Selling Your Property
Traditional Sale * Cash Offers * Wholesale Offers * Short Sales
NEVER sign a contract without your own representation or move forward with anything you are not comfortable with.
Agents and Attorneys will get paid at closing. Agents will negotiate on your behalf and handle title, escrow, inspections and coordinate all seller responsibilities. If you have an identified buyer, request a reduced commission. Attorneys will review the contract for any legal discrepancies. They will not tell you what your property is worth and typically don’t negotiate on your behalf, but you will have to handle title, escrow and know what all your responsibilities are.
Traditional Sale: If your property is good condition, this option is your best option to net the most money from the sale. Interview three agents to ensure you get the most qualified agent to handle the transaction for you. This is not the time to give your cousin’s son, who is a brand new agent, your listing. Listing your home with an agent on the open market gives your property exposure to find an owner occupied buyer willing to pay the best price. There are owner occupied cash buyers that can close quickly, but most likely, the buyer will be getting financing and it will take a few weeks longer. You don’t have to make repairs if you don’t want to. You can make repairs before listing to put a better product on the market and get a better offer. Some agents have contacts that will get paid at closing if you don’t have the funds on hand. … Or you can put the property on the market “As-Is” and sell to a buyer for under market value. There are buyers looking for properties they can get at a lower price and do cosmetic repairs to build their own ‘sweat equity’ as long as the property meets all the safety requirements of FHA, VA or conventional financing, they will pay a higher price than an investor. The rule of thumb is: What they see is what they get. You will fill out a disclosure statement in which you tell them all the material defects you are aware of. They tour the house, review the disclosure statement, and make their offer. They will have an inspection, but the rule of thumb is that they only ask for repairs they were unaware of. You can offer a credit, make the repairs or decline. The buyer will decide if they want to move forward or not. (I suggest working it out with the buyer, if their request is reasonable) and close the sale. What to watch out for: Make sure you chose an agent that knows the foreclosure process, how to get auction dates extended and has worked with preforeclosure properties before. Make sure the agent knows about any forbearances and all the liens that may be attached to your property. We are seeing transactions that are coming up tens of thousands of dollars short to close. Agents that have been in the business for 10 years have never had to worry about what was owed, because everyone had equity and now they don’t. 70-80% of agents in the business have never dealt with a preforeclosure property. Interview three agents and make sure you ask the right questions until you feel comfortable with an agent before signing a listing agreement. Agents are putting properties on the market at their ‘break even’ price, crossing their fingers and saying “We are doing everything we can”. They don’t know a property can be sold for less than what is owed on it (Short Sale)
Cash Offers: A cash offer is typically from an investor. The offer is for 10 days or longer if you need, 1% minimum earnest money, the title company will clear title, escrow will collect and disburse funds… Very cut and dry. They may have an inspection, but they won’t ask you to make any repairs or trash out the house. You can take any personal items you want. Including fixtures and appliances. Some investors do the work themselves, so they will offer a higher price being they are saving on labor. They work differently, so getting multiple offers is important. There are lower agent fees, being that they typically don’t use a agent, unless the agent found the property for them. The only time a cash offer really makes sense is if your property is not financeable due to the condition or you don’t want to take it to market for the highest price. Auction dates can be extended. Don’t wait until the last week to take an offer, but don’t panic and leave money on the table. Contact Us and we will help you get the auction date pushed out and go over all your options to make sure you are making the right decision. What to watch out for: Wholesalers… See below. Know what your property is worth. Some investors are banking on you not knowing what your property is worth and what your options are. They are trying to get your property for as little as possible. You don’t know what you don’t know and a contract may “look legit”, but you should never sign a legal contract without representation. It gives me anxiety to even put this in, but I said all your options. If you do decide to negotiate your own sale, make sure who is paying what fees it is outlined in the contract. Make sure the contract does not have and/or assigns on the buyer line and the buyer submits a proof of funds. My office will review offers for free. Contact Us and email the contract to foreclosurecounseling@mail.com. I have a data base of investors across the country and will negotiate with them to bring you the highest offer. All commissions, typically 3-6%, and fees are paid at closing and you don’t owe anything if the transaction doesn’t close for any reason. If they want to do inspections and bring in contractors to get bids, this is a wholesaler. They are going to bring in cash buyers to view your property to buy it. Real flippers can walk through a house and know exactly what their rehab costs are going to be and how much they can offer on the spot. They already know what the property is going to sell for after they fix it up ARV (after repair value).
Owner occupied cash buyers are out there, but they are using agents and shopping on the MLS for retail listings. You can still get a higher price by listing the property with a broker. Owner occupied buyers can get a rehab loan, but this will take longer. If you need to sell quickly or want to avoid the hassle of showings and repairs, a cash offer can be an excellent option. Cash buyers purchase homes "as-is," with no inspections, no repairs, and no contingencies; speeding up the closing process and providing certainty. What to watch out for: Make sure you chose an agent that knows the foreclosure process and has worked with investors before. They need to know how to tell the difference between a cash offer and a wholesale offer.
Wholesale Offers: Wholesaling was designed to be a pool of off market derelict properties owners didn’t want put out on the internet, attached to a network of investors. The wholesaler identifies the property and negotiates a price with the owner. They add their fee to that price and find a cash buyer willing to pay the highest price. What to watch out for: Wholesaling has turned into a very predatory part of our industry. If they write and/or assigns on the buyer line, they have the option to sell the contract. They present their offer as a cash offer and will agree to any price. If they can’t find a buyer to pay the price, plus their fee, and they are an honest wholesaler, they will just cancel the contract and move on. However, if you are in foreclosure, and they are not an honest wholesaler, they will write you a ‘cash’ offer at any price. They have three automatic 30 day extensions in their contract. They will drag it all the way to the auction date and bring you the ‘best offer they could get’, even if it is well below the price in their contract and the other offer you had previously. You then have to take it or let it go to auction. They will lend you money and make you feel obligated. If you try to get out of the contract, they will file a lien on your property so you cannot sell it without their signature and of course, payment. Research their LLC and phone number before accepting an offer. They may ask for personal information to communicate with the lender. You should only give personal information to your agent, title, escrow or the mortgage company. They may use an Identity Affidavit to steal your identity. This document should only be used by the title company. They only need the information of the property owner/borrower, so if you are an heir to a property, they don’t need your information. Period. When you question anything in their offer packet, they tell you “It’s just a standard packet they use” and you can just take it out. They present as reputable companies. They have BBB on their email signature, which you can pay $500 for.
Short Sale: There is no reason to try to handle this yourself. In these transactions, the lender becomes the seller in terms of who pays the fees. You will control showings and sign the contracts as usual. We will refer you to one of our broker partners, who will list your property on the market to obtain the highest offer possible. A short sale mediator will coordinate documents between you and your lender. The lender requires you to fill out a hardship packet and if you have an FHA or VA loan, they will require you to apply for a loan modification. This is a safeguard put in by the lenders to ensure you have been given all your options. The lender may require financial documents such as bank statements, paystubs and tax returns, but for the most part, it is just the short sale intake packet. The lender will review your short sale file, about 60 days, and send out an appraiser or BPO broker so they can get their own valuation of the property. Once the appraiser comes out, its get ready to go time. The lender usually comes back with a response in the next couple weeks. If the lender approves the offer, the buyer will move forward with their inspection and appraisal and prepare for closing. Our broker partner will keep you informed every step of the process, but it takes 90-120 days if it moves quickly. The lender will issue an approval letter that outlines the terms of the contract. Offer price, closing costs, relocation fees, closing date and if the sale will satisfy the debt in full. If the terms in the approval letter are not favorable to you, like if you have a second mortgage that isn’t going to get paid off, you are not required to take it. You can walk away without being in breach of contract. We suggest you discuss this with a real estate or bankruptcy attorney before making the decision. You have a couple days to decide what you want to do. What to watch out for: Investors approaching you to do a Sub To or offer to buy your property on a short sale and rent it back to you until you can qualify for a loan and buy it back for lower than what you currently own. First, this is illegal and it is call profit skimming and it is mortgage fraud. Second, we have seen investors do this to buy the house and evict the, now tenants, from the property.
What to Expect When Selling Your Home
Market Analysis: Knowing your home’s current market value is essential. We provide free market analyses to help you understand what your home could sell for.
Preparing Your Home: For traditional sales, small repairs and staging may increase your home’s appeal and sale price.
Negotiations: Offers can vary. We help you evaluate all offers to make the best decision for your situation.
Closing: Once terms are agreed upon, closing is scheduled, and you receive your proceeds—minus any mortgage payoff and fees.
Using a broker
We recommend using a Real Estate Agent in any transaction if you are not an experienced seller. Consultations are free and fees are negotiable. Contact Us with your information and we will refer you to 3 reputable preforeclosure real estate agents in your area for you to chose from
Benefits of Selling Your Home
Avoid foreclosure and its long-term credit impact.
Potentially walk away with cash in hand if you have equity.
Relieve financial stress by settling your mortgage debt.
Freedom to move on and start fresh.
What If You Owe More Than Your Home Is Worth?
If you don’t have equity, selling through a short sale is an option. This process requires lender approval but can still help you avoid foreclosure.
Ready to Sell Your Home?
Fill out our Contact Us form today for a free consultation and market analysis. Let’s find the best path forward together.