Donald J. Leske II
Designated Senior Broker
Emily Leske / Lic. Agent
BCI PROPERTIES, LLC
Mail: P.O. Box 44065,
Tacoma WA 98448

Office Location:
10909 Portland Ave.
Tacoma WA 98445
Office: (253) 531-1010
Cell: (253) 241-6695
Accounting: (253) 324-9699
Fax: (253) 531-5358

We adhere to the Fair Housing Act
HUD LAW info link

Parent website: www.HomesandProperties.com

AGENT WARNING!
For all Washington State Licensed Real Estate Agents, especially those who have, will be or are working with Short Sale properties. Read This regarding Form 22ss unless you have already been advised.., plus check out the new Distressed Property Law.

NEED A HOME LOAN? CALL:

Ben Leske / Loan Officer
Call: (253) 202-3355

"Short Sales"...another way to sell your home
FACT SHEET - What they are and how they work
- by: Donald J. Leske II / Senior Broker & Short Sale Consultant

  Quick FAQs -

• Read a Testimony from a Realtor @ BetterProperties, a Buyers Agent --- who finally read this page...click here!

• Read enough or want to get started? Read this to begin the process... Click here.

• What is my liability in a Short Sale, can they come after me for deficiencies on 1st, 2nd or 3rd liens? Click here!

 Greetings,

  First of all - General Info; its a tough market for anyone who needs to sell a home right now. If you do not have to sell at this time or can avoid it, DO NOT sell your home unless it is unavoidable. Then if you must sell, do not wait till its too late! Please note that I am a Real Estate Broker in Tacoma, Washington. I am not an Attorney and am not qualified to give legal advice, I can refer you to an Attorney if you need one. What I can do is offer my services to sell your property using the  Short Sale process, rather than go through a Foreclosure. Short Sales are typically known to be less harmful on your credit, the debt is erased in most cases but be aware that there is much to know and you will need the help of a professional Short Sale Negotiator, which we are.

  Many thousands of home owners across the Nation are in or facing foreclosure right now. You may be one of the unfortunate home owners who are caught up in that struggle. If you are a home owner who wishes to avoid Foreclosure, you may qualify to use the Short Sale option. You will need a "Short Sale Package" to present to the Lien Holder along with a Purchase and Sale Agreement. This process can be very complicated and can take 3-5 months or more..... and we have seen some take up to a whole year.

 Things you should know:

      A). We have teamed up with an expert Negotiation Team* provided by Real Estate Attorneys at Attorney's Title expert Kevin Hummel for the larger and more tough cases. However I will do most negotiations myself in most cases.

      B). We are a Licensed knowledgeable and qualified Real Estate Brokerage. A good, properly trained agency can do all the required paperwork plus no RE fees will be paid by the seller or buyer, as the Lien Holder pays these. Important fact; Most Listing Agents simply do not actually know what they are doing when it comes to using the Short Sale option, or choose to not be involved. Its ok.... It has been estimated that up to 90% of Licensed Real Estate Agents do not know the fundamentals of how to manage a Short Sale properly, or at all. Many refuse to even be involved since it can take months to get paid.., if at all, whereas a regular real estate transaction can close in a month or two.. Its a very tough way to go for home owners and if not done right they will loose their home to Foreclosure anyway.

      C). NOTICE: You must qualify with your Bank or Lien Holder to do a Short Sale. Some people must sell or go to foreclosure. However, the Lien Holder must agree to a Short Sale*. If they think that you make enough money to pay the loan, then they will most likely not work with you. They will want to look at a "Debt to Income" statement, two years tax returns and see a "Hardship Letter" explaining why you cannot pay the mortgage. If they think you can meet the current payments they will not allow a short sale.

*See my Attorneys info package at: www.attorneystitlewa.com/Standard_package.pdf

NOTICE:  SHORT SALE RULES HAVE CHANGED BY FEDERAL LAW
Read this article before proceeding. Posted October 16, 2009.... Click Here!  [PENDING APPROVAL OF THE AUTHOR]
See the article here meanwhile: http://www.brokeragentsocial.com/article.php?article_id=523

Now, lets look at the requirements and issues.

  What is it: A Short Sale is a term that is used when a Bank or Lender, who holds the mortgage or Note on a property that is seriously delinquent by several months, is about to Foreclose and will consider offers that are less than the payoff of the underlying debts. If you are not behind by at least a month or two, most Lien Holders will not talk about a Short Sale. Always try to call and re-negotiate a deal, or mitigate directly with them before attempting a Short Sale.

  The process: When done properly, a Buyers Agent will put in an offer, on his/her clients behalf, to the home owners Licensed Agent to then be combined with a required Attorney approved "Short Sale Package" that will be considered by the home owners  Lien Holder, who in many cases will sell for less than what is owed on the property rather than foreclose and chance the less than desirable options of a Foreclosure & Auction or worse yet... the property becomes an REO headache. Important Note; unless the property has been taken back by the Bank or Lien Holder via a full Foreclosure, Lien Sale or Auction etc..... the Short Sale will require the owners approval. Thus "short" sale", which is short of amount due. The seller or owner will not receive any funds, as the funds received from the Lien Holder was less than the home owners payoff.

*Important Note: Most Lien Holders may "indicate" that they accept an offer, when properly tendered, but will NOT actually give final approval of the ... "Contingent on Lien Holder Approval" stipulation on a buyers offer of a Short Sale. Listing Agents must however put this wording into a paragraph or a separate addenda so stating this fact on their clients behalf, but the Lien Holder generally will not accept these offers in a conventional way...ever. You will normally NOT get an affirmative reply, notice of approval or letter of acceptance. NADA, Zip, Nothing... it will just make its way to closing and everyone must hope for the best. It really should be criminal for a Lender, seller or Bank to NOT give... in all good faith, some kind of letter or written approval or denial of a buyers offer...but it happens every day.

Example:

  One case* I was working on for a buyer/client of mine taught me a good lesson. Finally after over a month of hard work to get all of our requirements in order, the lender sent a letter to their Listing Agent simply stating that they would accept an offer in that price range....., BUT it did not mention my client or if they would accept that particular offer. Warning folks..., especially Buyers Agents, YOU DO NOT HAVE AN ACCEPTED DEAL...EVER.., until the transaction is closed and it is recorded at your county Assessors office. The Lien Holders seem to do this intentionally so that if a "better offer" comes in they can say that they never did accept your offer "technically", leaving them free to go after the higher offer...right up to closing. Its certainly not fair to the poor buyer who has waited patiently ...for anywhere from 90-120 days. It would seem at the very least to be unethical to lead on a buyer to think that they have a deal... only to pull the rug out from under them suddenly. - I have heard many licensed agents say that they will never do another short sale. We work hard for 3 to 4 months putting together a deal, and then not get paid. I think its worth it to put in a short sale offer, so long as you have all your facts together ....and all your ducks in a row.

  *Note: The listing agent on my deal, who says that they do a lot of short sales for lien holders, had replied to my emailed concern about this issue by saying.........: "Let's all remember that it is a short sale, and ultimately is not "approved" until it is closed. The contingency HAS NOT been removed at this point, and won't be until closing."

• Added info. The lender may choose to issue an IRS 1099-A form that shows the deficiency as income which the borrower may have to pay income taxes on. A short sale can help a homeowner prevent foreclosure. A homeowner can continue to live in the property during the short sale. Most lenders do not allow a short sale unless the payments are at least two months behind. The homeowner usually is required to write a letter of financial hardship to the lender. Some lenders have pre-formatted Financial Hardship Packages. Lenders usually prefer to work with REALTORS® in short sales to ensure proper marketing to sell the property and to prevent direct dealings with unlicensed investors or consumers.

*NOTICE: there is a new law in Washington State for property owners, regarding Consumer Protection from scams when dealing with Short Sale, Bank Repo, Foreclosure or pre-foreclosure properties.... even if the property "may" be a distresses property or behind on payments even, within 4 months. This law applies to owner occupied homes, not vacant or rental properties. Effective June 12, 2008 its Law! ...better read up on this!

NOTICE:  SHORT SALE RULES HAVE CHANGED BY FEDERAL LAW
Read this article before proceeding. Posted October 16, 2009.... Click Here!  [PENDING APPROVAL OF THE AUTHOR]
See the article here meanwhile: http://www.brokeragentsocial.com/article.php?article_id=523

Media Review
Great article on “Short-Sales” Written by super Real Estate pro: Donald J. Leske II.  
Must Reading for all in difficulties in Sonoma County! - March 7th, 2008 . by Mike Kelly
NOTICE: ... it appears that this article has expired..., but its easy enough to contact Mike to confirm it.

 For Sellers: Do you think that the person that ends up buying your home will be represented by a Real Estate Agent? Most often yes they will. ---- Why would a buyer not hire a Licensed Real Estate Agent? The seller, as you know, pays all the commissions so why would a buyer not get some expert help to make one of the biggest purchases of their life? Did you know that sellers have a 90% better chance of finding a qualified buyer if the sale is professionally marketed by a Licensed Agent? If you must do a short sale on your home, it may be better than a full foreclosure for several reasons. -

 Sellers note: If you have any assets your lender can come back if they choose to charge you with any deficit or shortage later after the sale in some cases. Be aware that you may want to seek the council of a qualified Real Estate Attorney. If your home has not been foreclosed on already, the short sale may possibly still be done but you may need to ask an Attorney how to stop your Lien Holder or creditors from seeking debts that are in arrears after a short sale. Some banks/lenders will negotiate away their rights to come back later, some will not. - If you wish to obtain help call us today.

The "Package" - The actual Purchase and Sale Agreement is not all there is. The sellers Lender or Bank that holds the note and will expect an "acceptable" package of documents from the seller and buyer.

The Short Sale offering to the Lien Holder, ... should include:
A. The Purchase and Sale Agreement - with a Short Sale Addendum in some States, as required.
B. The BPO Letter, "Brokers Price Opinion"...or two if possible. -
C. Optional: A letter from a recognized Licensed Inspection company will help only if there is damage and repairs needed, along with a contractors bid as to cost of such renovation. If done properly this can be a big factor in getting your price. Most Lenders will also require the following if this is a new account for their Loss Mitigation Department. -
D. A pre-approval letter for the buyer. -
E. Hardship Letter from the seller -
F. Financial Worksheet, DTI for the seller. -
G. Listing Agreement. - Lien Holders want to see it.
H. They want a HUD-1 statement from buyers lender. ---

*Note, there can be other stipulations too depending on the lender. The lender will likely require additional information, which we will collect from you, and review before submitting it to the lender. It is very important that you or your client not discuss anything with the lender from here forward. Should you or your client be contacted by one or more of the lien holders, please inform them that BCI Properties, LLC will be handling all negotiations, they will most likely have a form for us to sign allowing us to negotiate.

Here are a few things to consider:

1. The Bank/Lender will look at all offers when the owner is way behind in payments. The seller must in most all cases must sign the Purchase and Sale Agreement, naturally, prior to the Lender review, so that their Lender or Note holder will know that they are in accord or agree to the terms. This is because it is a "Short Sale" and not a Foreclosure, being sold prior to the lender taking full control of the property. Sellers have certain rights as well... which we can talk about later if you choose me as your Buyers Agent.

2. A potential buyer should do some homework to find out: A. who the lender is ...and B. what is owed both on a first or second note..., but also any other liens on the property. Do your research. If you hire me as your Buyers Agent I will do all the research for you. You will not pay me any fee what so ever.
 
3. When putting together a Short Sale offer, find out by asking ahead of time if the Lien Holder has any addenda that they will require that is not part of what your local market expects. Often they do. I will also handle these issues for you as your agent.

4. When putting together an offer, you MUST find out if the seller/owner has any ownership "rights" by Law, either in the State of ownership or from the Lenders standpoint. They normally do have rights during a short sale and even in many foreclosure cases. They may hire an Attorney to get them out of Foreclosure. We will probably do a short sale on one of their homes (they have two loans or other debts against the property) and their Attorney will probably make a move to protect their other primary home if they own several homes, such as one client of mine who owns 4 homes and will let 3 go as short sales and try to keep their primary.

5. A buyer should know this..., for the buyers who want to do it themselves, in the end they will be much better off and happier to have a "Buyers Agent" approach the owner or owners Agent with that low offer and deal with all the paperwork involved. Plus, the majority of non-licensed buyers do not know how to do it anyway. I mention this because there are people trying to work magic without an agent.

Agreement: In almost all cases the seller/owner's Bank would not have looked at the offer without the buyer/seller being in "mutual agreement". At some point the property goes to Auction if no agreement is final and sale happens by the date of the Auction....be Aware of this. We have had Short Sales that seemed to be approved by the seller/owner and Bank go right up to closing and be stopped... and crazy as it seems, they can go to auction still EVEN AFTER you think you have a deal.  

  I had one failure just two days before closing with all conditions final, we were just waiting to sign. Countrywide Home Loans told me that we must start over as they didn't have time to finish, no joke. We were all within contract time limits too. At Auction later the next month the house sold for $50,000 less. THAT is a sick feeling...., weirdest thing I think I have ever seen. So just be forewarned.

6. The Agreement/Contract: Involved within the 32+ pages of just the initial P&S Agreement will be an assortment of Addenda that pertains to Legal requirements in our state, including but not limited to: Lead Disclosures, Septic & Health Dept O&M Letter, Inspection of property (most lenders on a Short Sale will not pay credits), finance addenda, several Optional Clause pages regarding size/terms etc.....and so on. Be sure to put a paragraph of addenda page that states "Subject to Lien Holder Approval" .... and be forewarned, Lien Holders will indicate their approval verbally or in a vague letter but never officially it seems. Right up to the day of closing the Lien Holder can change their mind with no default on their part, but if the buyer changes their mind it is considered a default and the buyer can loose their Earnest Money. Sad but true.

For Buyers:

The things mentioned above will  effect buying such a home, however you should know a few other things,
             A. The seller is going through a very difficult time, by loosing their homes through either the short sale process or a foreclosure. Please be considerate of their feelings at all times. Its important.
             B. Yes, you will get a bargain normally. Usually well below market prices or values.
             C. This process can take from 3-5 months, due to the slow process by Lien Holders and Banks or Lenders that holds the "Note" or Mortgage on the home who are currently overburdened by a deluge of such files to process. This is partly due to various factors, one is the time needed to evaluate the homes real value. This means the Lender may do a full Bank Appraisal which can by itself take two weeks or so depending on case loads. - Two, many lenders/banks want to hold off for a couple weeks as they look for other offers to come in... yes I know, I hate that too when I am a Buyers Agent but we must wait as all others will do.
             D. Once you are accepted or your offer is approved, the selling Bank or Lender will often have some additional addenda to sign and can demand that we use their own Title Company and Escrow Company that they choose. This is not necessarily a bad thing, they have probably just negotiated with the Title and Escrow for a cheaper rate. However, you are entitled to use and pay for your own Title Report and use an Escrow company of your own choosing. We can talk about the pro's and con's of that later.

 For Licensed Agents & Brokers:  Both Listing Agents and Buyers Agents need to be fully on top of the learning curve with Short Sales.., or ask for help. This is a very complicated process indeed. Many of us have had transactions go sour due to complications that we were unaware of would happen. But.., we "should" have been aware! I just took a Short Sale Class by Michael Hellickson who specializes in Short Sales on a National level, to brush up on my own skills, even though I am recognized as a Short Sale expert in Washington State. The first step is to call a "Qualified" RE Attorney or RE Broker to go over your options.

--- Washington State Agents be aware: All Agents & Brokers must review and understand the new Form 22SS Short Sale Addendum, especially if you are putting in an offer on a property that is a Short Sale property. - Also, Listing Agents be aware, that there are some new changes as to how to list a short sale property and what to do if it becomes a short sale while still listed with you.

NOTICE:  SHORT SALE RULES HAVE CHANGED BY FEDERAL LAW
Read this article before proceeding. Posted October 16, 2009.... Click Here!  [PENDING APPROVAL OF THE AUTHOR]
See the article here meanwhile: http://www.brokeragentsocial.com/article.php?article_id=523

7. The "others" who offer Buyer services: You need to be aware that there may be other people, Investors, Buyers, Agents etc that could be putting in offers similar to yours.... do not be fooled. If you do not do this offer right, you will NOT get the deal. Have all your i's dotted and all your T's crossed.

Final analysis:

Buyers; there are a few other things that can and should be done to help the process, but in the end the one most prepared ....may get the deal. If you wish to purchase a repossessed, pre-foreclosure or short sale property in Pierce County call Donald J. Leske II  - You will not pay me any commission or fee. Sellers pay RE fees almost all the time.

Additional Info Links:

• CPA Advice:  www.realestateinvestingtax.com/shortsale.shtml

Best regards to all,

Donald J. Leske II
Designated Senior Broker
Emily Leske
Lic. Agent & Transaction Coordinator

BCI PROPERTIES, LLC
10909 Portland Ave.,
Tacoma WA 98445
Office: (253) 531-1010
Cell: (253) 241-6695
Accounting: (253) 324-9699
Fax: (253) 531-5358

We adhere to the Fair Housing Act
HUD LAW info link