Yesterday I received a phone call from an elderly seller who wanted to do a short sale. She had bought a waterfront condo in Destin four years ago, and paid over $800,000. Today, the unit is worth around $350,000. Mrs. Seller told me she had three "friend" investors convince her to buy, who promised to help with the payments. She put down $50,000 and her son put down $75,000, but she took the mortgage in her name alone. She told me the "investors" bailed, and had never made one payment. Mrs. Seller said she had "had enough" so needed to do a short sale. She stopped making her mortgage payments three months ago, and her lender was threatening foreclosure.
Mrs. Seller is in her late 70's, in ill health and has had major surgeries recently. Her voice shook as she spoke with me. I told her I would send her my preliminary paperwork including a financial worksheet for her to fill out, as I could tell her medication was preventing her from speaking coherently.
Later on, she called back, asking how she could list the unit. I had not faxed her a listing agreement. I told Mrs. Seller, "I want to see if you have a hardship before we list as a short sale".
The conversation then proceeded like this:
Mrs. Seller: " Well, I don't have a hardship."
Wendy, shocked: "You have sufficient income to pay your bills?"
Mrs. Seller: "Yes"
Wendy: "You are including the payment for the condo?"
Mrs. Seller: "Yes"
Wendy: "You are not taking money out of savings or charging a credit card to make payments?"
Mrs. Seller: "No"
Wendy: "Then WHY did you stop making your mortgage payments?"
Mrs. Seller, sadly: "Someone told me I had to stop making payments, then I could do a short sale"
Wendy: "WHO TOLD YOU THAT?"
Mrs. Seller: "I don't remember."
Wendy: "Well, Mrs. Seller, it seems you don't have a hardship and you are probably not qualified to do a short sale."
Mrs. Seller: "OH NO, I've ruined my credit for nothing!"
This is a very sad story. An elderly person probably had a friend say they "heard" somewhere you had to simply stop making mortgage payments, then you "qualify" for a short sale! This is FALSE information. Banks have several criteria you must meet. And many banks have different rules. People, do not make serious financial decisions based on hearsay. Do your research! If you are contemplating a short sale. Contact your lender first, to see if they can help you. If not, find an experienced real estate agent who specializes in short sales. Check them out on the internet. Test their knowledge. Use caution.
Finally, don't make hasty decisions when it comes to your financial well-being. A short sale is a serious endeavor, and should not be entered into lightly. Know what you are doing before you proceed. Then go forward with a real estate agent you trust.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Destin Short Sales & Pre Foreclosure Help.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com
Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or help you buy a home or rental property on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy is a short sale and pre-foreclosure specialist and can help you sell or buy a short sale property in and around Destin Florida and the Emerald Coast.
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Everybody thinks that "short sale" is a viable option in their bag of tricks. As you point out, there has to be a legitimate hardship, not just that the property is worth less than what is owed. And, there is far too much erroneous info out there steering people in the wrong direction.
Tom - I guess there is a lot of erroneous info out there. How can someone make such a serious mistake? It is too bad.
Wendy - it's yet another case of listening to friends rather than an expert - i.e., "I stopped making payments, you should, too." Just this morning I was talking with someone who is still making her payments (hard, but she can) who is resisting all her friends telling her she's stupid to make payments on a house that's not worth her mortgage.
Sharon - I am glad they sought you out!
Wendy...
We're seeing a lot of this. My favorite so far is the Seller who supplied us with false pay check stubs. He had his boss make them. Amazing :)
TLW...ROAR!
TLW - THAT'S THE BEST!
Wendy, I sure hate hearing these things. It sure sounds like this lady got taken advantage of and then compounded the damage by getting bad advice. I wish she would have called you back.
Me, too, Bryant! I am going to try to find a way to help her :) OR maybe she can bring enough cash to closing to cover the deficiency.
The short sale rumor mill just never runs out of fodder...yicks...it never stops getting people screwed up either....! Have a sunshiney weekend Wendy !
A sad story, but I'm sure the same one is being played out everywhere. Why do people listen to friends and not contact professionals before taking such drastic action? Have a great weekend Wendy!
Sally & David - Yes, and same to you!
Laura - Sad, indeed.
Wow that is awful...what a sad story. Amazing that she would have not contacted who know better.
Bill - I just found out - she was afraid to confess - it was another agent!
Wendy, it's awful to hear such a story. This is so typical of individuals giving advice when they're cluesless with the advice their giving out and have no idea what troubles they're creating.
Lynn - This poor lady is seeing an attorney this week, and mailing a check for all the missed payments.
Or better yet the Seller who thinks transferring the title to a trust before they stop paying the mortgage will some how keep the non payments from showing up on their credit report (the barrows)
WOW- I have NEVER heard of that ERIC! THAT IS CRAZY!!!