Modern Real Estate: The Buying

What Everyone Needs to Know About Short Sales

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By DOUGLAS G. FRANK, Staff Writer

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The following is the second part in a two-part series on the short sale process. Part one is right here, and contains valuable information for homeowners interested in short selling their property. Part two includes the skinny on what to expect when buying a short sale property.

Ahh, the home buying process. The American dream, so to speak. Buying a home is probably one of the most daunting, complicated, drawn-out things an average American will go through in their lives, that is, unless they’ve gone through a bankruptcy, divorce, or any other procedure that involves our lovely court system. ‘Oh no, Mr. Frank, it’s not tough at all. My Realtor found us a wonderful home and we got it for a great deal and everything was real easy.’ Bullshit. Just because you got to sit back in your comfy chair and watch TLC all day while your little toy Chihuahua sits in your lap and licks his balls doesn’t mean that everything went hunky-dory behind the scenes.

Your real estate agent has to write up a contract that is anywhere between 9-20 pages long depending on all the addendums and counter offers he or she has had to negotiate the hell out of before you got the deal you wanted. He also probably has at least 2 other deals going on at the same time (and he has to if he wants to make that car payment). Not to mention your mortgage broker is busy securing underwriting and weeding through paperwork that is at best twice as much as a standard purchase contract. And he has to have at least 10 other clients at the same time if he wants to feed his family.

Anyway, my point is that these things are not easy. That’s why you hire an agent to handle all the crap for you. There’s so much work involved in a standard property transaction, who would be sadistic enough to want to triple the workload? Enter short sales.

Short sales, as readers of my last article already know, occur when a homeowner needs to sell his property for less (MUCH less) than he owes on it. The banks are open to doing these right now, so why not jump on the bandwagon and get a great home for a decent price? Right?

A lot of people think that short sales and foreclosure homes (also called “lender owned” or “REO’s”) are the same thing. The logic is there, they are both forms of distressed properties. But that is where the similarities end. With short sales you are still dealing with the owner of the property. The bank hasn’t kicked him to the curb yet. Once you reach a deal with the owner he has to take it to the bank and beg them to accept it in lieu of full payment of his mortgage. With a foreclosure, you are dealing with a lien holder, and they are not the easiest to negotiate with. The listing agent in a short sale can be a very good ally, which is refreshing in a property deal. This is because in a short sale rather than being buyer vs. seller, the circumstances are buyer & seller vs. the bank.

Short sales usually are good deals, I will give them that. They are priced a little below market value because they are lived in, a little rough in most cases, and are being sold as-is. The funds from the sale are used to settle a debt, not satisfy a debt. You can settle a debt for $1 if you had a good enough negotiator. If you have a good agent, he or she will be able to recommend a strategy for getting the best deal possible.

Notice I said if you have a good agent. I’m not gonna lie; there are not a lot of us good guys out there. Most of the agents I find are absolute idiots. You’d be surprised how many of them don’t know basic fundamental concepts of their profession. Seriously, at least once a week a fellow agent will make me cock my head like a spaniel and do a very Tim-Allen-ish grunt, “Errrm-Huuungh?” Actually the stupidity can get so annoying in the course of contract discussions sometimes that I want to scream or throw something, or make fun of them. Most of the time, however, it will be one thing, just one thing that just is so ridiculous and unreasonable, coming out of left field at 90 miles per hour, that just stops the conversation in its tracks. I have that awkward moment when I realize to myself that the person I am talking to is a complete ninny, so I just stand there, mouth agape, then drive home later completely silent, unlock the door, take all my clothes off, sit down in the leather chair in my front room… and cry. It’s what’s wrong withAmericatoday: Stupid, unreasonable people lacking common sense are handed responsible decision-making positions and we are left wondering why things never get done inWashingtonDC.

If you want to buy a short sale, mmm, meh… just don’t. Seriously, I’m not kidding. “Oh, Mr. Frank, but the house is perfect!” OK… if you must, you must. I can’t stop you. But hear me out.

Here’s why I hate them:

First, they take too damn long. The average short sale takes about 12-16 weeks to get approval. Add another 4 weeks for closing, and you have a transaction that could take up to 4 months before you even hear anything. You’d have to be a real trooper to hold out that long for a house when there are others on the market that will close in 30 days or less.

Second, they are risky. You have to be a real gambler to take the odds on a short sale. It’s not that a majority of them don’t close or anything like that. No, it’s just that there are variables in a short sale transaction that are not in any other transaction. For instance, a bank does not have to do a short sale. When you are going into a short sale, make sure to ask if the short sale has been approved yet or not. If not (which is usually the case, since most major banks won’t even start short sale proceedings until they get a signed contract), then that means the seller has to now get approval, which is what takes so long in a short sale transaction. There is no guarantee that the seller will get that approval, and it could take you months for you to find that out. Months you could have been looking for other homes.

Third, delinquent mortgage means looming foreclosure. It’s not a bad idea to check with the seller how far behind they are on their payments. Many a short sale has been cut short by a foreclosure and trustee’s auction. The reason this happens is because the banks that are too big for their own good have 2 departments, a short sale department and a collections department, and neither on talk to each other. So yes, the left hand doesn’t know what the right is doing. If there is a scheduled foreclosure date, consult with your agent to see if it is enough time to get the short sale done. Sometimes the trustee sale date can be extended in favor of a short sale. Also, if the homeowner is behind on his payments, he may also be behind on his taxes or HOA fees. Be aware that these fees are there and half to be paid by someone at close.

Finally, As-Is means AS-IS. You are not getting any improvements done on a home that is listed for short sale. Usually sellers have to prove hardship to be approved for a short sale. However if they lived there, they do have to give you a disclosure report. But you are paying for anything that isn’t up to par. Sometimes it’s worth it, sometimes it is not. I highly recommend that you get a qualified Home Inspector to do a complete check on any As-Is property you are interested in. Remember, you have about ten days after a contract is agreed upon to withdrawal from that contract for reasons related to condition of the house. Make sure your agent uses this time wisely.

Okay, that’s my take on them. I haven’t had much luck selling them because my buyers usually want to close fast, and short sales are not feasible. But there are some good deals out there if you have the time and patience to wait it out. Good luck to you all, and happy buying.

And that’s my giving a damn.

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Douglas is a concerned citizen, and practices real estate in the Southwestern region of the United States.

More from Douglas:

»Modern Real Estate: The Selling

»Why to Not Buy Real Estate Right Now

»Political Sexism in America

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Afterwards, Part 17: The Series Finale

By ANDREW FLYNN, Storyteller

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»Previously, on Afterwards.

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Levi slowly walked down a badly-lit road that was a few neighborhoods away from where Dale’s grenade had ended up psychotic instance of more death and destruction. In the span of a couple of days, he had reunited with members of his immediate family only to lose them again. This time around it was permanently. So he played these events out in his head as he wandered aimlessly in and out of his own head.

Just short of four in the morning, Levi realized that he wasn’t really that tired. This fact was pretty superhuman of him considering that he had driven nearly the whole day, been in two near-assassinations, a vehicle explosion, and was witness to the single-largest terrorist attack in the country’s history. It was, at the end of it, the endorphins that kept him wide awake. And they raced around his head and inside of his body at a rate faster than the speed of light. Or so it seemed like anyways.

He whipped out his cell phone and dialed for a cab. In the matter of ten minutes, the taxi arrived and Levi was off into the night.

Considering all that had happened today, Levi had to go to the once place that he may feel somewhat safe. The cab he hired quickly pulled into Memorial Hospital, the only full-service medical center in all of Blue Springs.

Looking as disheveled as entirely possible, Levi sidled up to the Nurses’ station just by the Admissions desk. A attractive woman in her late forties gazed up from her work ledger with her eyes popping.

“Holy shit, are you okay, Sir?” asked the surprised nurse.

“Oh yeah, I’m fine, thank you,” Levi assured. “But I’m looking to see if you have someone that came through here.”

“Okay, sure. Name?”

“Kravitz. Stephanie Kravitz.”

Instantly, the nurse’s eyes began to tear up. She stood up from her station and walked around her desk with her arms extended.

“Oh my God, you must be her brother.”

Levi accepted the outstretched arms of the stranger. The two held each other for five seconds, and Levi released first.

“I am. Please tell me that I can see her.”

The nurse looked at him once more, and then went to grab her office phone’s handset.

“Of course, I’ll call the attending doctor over.”

Levi turned away from the nurse, and muttered a soft thank you.

In the matter of a moment, a tall, thin doctor came down the corridor of the hospital. He signaled over to Levi to meet him at the entrance of another one of the hospital’s wings. Levi moved quickly to join the pace of the lanky doctor who would bring him into the guts of the hospital.

“Mr. Kravitz, I’m happy to show you where your sister is.”

“I imagine that we’re walking to the morgue in this place?”

The doctor was straightforward with Levi, “Yes, it’s just down the hall here and around the corner.”

The two walked in near-unison with not another word between them. In the span of two short minute ticks of Levi’s watch, he found himself in the morgue with the doctor. They stood in front of a table that was covered in two different types of sheets.

“If you want to take a few minutes, I’ll just be over there,” the doctor said, pointing to a computer desk in the nearby corner of the morgue.

“Sure, Doc. Thank you,” Levi said.

The doctor was then careful to remove the two sheets only to neck-height, revealing a pale, yet serene-looking Stephanie. All of the color had drained from her face, but there was a certain alabaster innocence that displayed on her earthly remains.

Levi broke down and collapsed to his knees at the sight of his deceased sister. At this, the doctor steadfastly removed himself from the scene.

There was nothing that Levi could say to anyone. He cried uncontrollably, sobbing loudly so much that it echoed and reverberated about the dank, cold morgue that surrounded him. Tears were shed, as he ran his hands all over his face and head in the purest display of anguish. All that he left were memories. Levi now realized that he was the only one of his entire family left.

The doctor reappeared from his desk, and began to coax Levi away from her body.

“Mr. Kravitz, I’ll take you out of here now,” the doctor said, carefully taking Levi’s forearm in order to turn him away from Stephanie’s corpse.

“If you think it’s best, Doc,” Levi lamented.

The doctor eventually got Levi out of the morgue and slowed his pace so that the two men could have a word face-to-face and without movement. As they stopped walking, the doctor got Levi’s awareness by giving him stern eye contact while having his arms folded securely at his waist.

“Now, Mr. Kravitz, I want to first give you my condolences for your loss. Please know that everyone here will do everything they can to help you through this process.”

“I appreciate that, Doc,” Levi said, turning his red eyes to the tiled floor of the hospital.

“But in all of this, you’re going to go through a lot of things, some which you may not be ready for.”

“It’s death, Doc. There’s been nothing but death all around me these last few years. I’m a cop, I see it every day. And now with this…my Dad, my sister, Chicago, my Mom a few years ago, countless homicides back home with NYPD, it’s death and I should really learn to get used to it, but it’s still death and I don’t know when I’ll get used to it!”

The doctor chose to let Levi rant, as it was the only way Levi had to express himself at the moment.

“Death is pervasive, Mr. Kravitz. Seems like it’s everywhere. But you have to also know that life is around you too. You have yourself to take care of amongst all of this. And you should also know that you now have a niece.”

Levi jolted his head back up to meet the doctor’s words. He wanted to see them come out of his mouth for himself and not just hear them.

Levi shot back, “A what?!”

The doctor gleaned a small smile back to Levi.

“A niece,” the doctor stated. “You have a healthy baby niece. Only twenty-four weeks, very premature, but she’s alive and she’s in our N.I.C.U. right now.”

“A niece?” asked a bewildered Levi. “Stephanie was preg, no, no, she couldn’t have been! She was pregnant?”

“She was, and even though she passed almost immediately after she received her wounds from the bullets, the baby wasn’t harmed at all, and we delivered her shortly after Stephanie arrived here.”
“Doc, you’ve got to be kidding me here.”

“Come with me, Mr. Kravitz, I’ll show you.”

Almost in unison once again, Levi and the doctor walked very fast down a few twisty hallways in the hospital. There was disbelief all over Levi’s face, but the doctor reassured him many times what the reality of the situation was.

Upon entering double-doors of Memorial Hospital’s N.I.C.U., there were four different stations where premature infants were being attended to. The doctor guided Levi over to the farthest one. The pink-hued nameplate read, “Baby Kravitz”.

The infant inside the tiny incubator weighed only three pounds and five ounces. Such a helpless-looking life form, it resembled an actual baby only by a little. Levi stood with the doctor for a few moments, just gazing down at the little face, the little fingers, the little toes. All very little, all impossible considering the events of the past few days. But all very real.

“I’ll leave you for awhile, Mr. Kravitz,” the doctor explained. “There are nurses here to help you right now, in case you have any questions.”

“Oh. Okay,” Levi said.

“Talk to her, she’s your niece. She wants to hear your voice.”

The doctor left Levi to her. All Levi could do was be honest, and he began the pour out what remains of his heart that he had leftover from the last few days.

“Hi, Baby. I’m…your…I’m your Uncle. All of this is so new, and so sudden. But it looks like it’s me and you in this world. So much has happened. So much that I’ll tell you about one day. One day when you’re bigger and can understand how crazy this world you’re now in really is. The world that we’re in. Together. I will take care of you, and I’ll be the one constant in your life, regardless of what happens. There’s…so many things I don’t understand right now. Maybe one day we’ll figure them out together.”

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Thank you for reading Afterwards! It was an absolute pleasure to have you in the audience!!
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