Most short sale negotiators have recently been agreeing to the full 6% real estate commission. However, if the Purchaser is also the selling realtor, do not expect the short sale lender to always agree to allow any commission to be paid to the selling realtor. In other words, the short sale lender will not pay the Purchaser a real estate commission to buy the house.
We recently encountered a short sale where we had obtained an initial approval letter. However before the final approval, the short sale negotiator noticed that the contract contained required language indicating “that the Purchaser was a licensed real estate agent”. But probably more important the negotiator noticed that the Purchaser as selling agent had also acknowledged that the deposit had been received by himself as the realtor. In other words, the same individual signed on Page 8 as both Purchaser and Selling Agent. When the negotiator put “two and two together” the real estate commission was reduced to 3% with only the listing agent allowed to receive any commission.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Mar 10, 2010
Tip 10-2010: New GFE & Shopping of Loans
One of the goals of the new GFE is to allow the Borrower to shop the loan terms and estimated settlement costs among various lenders. Although this is an excellent concept, in reality it is impractical with the new forms. The new GFE is simply confusing and hard to provide a good comparison among lenders. Also the estimated settlement cost on the GFE can change significantly within the 10% and unlimited tolerance areas. Finally the new GFE may not be available until several days after the initial loan application, which limits the time to shop.
Accordingly, the better way “to shop” would be to compare among lenders only the actual loan terms and lender controlled costs (GFE #1, #2) and portions of GFE #3 (appraisal, credit report, tax service fee and flood certification). These are the lender controlled closing costs in the HUD 800 columns. In actuality, the rest of the settlement costs will be the same no matter which lender the Borrower selects (Ex: The settlement attorney and the recording costs will be the same for Lender A vs. Lender B).
Most lenders now can provide borrowers with “worksheets”, “cost example” or “loan summary” forms which mimic the old GFE, so requesting those along with the new GFE will insure accuracy and real costs.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Accordingly, the better way “to shop” would be to compare among lenders only the actual loan terms and lender controlled costs (GFE #1, #2) and portions of GFE #3 (appraisal, credit report, tax service fee and flood certification). These are the lender controlled closing costs in the HUD 800 columns. In actuality, the rest of the settlement costs will be the same no matter which lender the Borrower selects (Ex: The settlement attorney and the recording costs will be the same for Lender A vs. Lender B).
Most lenders now can provide borrowers with “worksheets”, “cost example” or “loan summary” forms which mimic the old GFE, so requesting those along with the new GFE will insure accuracy and real costs.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Tip 9-2010: Short Sales (Personal Observation)
Tucker’s Tip #7-2010 presented a comparison chart for the Homeowner’s consequences with a short sale vs. foreclosure. The general conclusion was that a short sale appeared to be better (or less negative) than the foreclosure.
The “short sale” is also preferable as it allows the Seller to control his future including when to vacate the property. The short sale also means “one less foreclosure”, “one less empty house in the neighborhood” and “one less depressed home valuation for future comps”. In other words, all the extra work by the homeowner, realtor and settlement attorney to complete a short sale is worth it.
Each successful short sale in the Central Virginia market place means one less foreclosure to have a negative impact on our real estate market and community.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
The “short sale” is also preferable as it allows the Seller to control his future including when to vacate the property. The short sale also means “one less foreclosure”, “one less empty house in the neighborhood” and “one less depressed home valuation for future comps”. In other words, all the extra work by the homeowner, realtor and settlement attorney to complete a short sale is worth it.
Each successful short sale in the Central Virginia market place means one less foreclosure to have a negative impact on our real estate market and community.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Tip 8-2010: Pay Off Statment
It is advisable that the listing realtor obtain “current” pay off statements from the Seller. These statements should be obtained at the initial listing of the property. With these current pay off statements, the realtor can determine whether the estimated sale price will result in a short sale, and whether there are any defaults with the monthly payments (possible foreclosure).
Be sure that the Seller provides statements on all outstanding mortgages (first, seconds and/or home equity loans). Some Sellers do not understand that their home equity loan is really a mortgage.
Obtaining the current pay off statements should be a part of the realtors listing checklist.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Be sure that the Seller provides statements on all outstanding mortgages (first, seconds and/or home equity loans). Some Sellers do not understand that their home equity loan is really a mortgage.
Obtaining the current pay off statements should be a part of the realtors listing checklist.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Tip 7-2010: Short Sales vs. Foreclosures - Which is better?
The financially distressed homeowner has many issues to deal with but probably the most important is deciding on whether to pursue a short sale instead of a forced foreclosure. The attached chart (please contact us for a copy) from the Distressed Property Institute provides an excellent comparison of the homeowner consequences of the short sale vs. the foreclosure. It would appear from the chart that the short sale probably has less negative effects for the seller than a foreclosure.
Although each short sale decision should be based on the homeowners individual facts and circumstances, all in all, a successful short sale is more preferable and has less future negative results than a foreclosure.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Although each short sale decision should be based on the homeowners individual facts and circumstances, all in all, a successful short sale is more preferable and has less future negative results than a foreclosure.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Tip 6-2010: Short Sales & Early Title Search
Recently I have had two approved short sales delayed because of unresolved title issues which were not discovered until the Purchaser completed their title exam. In both cases, the Purchaser’s settlement agent did not order the title exam until after the approval by the short sale lender.
Please do not wait to order the title exam. I recommend the following:
Listing Agent: Immediately with the listing, order a one owner title update. This update discloses all Deeds of Trust, liens and judgments which need to be negotiated.
Selling Agent: Request that the Purchaser’s attorney order the title exam very early in the process. Even though the listing agent may have a one owner update, the full title exam may undercover other problems which can be resolved while waiting for approval from the short sale lender.
For more information about this issue please review two previous Tucker’s Tips, #18-2009 & #40-2009
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
Please do not wait to order the title exam. I recommend the following:
Listing Agent: Immediately with the listing, order a one owner title update. This update discloses all Deeds of Trust, liens and judgments which need to be negotiated.
Selling Agent: Request that the Purchaser’s attorney order the title exam very early in the process. Even though the listing agent may have a one owner update, the full title exam may undercover other problems which can be resolved while waiting for approval from the short sale lender.
For more information about this issue please review two previous Tucker’s Tips, #18-2009 & #40-2009
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
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