Short Sale – A Homeowners Story

My husband and I both have always done things the ‘right’ way. We went to college, secured good jobs, paid our taxes and bills on time, started a family and decided to buy a home when we had saved enough to do so. It was the American Dream and a smart investment.  Things were really working out and we didn’t realize just how lucky we were at the time.

When the economy started to make a turn for the worst we weren’t affected at first but slowly we saw our fellow co-workers getting laid off, having their hours cut back and wages being reduced. It was only a short period of time before the same began to happen to us. I was forced to a part-time position and my husband’s opportunity for overtime became a thing of the past. Home values in our neighborhood had plummeted and we were stuck making payments on a home that we couldn’t afford and was worth about half of what we owed to the bank.

We had heard of many people losing their homes to foreclosure and couldn’t imagine our family going through something like that. We made several calls to our lenders to see about a loan modification and after months of providing them with endless stacks of our financial information they determined that we were not eligible. We were worried about our credit and tried our best to make ends meet but it seemed almost pointless to continue struggling to make our mortgage payment knowing that the value of our home was continuing to decline with no possibility that things would improve. Throughout the loan modification process we had stopped paying on our mortgage and were falling further and further behind. We received calls from our lenders constantly, trying to get us to pay our mortgage current.

That’s when we decided to look into a Short Sale. I started by searching the internet for short sale real estate agents in El Dorado Hills and quickly found Connie Barnes’ RE/MAX website which stood out with good information including the fact that they were already Short Sale Certified with our bank.  That helped convince me these are the people we need to talk to about our next steps.

After many long talks with my husband we decided to make the call and invite Connie and her team to our home to discuss our options. They were really helpful and very genuine in wanting to help us.  They understood that we might not want to have a For Sale Sign in the yard and had great confidence in her ability to market the home and get offers coming in.  Connie has an experienced negotiator on her team who has had great success in getting Short Sales approved.  We felt comfortable knowing that we would have a team of experienced professionals helping us through this situation. 

They provided us with sample Short Sale and Listing paperwork and advised us to discuss our options with a real estate attorney and our CPA so that we would fully understand any potential tax and/or legal ramifications. Fortunately they had experience helping other homeowners in our same situation so a lot of the shame and embarrassment we initially felt subsided some.

We took their advice and consulted with both an attorney and CPA before determining that a Short Sale was in fact the best solution for us. Connie and her team needed all of the same information that our lenders did for consideration of the loan modification; tax returns, paystubs, bank statements, a list of all our monthly expenses, and a hardship letter describing specifically why we were unable to pay our mortgage, etc.

When it came to get the home ready for sale, it didn’t occur to me that we would be getting such a high level of service from our Realtor on a short sale. They helped us with staging, arranging and spent the time to take really amazing photographs of the home.

Once the home went on the market we had an offer within a week at which point Connie’s Short Sale Negotiator took over. Callie Mirsky initiated Short Sale negotiations with both the 1st and 2nd mortgage lenders.

Callie warned us that this step in the process would take some time and that we would have to provide updated information as the banks requested it. Throughout all of this we continued to receive calls from the banks looking for payment as Connie’s team had told us we would. Connie told us that a Short Sale doesn’t stop the foreclosure process but could sometimes delay it and that hopefully we would receive an approval before it came to that.

Her team provided us with weekly updates and finally we received an approval from the 1st lender. It was still another couple of weeks before we received an approval from the 2nd lender but they were able to come to terms after some creativity. This part was stressful because the 2nd lender wanted more money than the 1st was willing to contribute toward their payoff. We were given the option of signing a Promissory Note or paying them additional money at closing. Connie’s team was able to negotiate the amount down to a figure we could manage and we paid them upon closing to just be done with it. We were lucky that the buyer was still interested in our home after months of negotiation. Connie had told us that buyers will often back out due to the length of time that it takes to receive an approval from the banks.

Finally we were in escrow and selling our home. It seemed strange to have to pay additional money to rid ourselves of the home that had become such a burden but at that point we were relieved to do so. Our credit was affected, but not as bad as it could have been had we lost the home to foreclosure and the real estate attorney had advised us that our loans were such that the banks wouldn’t be able to come after us for the remaining balance. We were ultimately very relieved to be moving on with our lives and know that in a few years we will hopefully be in a position to buy another home at a more stable value and manageable interest rate.

Connie and her team were very thorough, professional and caring. They helped us through a very difficult time and I will forever be thankful. We have found a rental and are simply moving on with our lives, repairing our credit and looking forward to the future with less stress.