This is one of the questions I am asked most by sellers who are interested in a short sale. In most cases, it is not really an issue as the majority of sellers face very difficult times. These people are already behind on their payments or are current, but having exhausted nearly all of their available cash and credit trying to stay afloat, will begin missing payments.

There is a lot of confusion out there. Most of it born of perceptions created in the loan modification process. Many banks told their servicing clients they would not be considered for a loan modification unless they missed payments. Some banks even required them to be seriously delinquent in order to demonstrate a hardship.

The short sale is a very similar process to loan modification; both are considered “workout” programs. Examples of these programs may include short sales, deed-in-lieu of foreclosure, forbearance, loan modification. The purpose of a loan workout is to modify the terms of a loan in order to prevent the borrower from becoming delinquent or worse, default. The difference is in a short sale, you don’t have to be late to begin the short sale process.

If a seller determines quickly that loan modification is not a remedy that can really solve their problems, then there is no reason to delay, and a short sale should be considered quickly. This is especially true here in the Las Vegas real estate market where values have plummeted 50% in many areas. Without a write-down of the loan balance, how much can playing around with interest rates, balloon payments, and the length of the loan term really mean to someone whose $300,000 home is now worth $140,000?

There are a few key points to a potential seller wanting to do a short sale while being current. First, you will have to demonstrate you are facing imminent default. You can make it a few payments but the end-game is known. A seller with a lender with a reputation of making very slow decisions on short sale approvals might make this option impossible or at the least very expensive. The last factor is your agent. Your agent cannot listen to every $8 dollar an hour customer service rep stonewalling them with their command of “bank policy” and must know to demonstrate their clients’ immediate need for a short sale to an uncaring institution.

While there is no guarantee that a short sale will be completed without the seller eventually having to miss payments, I hope this dispels the myth that a seller must be delinquent in all cases when attempting to do a short sale.

Paul Rowe is the listing agent team leader for the Sena Team at North American Realty of Nevada. For a personal evaluation, click here to request an appointment or call our team at 702-376-0088.

The signs seem to be pointing that way. The current administration has been flailing away on many areas of the economy and one of the most glaring weak areas have been the loan modification plans such as the Home Affordable Modification Plan (HAMP) which has seen less than 10% of individuals successfully modify their loans and a whopping 40 – 50% of those people are re-defaulting after receiving a modification.

To their credit however, the White House along with the Treasury Department, have recognized the need for a more orderly transfer of homes and avoid foreclosure. Treasury has been pushing hard for banks to transfer properties via short sales and deed-in-lieu rather than taking homes back in huge numbers.

The next program on the horizon is called the Home Affordable Foreclosure Alternatives Program (HAFA) which will become active this April. This program is a supplement to the previously mentioned HAMP program. Any bank who is participating in HAMP must also participate in HAFA. The new program encourages banks to approve short sales on a faster timeline. The average short sale file now takes 4 months to approve. The actual time period is often longer as buyers frequently walk out before an approval for the sale is obtained, forcing the seller to find another buyer and start the process all over. A shorter approval process will encourage buyers to stay the course and increase the closing percentages for short sales.

The final set of indicators I have seen are changes within the real estate industry. Banks are cutting back dramatically on their REO staffs. These departments handle the liquidation of foreclosed properties. On my end of the business, residential real estate, agents are also gearing up for a switch from foreclosure to short sale transactions. Short sale education classes are packed, REO listing agents have been cutting their staffs and many agents are now looking for a new place to land within the industry.

Our team is expecting our current inventory to double and is actually adding staff to accommodate the business. This is a far cry from last year when most Las Vegas real estate agents cringed at the very thought of getting involved in a short sale. I have been listing short sales almost exclusively for a year in anticipation of what is now becoming a reality.

If you are considering a short sale and have questions, I can be reached at 702-376-0088.

Paul Rowe is the listing team leader for the Sena Team at North American Realty of Nevada. You may reach the Team Sena at 702-376-0088. They offer representation for buyers, sellers and operate a full service property management division.

One of the premier views on the Las Vegas Strip!  Sky Las Vegas is a sheik building located right on the boulevard.  This corner unit is on the 15th Floor and looks out directly at the famous Las Vegas Strip.  Sky Las Vegas has all the amenities you expect, such as valet, professional front desk service, fitness area, pool with four cabanas, spa, private theater for up to fifteen people, business center and racquetball courts.

This unit is approximately 1,467 square feet with two bedrooms and two full bathrooms.  It features stainless steel appliances in the kitchen, granite counter tops and ceramic tile and carpet throughout.  This property is a short sale and is currently available for a purchase amount of $359,000.

For information on this desirable Las Vegas High Rise Condo or for a private showing, please contact Paul Rowe or Tony Sena at 702-376-0088.

We have an epidemic of foreclosures in America. Las Vegas, Nevada has been leading the pack in this grim statistic for over two years. I was at a real estate conference in Las Vegas last week and one of the panelists who consults on a committee working with the government made a comment which stunned me, 80%-85% of homes that are foreclosed across the nation were never listed on their local MLS (Multiple Listing Service) for as a short sale prior to being foreclosed!

Many sellers who are stuck underwater usually end up feeling powerless after fighting within the system, and eventually give up. Sellers need to know that there are still options open to them that involve little or no cost which may save them from a foreclosure or even bankruptcy. Your REALTOR assumes the burden of dealing with your bank on your behalf, but the results can offer a buyer a much quicker return to normalcy.

A short sale is when a homeowner sells a property for less than is owed on the current mortgage. Permission must be obtained from the seller’s lien holders to do so, but if successful, foreclose is avoided. The process is complex, but the results are far more favorable to a seller than foreclosure. Under short sale, the debt is usually settled in contrast to a foreclosure where the bank gets the home back, but the issue of the debt is not settled and the bank may have strong recourse available to them to pursue the unpaid debt depending on State law. You will have to consult with an attorney on these issues.

People who know they have to alter their loans to maintain their ownership engage in an activity known as a “workout” of their loan. Most major workout options consist of the following:

1. Repayment of past due payments
2. Forbearance (temporary suspension of payments)
3. Loan modification
4. Short sale
5. Deed-in-Lieu of foreclosure. Investment homes are not eligible. Borrowers voluntarily give the property back to the bank. This is however, still a foreclosure.

With over 4 million foreclosure filings expected in 2010, alternatives to foreclosures are being encouraged by the Federal Government. In a market like Las Vegas, where plummeting property values have excluded many homes owners from curative programs such as Hope For Home Owners, the short sale is a viable option for many homeowners who know they cannot maintain the mortgage.

Sellers, go seek counseling on all the potential options up front. You want to move from one option to the next rather than try only one, stop to learn the next, and on an on. The problem with this strategy is you will run out of time to really mount a successful short sale effort. Don’t wait until two weeks before your home is due to be foreclosed and then try to take a stab at a short sale.

Going back to the original statistic that over three quarters of people who lose their home did not try to sell it demonstrates that the public is unaware or at the least uninformed that they can work with their bank to sell it, rather than have the bank simply come and take it!

Please contact Sena and Associates at 702.376.0088  for a free consultation on short sales and whether it may be a good option for you.

After much speculation within the industry, news out of Washington D.C. this week confirmed that Senate is moving forward on extending the $8,000 first time home buyer tax credit. The Senate still has to approve the measure; however, it appears to have bi-partisan support amongst Republicans and Democrats.

The latest version would offer a slightly lower credit of 10% of the purchase price with a maximum payout of $7,290. As long as the home you are purchasing has a price of $72,900 or higher, you will receive the full credit. That is still a nice credit for buyers to enjoy. The median home price here in the Las Vegas real estate market is around $140,000, so most buyers will qualify for the full credit. The tax credit is limited to individual buyers earning $75,000 or less and married couples who earn less than $150,000 per year. Buyers would have to be in contract to purchase a home no later than April 30th, 2010 and must close on their home no later than June 20th, 2010.

The credit is also being expanded to include current homeowners looking to purchase a new home may also qualify for a credit. They must have been living in their current residence for a minimum of five years. Individuals earning over $125,000 and couples earning over $250,000 per year would not be eligible.

Unfortunately, the misconceptions many sellers in Las Vegas may have about this question often prevents them from pursuing one of the best options to a foreclosure—the short sale. They just assume that they won’t be able to pay any closing costs, have the money to cover buyer requested repairs and mostly believe they cannot afford a REALTOR.

In reality, if the seller’s bank approves a short sale, they will allow for the majority of these costs to be taken right out of the sales proceeds, including the REALTOR’s commission! In some cases, the seller may never have to contribute any money at all.

Now that being said, there is no guarantee that a seller will never have to contribute something to the closing. If you’re interviewing prospective real estate agents to list your property, and they tell you this, run! No REALTOR can make such a guarantee. You don’t even have an offer yet; you don’t have an appraisal; the bank has not evaluated the seller’s financial profile; and lastly, you certainly don’t yet have an offer from the seller’s bank with the terms of the short sale they are willing to accept.

Example:

Seller has a home on the market as a short sale for $200,000. The bank usually allow for many of these costs to come directly out of the $200,000.

• Escrow and Title fees
• Title Insurance
• REALTOR Commissions
• Taxes (both property and transfer taxes)
• Home Owner Association fees
• Legal Fees (if applicable)

I always try to minimize any potential costs my sellers will have to incur, and present in a straightforward manner, exactly what the benefits and negatives of the seller covering a certain cost, so that the seller can make an informed decision.

In the current Las Vegas real estate market, we are literally trying to settle hundreds of thousands of dollars of debt per property, so in some cases, the sellers may have to contribute something and should not automatically expect that they will not have to contribute in some fashion. When you look at what is often asked from sellers as compared to how much debt is being settled, the amounts are often staggeringly meager.

This Las Vegas Condo for sale in Northwest Las Vegas is a short sale.  It is a three bedroom unit and is being offered at $89,500. Located in Adagio, this community comes complete with pool and a fitness center for your enjoyment.  This is a short sale. If you’re not familiar with how one of these deals work, please give us a call and we will walk you through the entire process to see if one is right for you.

If you’re an investor, you’ll love the fact that this property is a 3 bedroom, which are pretty hard to come by, and will appeal to renters who require more space than the average condominium has to offer. The condo has 1344 square feet, and also has a fireplace.

This property is in very nice condition, and is a terrific alternative to the heavy bidding going on in the current foreclosure market.

For information on this desirable property, please contact Paul Rowe or Tony Sena with Sena and Associates at 702-376-0088.

Las Vegas Short Sale approved! Here is a short sale that the lender has already agreed can be sold for list price.  Most short sales in Las Vegas require you to put an offer and then after 3 or 4 months, you may get the approval from the seller’s bank to proceed on the sale. Not here. We have already negotiated and received permission and you can close in just a few weeks.

This 4 bedroom home is located in Spring Valley in a small gated community. Forget long commutes on the Interstate 15, you’re only about 10 minutes from the famous Las Vegas Strip and most employment centers here in the valley. The home has a downstairs bedroom and the dining room has a fireplace. You’ll really enjoy the mature landscaping in front of the home and within the community.

Call Paul Rowe with North American Realty of Nevada for details at 702-497-9142.

This home for sale is located in Northwest Las Vegas.  We had bank approval but lost our buyer, so if you want to get involved in a short sale that may move much quicker than usual, then take a look at this terrific property. It is nestled in the shadow of the Spring Mountain Range, located near the 215 beltway in the northwest part of the Las Vegas Valley.

The home has just under 2,100 square feet with 3 bedrooms, 2 and a half baths, with one of the baths located on the main floor. The kitchen is laden with upgrades normally seen in higher end homes. Included are Whirlpool stainless steel appliances, exquisite granite countertops and more. The sellers have kept this home in terrific condition. You’ll think it’s new!

The home has covered balcony in front of house and covered patio in the back. The yard is fully fenced as well. The home has room for an additional car in the driveway to compliment the 1 car garage.

This home is being offered at $150,000 with $4,500 contribution to the buyer’s closing costs.
If you would like a private tour of this Northwest Las Vegas Home or have any questions, please contact Paul Rowe at 702-497-9142.

Yes! Now understand, a short sale can be accomplished without one. A REALTOR can negotiate with a seller’s lien holders to get an approval for the sale without an attorney, and a seller can choose not to seek legal advice, but this is really playing with fire. Nevada is a deficiency State. Unlike California and other States, lenders here, who suffer losses due to foreclosure and short sales, have the ability to try and recoup some of those losses by obtaining a deficiency judgment via the courts. Essentially, your former lender sues you, and if they win, you still owe them money. The lender can then try and collect the money, try and settle the debt with you directly, or worse, sell off the judgment to a third party debt collector; can you say hello to spending the next few years dodging debt collectors? The whole point of a short sale is to come to a resolution, not endure sequels to this horror.

Let’s get one thing straight, this is NOT a legal advice column. I am a licensed REALTOR, not an attorney. The purpose is to alert you to the risks, and why you need to do everything you have to in order to protect yourself. A successful short sale has two goals. The first is what most people focus on, getting rid of the house and the payment. The second goal, and almost as important, to free oneself from the entire debt, including the portion known as the loss.

At its essence, a short sale is a contract negotiation. Attorneys are far better equipped than REALTORS in this area. If a bank makes a mistake with a REALTOR, so what; make a mistake with an attorney and they open themselves up to potentially serious legal ramifications and counter-attacks. Attorneys can also perform the short sale negotiations on your behalf. Rather than having an out-gunned real estate agent negotiating with multi-billion dollar financial institutions, why not have an attorney do it, especially if it costs you a fee that is less than the price of one mortgage payment?

REALTORS also need protection and advice. We are being forced into areas of real estate fraught with unwanted liabilities, yet distressed sellers need the representation and we need the work, so some of us professionals have taken on the challenge. My real estate team Sena and Associates recognized the need to bring in experienced real estate attorneys to help guide us as REALTORS as well as representing the sellers against their banks with these short sales.

We have an axiom we follow in the real estate industry: It takes a team to successfully represent a client. You need the right agent, the right lender, the right title/escrow company etc. Now, if you are doing a short sale in my opinion, you also need the right legal and tax advice, so be prepared to fork over a little bit to do the deal right. You won’t have to spend a fortune; in fact, most of the attorneys we work with understand your desperate financial situation and look to make the majority of their legal fees directly from the lender as simply another closing cost which is deducted off the sale price. They may charge you some fee up front to cover their retainer fee, but the results will often far outweigh the initial investment.

If you have questions about doing a short sale here in the Las Vegas and Henderson area, please call us for a consultation at 702-376-0088.

Paul Rowe is the primary listing agent for SENA AND ASSOCIATES, North American Realty of Nevada and specializes in short sales