Last year on April 18th, 2013 my Broker let me re-new an expired listing that was already listed with Kauai Dreams Realty. I was so excited because this was my first listing ever. Little did I know about short sales at the time but I was determined.
A short sale is when the bank agrees to sell the property for less than the loan amount. In this case the owner bought the condo during the peak of the market. After the economy dropped the condo was worth way less than her loan amount and she couldn’t afford to pay the mortgage.
The owner had purchased the condo in 2005 and according to the MLS has been trying to sell it since 2007! It was previously listed with a different Kauai Brokerage before being listed with Kauai Dreams Realty. She was trying to do a short sale to avoid foreclosure. One of the main benefits of doing a short sale is that the bank usually agrees to not come after you for the deficiency. For example: if a property was purchased at $400K but now it is only worth $200K the bank agrees to not come after the owner for the extra $200K loss.
7 year long sale condo
I don’t want to discourage anyone from doing a short sale because they are many benefits but it can be a bumpy road. The important thing to remember is to get past those bumps and keep moving forward. Here are some of the bumps in the road I experienced:
-Short sale banks can be over loaded and understaffed. At times I could not reach anyone there and when they did return my call of course it would be 4:00 am Hawaii time.
-Banks are often picky about signatures. I’ve had to get many pages resigned because a party signed as John Smith and not as John A. Smith.
-If doing a HAFA short sale many items will be requested and due immediately. Needing bank statements and signatures within 24 hours. This can be difficult with the time difference in Hawaii and when there is a mainland buyer/seller.
-Lack of communication within large banks. A few times our offers got rejected for no reason. It was due to an internal system error on their part. Then we have to start from point A again.
Luckily, we got transferred to a different servicer and the market picked up a bit. This servicing company barley had issues with the items I listed above and we decided to not do a HAFA short sale. 60 days later we were able to close escrow hooray!
