suggest you send it in again. You get excited because a BPO (Broker Property Opinion) is ordered somewhere along the way.
Now to make it real fun I forgot to tell you that there may be 2 mortgage companies to deal with so we do this times 2!!!! The first mortgage company now tells you that they are close to getting their deal approved and they ask for explanations of customers finances and additional documents that you send in with a gleeful heart. They also inform you that while they are maybe only a month away from completion and it is now June 25 they let you know, oh by the way. . . we want you to call the other mortgage company and tell them that although they are owed over $200,000 on the second note that they will be glad to give them $3,000 of the dollars upon close. The first mortgage holder wants the Realtor to get something in writing from the second mortgage holder. . . now it gets real fun.
(Real life example) Keep in mind that although the buyer knows they need to be patient, it is hard for them and they wonder what in the world is anyone doing. . . is anyone doing ANYTHING? ???? On June 25th second mortgage company informs you that the contract that you sent in on April 7 was opened and reviewed for real on June 15th and by June 24th it was finally in the hands of the FIRST PHASE negotiator. Keep in mind that although first mortgage is almost finished we have to wait on the second. Meantime fees are mounting if the buyer is behind on payments and they usually are.
The first phase negotiator will keep it approximately 15 days to make sure all documents are there that are needed and of course it has been awhile so they need to be updated so you gather the needed paper work and send it in again.
IF all is well the file now goes to the SECOND PHASE negotiator who has 30 days to review. If he finds all things well, the file now travels to the investor.
IF all is well now the investor has from 2 to 30 days to review the file..
Shortly before close they let the seller in on what they are willing to do for them in the way of accepting a lesser amount owed and what the seller contribution needs to be and if all is agreed upon then we all move to close. Oh and one more thing the lender expects the Realtors to take a reduced commission and they do and they all live happily ever after.
If the lender and the seller do not agree and if the buyer gets tired of waiting then it is back to the beginning of the short sale life cycle.

This sale portrayed in my “real life example” is projected to have an answer according to the second mortgage company around September if all goes well. So thus the life cycle if all survive it will be approximately 6 months!!! My purpose in sharing is not to discourage but more to bring attention to the fact that a short sale is anything but short and the more inventory that is sold this way the more difficult it will become. There are no short cuts (no pun intended at all) so just take a deep breath and be very kind to anyone involved in this adventure. I am actually enjoying all that I am learning from this and if patience is not your virtue it will become so. I left out some of the duties that a Realtor will do along the way because my main focus was to let the consumer know why it takes so long so that you can just sit back and enjoy your life while the lenders, Realtors and title companies are working the deal.

The Secret of What Your House is NOT Worth – Revealed

Most of us Realtors face this at one time or another so I think we need to bring it out in the light. How in the world do we price the home correctly without sending the seller running screaming down the street right into the arms of another Realtor? I already told you last week that a fellow got really mad at me when I told him what I thought his house would sell for. One minute I was the bearer of information that he wanted and the next I was an enemy to be reckoned with and I suspect I am not the only Realtor who has had this experience lately.

Continue reading “The Secret of What Your House is NOT Worth – Revealed” →

The Secret of What Your Home's Worth – REVEALED

I, like many other Realtors, send out a postcard when I sell a property proclaiming my excitement in hopes that someone will give me a call. Thankfully most of the people are sweet and just want some information, mostly on the value of their own home in that neighborhood and I am tickled to give them that information. This week I made a mistake. Although I knew better, I let a man convince me to give him a value of his home with only a little information. He was determined that I tell him what his house was worth sight unseen with little knowledge of his home other than the number of rooms and the year it was built. I kindly calculated what I thought it would be worth based on the homes that I know that have been selling and provided him a range of what I thought was reasonable. Apparently, I was WRONG, he did not like the number I gave him so that brings us to this weeks tip.

There are some things that your Realtor must know in order to give you an accurate value of your home. Doing it blindly over the phone is not the best bet and keep in mind it is every one’s best interest that she give you the right value. Realtors do not get excited about listing property – they love to sell it.

Location: We have heard that one forever and it still remains one of the key factors in determining a homes value. For us at the beach, location to the beach and whether it is near a dedicated beach with easy access is a great factor as well. Also important is how many homes in your area are for ssle? How many are foreclosures? What is the general condition of the area? Are there high association fees in your area? If you live in an area with few houses for sale then you have a better chance typically of selling your home so make sure you ask your Realtor about the level of inventory in your neighborhood.
Design, square footage and lot-size are all important to determine your homes value. Generally your Realtor will do a FREE Market analysis that will give you statistics of what the homes are selling for in your area and how long they have been on the market. If she is an active Realtor then she can give you a very good opinion of what your house will sell for but remember an estimate over the phone leaves her lacking vital information. PRICE is important today in that there are certain price categories that garner the greatest number of buyers.
Loan availability and appraisals: Today more than ever it is important that buyers and sellers are aware if a property qualifies for a loan. Consumers are unaware that the type of property may determine whether a buyer can get a loan for that property. It is not safe to assume that if you qualify for a loan that qualifies the property as well. It is vital that you tell your lender what type of home you are considering and in the best case scenario have your Realtor send the mls listing to your lender that you are considering. Condos do NOT typically qualify in the same way a Detached single family home would and lots are an entirely different subject today.

There are many things to consider so please be patient with your Realtor and trust that she or he spends many hours working at her job and wants to provide you with good accurate information. Hey I did not even mention the economy because I figured you had enough to ponder for one week.

Of course I have to share the happy stuff as well because everyone that I talked to this week did not shoot the messenger. I got the sweetest note and flowers from a very kind lady that was grateful for me and that just made my day and made me think. . . I love this job I think I will stay.
Enjoy your week and be sweet to your Realtor!!!!!

New Home Buyer Tax Credit: 4 Things You Need to Know

You know I love to spread good news and you will find that this is NO exception. I hear a lot of talk about how awful the economy is and other complaints about the down side of life. Now I admit we are living in some challenging times. But out of challenge comes inspiration, motivation and great ideas by people who are thinking about what can be done instead of what can’t be done.

One of the exciting things that is happening for first time home buyers is a great way to get some money to help you with that thrilling first home purchase. Time is of the essence because you only have until December 1 2009 to take advantage of the New Home buyers tax credit.

So here are some of the questions that people are asking about the tax credit.

What exactly is a first time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the home ownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
Is there an income limit and what is it?
Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
How do I claim the tax credit? Do I need to complete a form or application?
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.
What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.

This is just one more great reason to buy a home right now. Prices are low, inventory is plentiful and you get a tax break to boot. What a country!!!!! Call your favorite lender for more details on how to get qualified for your new home today.

6 Short Sale Questions You Really Should Know

I usually let my real Real Estate life give me the inspiration for the article that I write each week. It makes me so excited when I find out that someone actually benefits from it so I hope that this one hits the mark as well. Lately there are more questions than answers so I thought I would take a minute to answer some questions that I get from customers in this ever changing market. These are actually questions from actual wonderful customers.

Q: Do you have to be a resident of Florida to do a short sale in Florida?
A: That is an easy one, and the quick answer is NO. Where you live is not important in whether you qualify, what is important is if you have a hardship or not. The thing that may be relevant to you is that if you are trying to short sale a property that is not homesteaded then there can be consequences. A lending institution can give you a 1099 on the discounted amount of the sale. I would suggest that you talk to an accountant about your unique situation. Many times you are already in such duress that the 1099 may or may not effect you much but again that is a question for your accountant.

Q: How long does a short sale take?
A: When I give you the answer you will wonder why in the world they call it short because the average time is 3-4 months from beginning to end. Patience and Persistance is the key during this long process.

Q: What in the world is that AS IS contract that so many short sales require?
A: Quite simply an AS IS contract is not like the old used car you drive off the lot and hope the engine does not fall out before you get home. An “AS IS with right to inspect is a contract that gives you the right to inspect the property to see if it will fit your needs without breaking the bank. There is a time limit which you specify in the contract but in Florida any buyer has the right to get out of the contract and get his earnest money back if the inspection is not acceptable to the buyer. MOST foreclosures and Short sales require an “AS IS” contract. Be sure to check the laws of your state because contracts do vary from state to state.

Q: What happens to my credit when I do a short sale or a foreclosure?
A: A credit bureau is the only true source of information for determining how a short sale and a foreclosure is going to affect a homeowner’s credit. It is my experience which is not to be taken as any form of legal advice, foreclosures usually show up as “FORECLOSURE” and can stay on a credit report for seven years. If a homeowner applies for a new loan or has their credit run, the foreclosure could show up. It is also a common disclosure many employers require on most job applications. A short sale is commonly listed as “SETTLED DEBT”, and can be much less harmful to credit. Please consult a credit bureau for how a short sale and a foreclosure will actually affect a homeowner’s credit. Most people are in financial straights by the time they consider a short sale so their credit is usually the last of their worries.

Q: Why would a bank even consider a short sale?
A: Time is Money. Foreclosure action is expensive and lengthy. During the 12 month or longer foreclosure process, the property is a non-producing possession that is declining in value every day. If the property becomes vacant and/or vandalized, it will cost the lender(s) even more in repairs, maintenance and security. When a foreclosure is complete, the lender(s) must still hire a local Broker to list and sell the property. The lender(s) will compare the cost of the Foreclosure vs the cost of Short Sale. If there is little or no equity in the property, the lender(s) will have to conclude that its better off accepting a short and immediate sale. Lender(s) would rather help you find ways to come current on your home mortgage or approve of a short sale than foreclosure.

Q: When should you make the decision to start a short sale?
A: AS soon as you are no longer able to make your payments due to a job loss, illness, change in financial status, divorce or an adjustable rate mortgage that has risen to unmanageable limit you should consider a short sale. I know many people that are just frozen and just want to let the cards fall where they may and just wait for the foreclosure process. Doing nothing assures that a foreclosure is pending which could be the worst possible solution for you.

Bottom line: trust your friends for dating, hair cut opinions and just plain old fun but for Real Estate go to your trusted Realtor and see what she has to say on the subject. If she does not know the answer I bet she can help you find out. Thanks to all of you who keep calling me with your questions and thanks to all my Real Estate croanies for all your great answers.

Do You Qualify for a Short Sale?

Okay gang, I know, I know, enough already. . . I have been talking and writing and breathing short sales but this has got to be said. With the number of people jumping on the short sale band wagon many are called but few are chosen, and you have to make sure you are actually qualified we need to set the record straight. Yes property is devalued and yes you are way upside down but are you really a candidate for a short sale?

The biggest point to drive home is that you must have a true hardship to qualify. The bank loaned you the money and if you have assets and you have the economic ability to pay back the loan then you are more than likely not going be accepted for a short sale. It is a very timely process with many people investing time and energy to make it happen so it is important to assure that it is a viable option for you. I think it is a great idea to check with a lawyer an an accountant and discuss your situation. Make sure that you are honest with your Realtor because she really can not help you to the best of her ability without honest, accurate information.

Before you even think that you may want to do a short sale make sure you are prepared to be forthcoming and honest about all of your income and dept. You will need to provide a few years taxes, bank statements, and any other source of income that is available to you. More than likely if you have gotten to this stage there is a real tangible reason for your inability to pay your dept. It is vital that when you write your hardship letter is written by you and not an attorney or other party. MOST important, however, is that these items must be submitted before a SHORT SALE contract can even be looked at as a SHORT SALE possibility. So be working on these things as soon as your Realtor takes your listing.

Many people call me and ask me, “Is that a pre-approved short sale?” Now that is a hard one to swallow because there really is no such thing because a short sale can NOT happen unless the bank and the seller agree to the final terms. In other words, per the addendum the seller needs to be satisfied with the settlement that the lender is proposing for the deal to work. It is really a great big jig-saw puzzle with many pieces that have to fit together so really, until it is over – it is just not over.

I hope that this does not come across as a mean spirited article, that is certainly not the intent. I just want to clear up some misinformation that I hear floating around and I am sure that you have heard it too. Thankfully most of our short sales are working but the fact is, they do not all fly, so the best assurance is to lay it all out on the table, take a deep breath, be patient, be really really sweet to your Realtor and she will be really sweet and patient with the lender and hopefully. . .

Sorry if I am beating a dead horse but it keeps coming back to life.