HOW TO START A SHORT SALE

This is my video presentation on some of the basics you need to know about Short Sales.
This first video is how to get started in the process. I prepared this video to get you started on some of the basics so that when we talk, we can go over your case specifically and focus on your situation in question.
First thing you need to do with considering this is to educate yourself about Short Sales, the process, the tax ramifications, how it’ll affect your credit, and whether you’ll owe any money back to the bank also the different incentives that banks are offering and lastly, if you’ll qualify.

So how do you do this? First, I would recommend watching the rest of my video consultations here. They are informational and they will walk you through the basics of Short Sales, and give you a great understanding on some of the basic items of Short Sales. Another thing I suggest, read some of the blogs found here. I have tons of articles written addressing almost every question I have ever gotten about a Short Sale. You can check out my frequently asked questions also, which has a lot of good information.

The next thing, talk to someone who is extremely educated in doing Short Sales like me. I offer a free, no-obligation consultation, over the phone or in person one-on-one, to go over your specific case. This is completely free to you and confidential. This isn’t a general overview on Short Sales or some type of Short Sale seminar. This is just me talking about your case and answering all of your personal questions.
I have done over 500 Short Sales and I don’t make you sign any paperwork for this consultation. It’s completely confidential and I talk to people all day long for free. So it’s in your best interest to talk to someone who’s extremely knowledgeable and experienced, for free.

Once we have our consultation, I will be able to direct you to any of the other needed resources I have, such as an accountant, to determine if you have any tax liability, and I do offer free consultation there. I also have real estate or bankruptcy attorneys if you feel you might need one. I also have a credit repair specialist, a loan modification specialist, and a foreclosure delay specialist, if we decide that’s what you need.
After you have informed yourself about Short Sales and the process, then you need to decide if this process is right for you or not. Then decide who you want to start the process with.
Now that I’ve told you a little bit about how to prepare yourself, I wanted to tell a little bit about me, which can help you in who you decide to move forward with, whether you decide to work with me or not. Personally, I’ve been doing Short Sales for about 6 years now and completed around 500 of them. They are my specialty, although I do traditional real estate as well. It’s important to understand that most agents do not understand all the complexities of Short Sales. These are 3 times more difficult than a traditional sale.

The National Association of Realtors (NAR) states that the average agent does about 8 deals a year and most of those are not Short Sales. Meaning, most agents might attempt to do 1 or 2 Short Sales a year. My office is closing about 200 Short Sales a year now. Be sure to find the most experienced agent possible, your financial, as well as your credit future, might depend on it. Over the past six years I’ve also developed significant relationships with the banks and their executive offices, to make sure my clients have success, and making sure their property does not go to foreclosure. So make sure that whoever you decide to work with has contacts with the banks.
I’ve also traveled the country teaching Short Sales to other real estate agents, large name brokerages, as well as attorneys, to help teach them how to do Short Sales correctly. Many agents out there are seeking my advice and knowledge and help when it comes to doing Short Sales. Make sure that whoever it is you decide to work with is well trained. I also have a huge amount of reviews online from past clients talking about our service and their experience. This I feel, is extremely important when deciding who to work with whether Yelp, Google Places, Zillow, The Better Business Bureau; any of these numerous places people go and talk about us. We have an excellent reputation, which I think should be extremely important when you decide who it is you should work with. Be sure to simply Google:” Kurt Wannebo Reviews” and you’ll see what I’m talking about.

This is an extremely important financial decision in your life and the Short Sale process is completely free to you. So why not work with who you feel is the best. All of my services and advice are completely free to you. I write all of my contracts as such so that you can cancel it any time giving you some peace of mind. With that being said, again I encourage you to watch my videos about Short Sales here, and give me a call to talk over the phone or meet in person before we can go over your case and answer all of your personal questions. Again all of this personal advice is free to you.
Thank you for your time and I look forward to speaking with you.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

GETTING PAID TO DO A SHORT SALE

There are a lot of new incentive programs out there that actually pay homeowner’s money to go ahead and Short Sale their homes. For many reasons, some bank do this, but most notably it is to get homeowners to participate in a Short Sale rather than a Foreclosure, which could cost the banks to lose more money than they would through a Short Sale process.
Some of these incentives offer homeowners, anywhere from a thousand up to thirty thousand dollars when they sell their home. They are all different and have their own different guidelines and requirements and order to allow this to happen. Many of them are also very complex in regards to the requirements. The most important thing to remember with all of these programs is this, even if they have their guidelines in place and you meet all of these guidelines, many times it will still be up to the bank, the investor, or the government, whether they will decide to allow you to receive this money or not. It is completely voluntary on their part.
Let’s talk about some of these programs. The most well-known and implemented program in the Government Short Sale Program is known as HAFA (Home Affordable Foreclosure Alternatives). There are 3 different versions of HAFA all having different requirements, but essentially they will allow you to receive $3,000 for relocation and moving expenses. Even if you meet all the requirements for this program, it will be up to all your lenders to agree and allow you to do this.
Many real estate agents are not completely knowledgeable about these programs, how they work, their requirements, and the paperwork involved and can actually do you a disservice by not applying you for these programs in your Short Sale. Not only that, but they could be implemented incorrectly, resulting in you being disqualified from them, if the paperwork is done wrong.
I’m certified as a HAFA Specialist, meaning I know all of the up to date provisions of this program. When we talk we can go over your case to determine your eligibility, but nonetheless, we still submit all of our short Sales as HAFA, to ensure you potentially receive $3,000 if you meet the requirements. From there, each bank is starting to offer their programs. Bank of America, FHA, VA, Chase, Wachovia, Wells Fargo, as well as many other banks, offer their own incentive program and new ones are coming out all the time. It’s important to work with someone who knows about all of these programs and their requirements, so you don’t leave money on the table when doing a short sale. I will say, I have completed a lot of HAFA Short Sales, as well as all of the other lender incentive programs for our clients. Resulting in, our clients receiving anywhere from $1,000 to $20,000 at closing. Be sure that whoever you work with knows everything there is to know about the programs your bank offers, whether or not you would apply. If for any reason you are not eligible for these programs, do understand you can still proceed into a Short Sale. It just means you will not receive any money in the process, but at the same time, the process will not cost you anything at all.
In my free no-obligation consultation, I go over this with my clients, and talk extensively about their options. Because these programs have become so extensive, I simply can’t talk all about them in this video.
This has been my presentation, on “Getting Paid to Do a Short Sale”. Give me a call to setup your free no-obligation consultation, over the phone or in person, and we can go over any specific question that you may have, and determine your eligibility for any of these programs.
Thank you very much and I look forward to speaking with you.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

WILL I OWE ANY MONEY AFTER A SHORT SALE

First it is important to define the term deficiency. What that means for example, let’s say you owe $500,000 on your home but want to short sale the property for $400,000. We are looking at a deficiency amount in $100,000. Now let’s talk about this deficiency amount if you will owe any money back to the bank after a short sale.
For the past 6 years that I’ve been doing short sales, there were situations and circumstances where the banks could come after you and require you to pay money back. However, there is now a new law that went into effect as of July 19, 2011 which is called the California Civil Code Procedure 580e which is specific to short sales. That law basically state that the lender agrees to a short payoff on any residential properties 1 to 4 units. The bank is no longer allowed to come after the homeowner for the remainder of the balance. This is true for first loans, second loans or any other subsequent lien holder. This is also true for any residence up to 4 units whether it’s your primary residence, an investment property, a second home or whatever. The only exception to this law is if you commit fraud or the owner of the property is an LLC or Corp or the lien secured by a bond or utility bond. Another point of this new law is that banks cannot require a seller or homeowner to pay money in order to do a short sale. So essentially now, in a short sale, a bank cannot come after you for the balance nor ask the homeowner to contribute anything.
What does this mean for you as a homeowner? It means that if you can’t afford you home, you can do a short sale, preserve your credit, not pay any money back to the bank and you won’t owe any money to the bank after a short sale.
All of this is free because the short sale is completely free to a homeowner. It doesn’t cost anything whatsoever. Does this means short sales are a bit easier? Yes and no, they are still difficult and there are some loopholes for second loans to be able to ask for more money in order to allow the short sale to occur, but this is where someone like my-self with experience comes in and be able to negotiate with the bank and get them to accept the short sale case. And if you have a unique situation where this might arise, we can talk about this in our free consultation.
Understand I’ll still be proceeding as usual, meaning we will still work towards getting an approval letter in writing from the bank specifically stating that you will not owe any money back after your short sale occurs. Because I am not a real estate attorney, I will offer you to review your approval letter with a real estate attorney for free if you would like. This is to make sure you were fully informed and aware of everything. And if you don’t like you approval letter, you can cancel your short sale for free of charge and you don’t owe me anything. I write all of my contracts such that you don’t owe me any money and can cancel it anytime without any fees paid. This gives people a lot of assurance when working with my office.
This has been my presentation on” Will you owe any money back after a short sale? “. Again I must disclose, I am not a real estate attorney but I do provide them free of charge if you would like and you are my client. So give me a call and set up your free no obligation consultation over the phone or in person. It is completely confidential and you can ask any specific question that you have.
Thank you very much and I look forward speaking with you.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

SHORT SALE AND YOUR CREDIT

The first thing I tell clients when doing a short sale is this, it will cause damage to your credit. There is no way around it. But, it’s important to understand when it’s completed it will be reported on your credit as an account settled for less than the amount owed. This is something that can’t be negotiated. This is regulated by the Fair Credit Act and the FTC. For more information regarding this please go to www.FTC.gov.
Most people ask me “How does it affect my credit?”, “What credit score drop am I going to have?” the answer to that is there is no way to predict this. I have talked to numerous different credit specialists and it basically comes down to three factors. The first is whether or not you have 1 or 2 loans. If you have 2 loans, that’s going to be essence to short sales report on your credit and a little bit damaging than just having 1. The second thing is, whether you make payments through the process or not. Because if you’re not making payments, what will happen is you will start suffering 30, 60, 90 days late reported on your credit and it’s going to be a different instance than the short sale in of itself. Lastly and most important is, what do you have going on in your credit history? I have clients for example who have multiple mortgages, credit cards, car loans, student loans etc. Those when people will have more things going on, typically don’t experience as great of a point hit than somebody who has nothing going on their credit history with the exception of this one loan and now defaulting in it. It’s going to be a little more severe for them.
I always follow up and talk to my past clients and talk to them about their credit after fact and see how it affected them. There have been numerous instances where I have married couples or partners on the same property, but when it was all said and done it affected their credit scores totally different. One person had a 50 point hit. The other had a 200 point hit. But in the end, it’s totally unpredictable.
The next question people typically ask me is “How long does it take to rebuild my credit score?” the answer is, it depends on what you have going on. I’ve had clients who have been able to rebuild their credit score in 10 to 12 months’ time. Other, who have nothing going on in their credit history and they don’t utilize it could take longer.
The good thing about doing a short sale and you credit is this, one, if you decide to have your property go to foreclosure, you would have to wait a period of 7 years in order obtain any other type of financing on a property that’s ultimately going to be backed by Fannie Mae. Next, I do have a lot of clients who are in the military and it can affect their security clearance if they allow it to go to foreclosure whereas with a short sale it typically doesn’t. I have clients who work in the financing sector, these might be mortgage brokers or people who work with personal financing and many times a foreclosure is absolutely going to affect their ability to even obtain their job but typically a short sale doesn’t. Lastly, I do deal with a lot of clients in civil service, these are people such as firemen, policemen, people who work at the district attorney’s office and many times they state to me that if they have a foreclosure it’s going to impede their job or ability to have one where as a short sale it does not.
With a short sale, you buy again much more quickly as oppose to a foreclosure with a 7 year wait period. With a short sale you only have to wait a period of 2 years it doesn’t mean you couldn’t go out and buy a property all cash, or does not mean you couldn’t go out and find some type of unconventional financing. But if you did you just have to understand you might be paying a higher interest rate or paying a few points up front. There are other lenders such as FHA or VA where the waiting period might only be a 1 year circumstance with a short sale. But in the end, in order to get a market rate or a conforming loan, you’re going to wait a period of 2 years. Lastly, I do let all of my clients know I do have the resources to get their credit repaired or restored. One resource I have educates clients on how to rebuild their credit score back up to what it was or as high as it can possibly be so that they can move on. The other resource I have is the have is to actually delete the short sale from their credit report. I don’t go in to this too much at this point and I don’t like it to be the sole reason the client decides to do a short sale. But this is my concierge service that I offer to my clients only. If you choose to use this resource, you can completely delete the short sale from your credit including all of the late or missed payments and thus you would not have to wait a period of time to buy another property, you can do so right away.
If you’re interested this, you can give me call and we could talk about it a little bit further.
This has been my presentation on Short Sales and Your Credit. Give me a call to setup your free, no obligation consultation over the phone and we can go over any specific question you have. Thank very much and I look forward hearing from you.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

SHORT SALES AND TAX INFORMATION

This sections talks about the potential responsibilities of doing a short sale so it’s important to explain the process here. First what will happen is, whenever the bank loses and if they forgive you for paying back any of the difference then the bank will issue what’s called a 1099-C which is a cancellation of debt.

For example, let’s say you owe $500,000 but will sell your property for $400,000 and that is a loss to the bank of $100,000 and they are required by the law to issue a 1099-C which again a cancellation of debt. This can be a taxable event by the IRS or the State of California but there are some exemptions to this and not everyone needs to pay taxes but you need to determine that for yourself. The first of these exemptions is on the federal level is the MDRA (Mortgage Debt Relief Act of 2007) that basically says that this is your primary residence and you have pulled any money out above and beyond the original loan amount then you will be excluded from paying any taxes. What is important about this tax relief currently is that it expires at the end of 2012 meaning you have to short sale your property before December 31st 2012. If you want more information about this, please visit www.irs.gov and search for the Mortgage Debt Relief Act of 2007 or speak with a tax adviser.
There is also a similar provision in the State of California created by California Senate Bill 401. There are slight differences for this state so if you need more information go to www.ftb.ca.gov and search Senate Bill 401 and again talk to your tax adviser.

If this not your primary residence or you have pulled money out above and beyond the original loan amount, there is another provision that is called Filing for Insolvency. This is available both in California and the IRS level. The definition of that is if you have more debts than assets then you could be deemed insolvent and not have to pay any taxes. This is much easier to qualify for you basically just fill a 1 page form to the IRS which is a Form 982 the year after you short sale that property.
This has nothing to do with your credit it does nothing to do with your bank either. This is simply between you and the IRS or the State of California but you need to talk with your tax adviser to determine if any of these apply for you. Some other exemptions are if you filed for bankruptcy or with investment properties you can use capital losses to offset the debt forgiven.

Now I must disclose, I am not a tax adviser and I am not qualified to tell you whether you qualify for one of these provisions and I simply share this information with you so you could have an educated conversation with your own tax adviser. And if you don’t have one, we could provide one for you. If you have your own, that’s great. Just make sure that they are well versed on the Mortgage Debt Relief Act of 2007 and Insolvency. If you don’t know anyone, once again we can get you a free consultation from a tax adviser to assess your situation to determine if you will have any tax exposure before you have to do a short sale and it’s completely free to you.
It’s best to determine this before you start a short sale. Some people may even determine that they have tax ramifications but they still choose to move forward with the short sale because it makes economic sense for them.
Part of my service after you have a free consultation with me is that I provide you with a reference to get a free tax assessment before you decide to do a short sale.

This has been my presentation on “Short Sales and Tax Information”. Give me a call to setup you free, no obligation consultation over the phone or in person and we can go over any specific questions that you have. Thank you very much and I look forward speaking with you.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com