What is a CSP?
Real estate professionals that want to offer short-sale options to their clients are a special group that have agreed to undertake this complex and often frustrating task. It is not as easy as it looks. There is much more to completing a short-sale than just filling out some additional forms and making a few calls.
Certified Short-Sale Professionals will learn from a veteran, Jacob Swodeck, with over 10 years of experience in short-selling properties. In addition, you will be instructed by someone with current and relevant experience as he is a practicing professional. There is a big difference in short-sales today than what occurred in the 80s or 90s. As a CSP you will learn how to handle 80/20 loans, No-Equity Loans and Negative Amortized Loans all much different than the FHA short-sales that were handled by many agents in the past.
A Certified Short-Sale Professional (CSP) will be able to guide their client through the complex process of marketing the home, finding a willing buyer, working with the lender(s) and the other parties involved. A CSP will also learn how to determine if a property will even qualify for a short-sale and if the process will be worth the agent’s time and effort.
Why Choose a CSP Agent(CSP)?
The world of real estate is ever changing and never seems to remain constant for more than a brief period. Just a few years ago few agents or homeowners even knew what a short-sale was. Today the real estate landscape has changed dramatically and the time has come to bring in the certified professional.
A key element in the selling of a property short is knowing who makes the ultimate decision and making sure your proposal will take the least amount of time to process. With the market conditions in some areas causing a flood of short-sale properties having an experienced and well trained guide will make the process much smoother.
The reason you should choose a Certified Short-Sale Professional is similar to the reason you would select a brain surgeon over a family practitioner to perform brain surgery. This very complex balancing act of selling your home in a short-sale position is so far away from what the normal real estate agent has experienced. The risk involved of not completing a short-sale transaction properly is much worse than a situation that an agent is used to … in a normal transaction if the deal does not close the consumer loses mostly just time … in a short-sale if the deal does not close properly you can be foreclosed upon. With this said a CSP designated agent has two goals:
1) Work with your lender to assist you in resolving the imbalance between home value and mortgage
2) Sell your home quickly and as painless as possible.
CSP real estate professionals are expert facilitators of the short-sale transaction – from beginning to end. Those agents that have earned the CSP Designation recognize the impact that a short-sale can have on the sale of a home and have been prepared to provide that value added service for their clients. Who better to work through the issues of short-selling your home than the one that is assuming responsibility for the marketing of your home? Equipped with the knowledge and skills to ensure that your home is fully prepared to present a proposal to the lender, the CSP real estate professional will ensure you have an edge.
What is a Short Sale?
A Short Sale is when the lender of record agrees to discount their payoff to accommodate a sale of a house when:
1) The borrower has experienced hardship and is unable to repay the mortgage
2) The value is proven to be less than the amount needed to pay off all loans, encumbrances and real estate selling costs
3) The loan is delinquent or in default.
Often when a house in which the proceeds of a sale will fall short of what the home owner still owes on the mortgage, lenders will accept the lesser proceeds as a short sale. By doing this the lender forgives the balance of mortgage and thereby avoids a lengthy and costly foreclosure procedure.
Home Seller FAQs
What is a Short-Sale?
The short-answer: A situation in which a lender will except less than what is owed on the property as pay-off of the loan obligation. Long-answer: A complex process involving changing rules, a lender that can veto a transaction for any reason and a buyer that may not have the patience to wait while the lender makes up their mind. This is not a do-it-yourself project.
Does every lender grant a short-sale?
No, each lender will examine and execute terms differently, some may grant a short-sale, some will modify the loan and some will proceed to foreclosure. The potential problems are immense and that is one of the main reasons that you need a specialist assisting you with this process.
What should you expect during the process?
#1 – Calculate the value of your property. This will be accomplished by preparing a CMA and looking at the competition that is in your area and the condition those homes are in. We will need to price and position your home so that it sells quickly and at a high enough price that the lender will agree to the terms.
#2 – Calculate your home’s financial position. In this step we will examine the value from step 1 and compare this to the mortgages and other debt that is supported by the home value. If your home value is significantly less than your debt tied to the property you are a candidate for a short-sale.
#3 – We will start searching for a buyer, especially those that have expressed interest in buying short-sale properties. Not every buyer will want your property given the status and tenuous nature of a short-sale. The buyer must be willing to deal with extended deadlines and additional demands made by your lender. Your lender is the key to a successful short-sale transaction and we will need them to feel confident in the new buyer.
#4 – We’ll need to contact your lender and explain your situation. Lenders are under no obligation to accept a short sale and the terms of the short-sale will be examined closely by the lender. The lender is the ultimate decision maker and will be the final approval for short-selling your home. Lenders may disapprove of any aspect of the transaction without reason or justification. Lenders do not have to be reasonable.
#5 – There maybe tax repercussions in enacting a short-sale transaction. Part of the process we will cover is the tax liability that may remain after the short-sale transaction is complete. As with any tax related matter we will advise you to seek counsel from a tax professional or tax attorney.
Is using a Certified Short-Sale Professional (CSP) really necessary?
If your goal is to remain out of foreclosure than using a CSP is a great advantage. CSP trained agents know how to work with lenders and how to present the offer to a lender that will make the lenders job easier and more likely to agree favorably. Understand that there are hundreds if not thousands of requests for short-sales. If a lender sees a well presented and thorough package compared to a package that will need much time and attention, which do you think will get the preferential treatment? Additionally, your CSP trained agent has connections with many lenders, local and national, and will understand the best way to guide your package through the system.