HAFA short sale CLOSED. North La Quinta, CA.
Just closed another Short Sale in North La Quinta yesterday. This one was approved for a HAFA Short Sale. HAFA short sales are not easy because they require such extreme documentation from the Sellers, but if the Seller has already tried to do a Loan Mod, then it’s relatively straight forward.
HAFA is the government backed Short Sale program. It is for Primary Residences only with Purchase Money Loans. One loan or two loans..both may qualify. The requirements for the Seller are stringent to be sure, but less so than they were before this year! The Sellers income to expense ratio is no longer calculated, against their % of Mortgage payment. It used to be that the Seller had to be spending 31% or more of their monthly income to their mortgage. No longer. There must be a true hardship to qualify, but it is a good program because there are time lines and the Seller receives a Relocation fee of $3,000 to help them move on with their lives.
This particular home in the Topaz development of North La Quinta is gorgeous! Built in 1994, it has 3 bds/2.5 baths, a large yard with pool/spa/BBQ and outdoor shower, and is located on a dul-de-sac in a great school district. North La Quinta is preferred by families because it has great Kindergarden, middle and high schools within walking and biking distance for the kids. North La Quinta is also about 5 minutes from Hwy 111 with it’s shops and public transportation. The parks and common green belts located throughout the North La Quinta developments encourage outdoor living for all family members. A friendly, neighborly community of home owners.
Wells Fargo held the note for this home. Value of $350,000. I listed and CLOSED this Short Sale in approximately 90 days for the price I listed it at..$228,000. Seller received $3,000 in relocation fees and the Buyers purchased a highly upgraded home for a very good price. HAFA short sales are tricky, but with an experienced Listing Agent, they DO close!
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Another Short Sale CLOSED; La Quinta, Calif.
Two more Short Sales CLOSED; one in La Quinta and the other in Indio. Short Sales DO close if you choose the right Listing Agent.
Short Sale CLOSED in La Quinta, Calif.: Listed in August..CLOSED in November.
Bank of America, primary home, one loan
Note Value: $252,000
Sold for $150,000..that’s about 60 cents on the original dollar! Conventional Loan with 20% down. Great family home with a lovely pool.
Short Sale CLOSED in Indio, Calif.: Listed in August, CLOSED in November
Estacio in Indio; Short Sale CLOSED!
Chase, primary home, one loan. The hitch was that the Sale Date was set for two weeks from the day I listed the property. Oh, and one more thing. Tenant in the home who was not happy, so the offer was written “contingent upon interior inspection”.
Note Value: $385,000
Sold for $234,000.. Buyers used a VA loan..unusual for a Short Sale! Another great home built in 2005, with a pool/spa in a gated community.
These were both relatively straight forward, because they were primary residences with only one loan involved and no Mortgage Insurance.
If you are nearing your Sale Date, or perhaps not, but want to learn about the possibility of doing a Short Sale, give me a call. Free, discreet property consultation and I don’t use a third party negotiation company! You WILL know where you stand with your Short Sale when you list with me!
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Submitting an offer on a short sale is the same as submitting an offer on any other property except a few minor details. Due to the nature of a short sales complexity, it’s best to choose an agent who has real experience on both sides of the transaction.
Even though you’re buying a home, a short sale listing agent that also helps buyer’s, will give you an advantage. This is why I pride myself in my ability to handle Palm Springs Valley short sale transactions.
First, have your agent find out how experienced the listing agent is with short sales. Though it may seem a little unusual to ask the other agent to provide their qualifications, it could potentially make a big difference. If the listing agent is experienced, they will likely have connections with asset managers at the bank, know what is expected by that particular Lender, and be able to communicate effectively about the progress of the transaction, timeline, etc. Talk this over with your agent and determine how you want to proceed.
Second, find out how many liens are currently held against the property. There is a direct multiplier between the number of liens and the level of difficulty of the transaction and time it takes to close. Your agent can get this information from a title company. To shed some light on this, just consider that for each lien holder, the short sale packet must be presented and negotiated, approved, and worked through.
You may or may not be able to find this out, but make sure and ask if there are any other offers. Most listing agents will not get into too many specifics about this, but at least if you know there are other interested parties, you can put your best foot forward. If the bank has already approved a previous buyer’s price, the listing agent may share that with you. This could potentially save the step of waiting for a price approval. This happens when the bank has approved a previous offer, but the buyer eventually backed out, though no guarantee. Lenders are known to change their prices too!
Once your deal is negotiated with the seller and presented to the bank, the waiting begins. Different banks have different timelines, but they are all ridiculously slow compared to a typical non-third party negotiation. Expect to wait at least a month for an approval, but be prepared to wait for several months.
Buyers often wonder why it takes so long. For the most part, the speed at which the file moves through the bank is a direct correlation to the amount of backlogged paperwork the bank is experiencing. There are literally thousands of these transactions happening across the country with the big banks. When you think about it, banks are losing money on short sales, so they probably do not want to spend money to hire tons of people to work on them. All in all, it will likely take 3-4 months to close your transaction on a short sale. For a cash transaction, the length of time could be shorter, but it’s not always the case.
After your offer is approved by the bank your contract’s inspection and financing contingencies will go into effect. You will have time, as stated in the contract, to seek financing. You will also have time to perform an inspection, and although most short sales are sold as-is, in rare cases, the bank may be willing to compensate for major problems, but that is not typical and should not be counted on. Should you choose to withdraw from the purchase, it is usually not a problem until after the due diligence and financing deadline. At that point, you will forfeit your earnest money should you choose to cancel the contract.
If you’re interested in buying a short sale in Palm Springs or surrounding areas, be sure to contact me to discuss what needs to be done to make your real estate transaction successful, and as stress free as is possible!
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