UNDERSTAND WHY SHORT SALE CAN HELP YOU

SHORT SALE HELP TEAM

1. Nila M. Kucharski, Broker/Realtor- Certified Distressed Property Expert (CDPE), Short Sale Association of America Certified
2. Andrew Cookson @  Cookson Law , PLLC  - Loss & Mitigation Specialist
3. Marek Kucharski, Broker/Realtor - Marketing Specialist
4. Valerie Mitchell, @ Cookson Law, PLLC   - Paralegal/Licensed Realtor

Completing a real estate short sale is one of the most difficult transactions in all of real estate. It is important to know that the company and the team you hire to complete this process for you have expertise in this area.  We found it beneficial to make sure our clients know what is going to happen throughout the process. Below are the most common questions that have been asked by our clients. If you are speaking with others and they can’t answer the questions below, we recommend seeking another opinion. We have also included sample forms so you can see what they may look like. The forms are not to replace what your bank has sent you. They are only given to illustrate the type of documents that you may see from your lending institution.

What is a Short Sale?
A short sale in real estate is selling a property for less than is owed on the property. For example:
Loan Amount: $450,000.00
Market Value of Real Estate $375,000.00
In the above example the property is at a minimum upside down of $75,000. In order to get the bank to take an offer at $375,000 a team of experts who specialize in negotiations with banks and marketing short sale properties to the real estate community are needed. That is exactly the expertise of Nila M. Kucharski, Certified Distressed Property Expert and her team at Carolina MaxRealty, Inc.

Common Questions •How long does it take?
Banks can take up to 60 - 90  days to give an official approval of an offer once it is received. This process can be improved by communication with the bank by your representation. Open and consistent communication is what improves the process.
Ensuring that the required paperwork by the bank is correctly filled out increases acceptance by over 45%. Some banks will destroy any application that is even off by one item. Our team ensures that your paperwork is correctly filled out the first time so you have the greatest chance at acceptance.

•How long do I have until I have to move out?
The bank is required to let you know when they have filed the notice of default with the county recorders office for the county you are in. The majority of banks do this after you have become 90 days late on your mortgage or 3 consecutive mortgage payments. From this time the earliest a sale date can be set is 90 days from that date. So you may not have to move out until 90 days after your third missed payment.

•What are the consequences of doing a short sale?
Completing a successful short sale will mean that you will not have a foreclosure reported on your credit. This will also mean that on lending applications where it asks if you have had a property foreclosed upon,  you will be able to answer no. This is one of the single best consequences of doing a short sale. By requesting a short sale with your lender or having a team such as a Loss & Mitigation Specialist and Nila Kucharski do this work for you the number of calls you receive will be reduced by over 50%.

•What happens if it doesn’t work?
If your property does not sell as a short sale it may end up being foreclosed upon by the bank.
It is of  utmost importance to get the bank an offer to review so that they can decide how they can best help you and to accept the offer you have received. It is for this reason that you need to have a real estate team who specializes in short sales to present the offer  to the bank on your behalf.

•What kind of information will the bank ask for?
Each bank has their own separate set of forms that they can ask to be filled out. In fact if you have two loans the amount of information can be different between both banks. The types of information that can be asked  for are  as follows:
¦Signed hardship letter
¦Copies of last several paychecks for all owners of the property
¦Copies of P&L statements if you are self employed
¦Complete financial form – Each bank has their own standard
¦Copy of Tax Returns
¦Copy of Bank Statements
¦Copy of Investment Account Statements
¦Copy of Listing Agreement from your realtor/broker
¦Estimated net sheet
¦Identification of liens on property
Our team will guide you through all of the requirements regardless of which bank and which form that is required.

•What is a hardship letter?
A hardship letter is a statement of how you and your family got behind on your payments. Banks are people too and they need to know what happened in order to help you out in the best possible manner. Events that should be included in a hardship letter are as follows:
¦Loss of Job or  job  transfers arising from  a  family member's medical situation  
¦Loss of overtime or income from a job
¦Family issues – pending divorce, medical bills, other family issues
This is one of the main pieces of information that the bank uses in order to make its decisions off of. It is important that it is truthful and explains what happened to the fullest extent possible.

•What if I have declared bankruptcy?
Bankruptcy can delay a sale of your home at a trust sale. Your bankruptcy attorney may have additional advice for you and the team of Nila Kucharski  at www.CarolinaMaxRealty.com is proficient at communicating with your legal representation.
If you have declared bankruptcy please let your specialist know and please give them your attorneys information so we may be in contact with them.

•What about bankruptcy?
Bankruptcy can delay the sale of your home. Please refer to your legal representation for detailed questions on bankruptcy.

•What do I do with letters from the bank?
Read, review, and get a copy of them to your realtor, Nila Kucharski who will in turn give them to the team at  Cookson Law, PLLC representative. These letters contain different pieces of information and it is critical to review all of them as they may have legal consequences to them. Banks can send you letters in regards to the following:
¦Loan Modifications - They can modify your loan so that the payment is more affordable for you and your family.
¦Loan forbearance – This is a temporary adjustment by the bank of the requirement to pay your mortgage. They can do this for reasons such as health, job, or family issues. The amount that you do not pay is generally added to your loan balance or spread out over multiple payments.

•What do I do about people offering to buy my house if I just sign the deed over to them?
Unfortunately there are many individuals out there who do not care about helping home owners in a time of need. They in fact only care about being able to profit from your situation. Our recommendation is that you make sure to have a real estate professional look at anything prior to signing any offer from one of these individuals. If the person has a legitimate offer they will not care who reviews the offer.

•How do I choose someone to represent me on a short sale?
The representative  that you select first of all needs to have  a team. A single agent usually does not have the time, expertise, or training necessary in order to complete a short sale transaction.
The team should have a loss mitigation specialist on their staff. We team up with a Loss & Mitigation Specialist  in Raleigh for our short sale transactions.
The representative/s should be able to tell you up front if they can help you and what they are going to be doing for you.

•Shouldn’t I just call my local realtor who markets in the area?
You can. Unfortunately not many real estate professionals are  trained on how to handle a property where more is owed than the property is worth. Most of them are not trained in negotiations and not trained on how to deal with the banks and the banks representatives. But, try to ask them questions first.
Agents need to have specialized training in order to complete this process so as to prevent further action by the bank against you. In addition agents need to have a deep understanding of the process and be able to explain the value to the bank of working with the home owner.

•Are all short sales the same?
No. It would be great if they were as it would make things easier for home owners. Any team who has helped both buyers and sellers of short sale properties will tell you that not all short sales are created equal. Success on short sales depends on a lot  of reasons/factors.  On the other hand, failure on short sales can be  
caused on any of these reasons:

 ¦Uncooperative banks
¦Inadequate disclosure by the seller/s
¦Poorly prepared buyer/s
¦Banks delays
¦Poor communication by listing agent with bank (  In our case, we have a Loss & Mitigation office to do it)
¦Buyers back out
¦Seller fails to cooperate

•Will I get a 1099 for the difference between the sale price and what I owe? How about deficiency judgment?
It is possible. Each bank is different and the vast majority of banks will 1099 you for the difference. This is considered debt relief by the IRS and we recommend all clients speak to their tax advisor for assistance. We also recommend that you inquire from  our team at  Cookson Law, PLLC  on how to address this issue. 

    “Homeowners are not without defenses to a deficiency judgment and armed with proper knowledge need not fear a deficiency judgment and can in fact defeat such a judgment. One of the defenses that can be employed against deficiency judgment is the Mortgage Foregiveness Debt Relief Act. Under this law, enacted in 2007 and now extended to 2013, homeowners who lose their principal/primary homes (the house they actually live in) to foreclosure/short sale  and thereafter face a deficiency cannot be held liable for any deficiency judgment. The amount is automatically written off. The homeowner cannot be held responsible for such debt. Any lender seeking to enforce a deficiency judgment in such circumstances would be acting illegally and the homeowner would not only have a complete defense, but a right to counter sue the lender for abuse of process or other appropriate claims.” Please check for clarificaion  with  Cookson Law, PLLC  or for more info.

•Why shouldn’t I just let the home go to foreclosure?
Your credit!  Foreclosure is one of the biggest damages to your credit that can be done. You will have to disclose the fact that you had a foreclosure every time you try and purchase a major item or  new property   in the future no matter how long it has been since you had the foreclosure.
You will still be 1099 for the difference in the foreclosure sales price and the amount owed. In some cases this can increase 50% by the time the property goes to foreclosure.

•Why is having a team working for me important?
Specialization. You don’t go to a regular dentist for oral surgery you go to a specialist. Teams have specialists in each area. Carolina MaxRealty’s team has administrative personal and loss mitigation specialists trained to handle all aspects of short sales.
Teams cost no more than a single agent and you get more people to assist in the process.

 •What cost is involved?
A meeting at our Raleigh office  for consultation of 1 to 1 1/2 hours is free. If you decide to use our services, the retainer’s fee to list the house is $250.00  which is refundable to the sellers at the closing of the house.  This amount covers the initial work we do to put your house in the market,  advertising and all functionary related expenses incurred in listing the house.  It needs a great deal of cooperation between sellers and realtors to accomplish a successful short sale. The bank pays the realtors’ fees - listing realtor and buyers’ realtor. The service fees for the team at the Loss & Mitigation  will be paid by the bank. There is no other upfront cost to the sellers. The bank will have to approve these fees. Since the bank is losing money on the transaction they will decide what our team gets paid. The most important thing in this process is you, the home owner who can get out of the property without being foreclosed. With a successful short sale closing, we hope that you will use our services next time with a buy or purchase of your next house in the future. Or, refer our services to a friend/family member with a similar difficult situation.

•Is it better or worse if I have two loans?
It depends. Having two different lenders is one of the hardest short sales that can be done. It depends on how each bank has viewed the transaction and how they have both been communicated with during the entire process.

•Is communication important & do I still have to keep calling the bank?
Yes and Not with us! The number one reason for foreclosure is a lack of communication. We stop this from happening because we do the communication for you. You have a job but this is our job!  Our Loss & Mitigation Specialist team  gets the  authorization from you  to speak to the lender on your behalf. We take care of the communication and make sure you stay informed of what is happening.   Notifications of updates from the L/M will be forwarded to you

•How do I know what is going on?
The team at Carolina MaxRealty will communicate with you at a minimum of once every week via phone or email and  maybe twice a week during escrow. You usually  receive e-mail communication from our team. You may also send text to us. 

•Why should I use Carolina MaxRealty?
We choose you!  We chose to work with clients we believe we can help. Our experience and success in short sales and negotiations allows us to identify the clients we can help. If we don’t believe we can help you we will tell you right away. And there is no cost to you just by talking with us or meeting us at our office. Example:  If the husband and wife divorced and each file a bankcruptcy, it could really be very hard for us to help them with the short sale.  And we will express that to them.  

•What if I have a prepayment penalty?
Let us worry about that for you so you can get back to your life. Our team at the Gurley and Cookson Law Office can help you in the negotiations with the bank.  You may call their office for verification and clarification or  your concerns .  The contact person is Valerie Mitchell.

•Can the bank come after me or do they just get my property?
We specialize in negotiating with the bank and making sure they understand that working with us and you is in everyone’s best interest. The bank can ask for more information or seek other means to get payment if you have lied on your mortgage application and may or may not do this depending on the situation. If you believe you may have lied on your mortgage application please tell one of our loss mitigation specialists so they can take notes of it in your file. Our goal is to make sure the bank works with us and you to resolve this stressful situation.

•Why would a bank agree to do this? Don’t they just want my home?
The bank doesn’t want to own your home. The foreclosure process is a very expensive process for the bank to carry out. There are legal fees, property fees, court fees, and additional staff required by the bank to handle foreclosures for a bank. Their goal is to prevent properties from going into foreclosure.  If we can get an offer on a short sale for you, we can start the work with them.

•Can’t I just do this all by  myself?
You can.   But would you go to court without a lawyer if the side that was facing you had 3 or more  lawyers? Short Sale  is a complicated real estate transaction with a large lending institution. This process can take 100’s of hours for a trained professional to complete. Most people do not have the time to specialize in completing this kind of transaction. Our team is here to take the worry out of the transaction for you.

•Who is Carolina MaxRealty, Inc.?
We are a real estate brokerage with real estate brokers working with us; some of them are also real estate investors.  We  specialize in helping people get out of their properties that they can no longer afford or no longer wish to own through the short sale process. Regardless of your situation, condition of your property, or how many you own or how much you owe,  we can help you. Everyone runs into difficulties every now and then. Our goal is to make your stressful situation go away so you can get back to your life.

Nila Kucharski. the Team Leader is  a  trained CDPE (Certified Distressed Property Expert),  has GRI and RFC designations and a member of the  Short Sale Specialist Network. She handles  short sale  listings and had successful closings of  short sales. Moreover, she represented in buying  houses on short sale for her buyers/investors. For additional info and questions, you may call her at 919-302-4013.