Dayton Ohio Real Estate

***Disclosure:  Linda Leesman, Linda J Leesman & Associates is NOT an attorney or CPA. 

For legal and tax questions please call your legal council and tax advisor.

What is a SHORT SALE or PRE-FORECLOSURE?

 A short sale may take place when the seller of the property is not able to sell their home for more than what they owe on their mortgages.  The mortgage lender looks at each case individually to see if it is feasible to move forward with a short sale.  A short sale can result in a win for the seller, a win for the buyer, a win for the bank and a win for the Realtor.

Question: As a seller, why would I want to do a short sale?

• It is better to sell short than have a foreclosure on your credit  
• A foreclosure follows you like a bankruptcy does
• You can sell it before it goes to the county courthouse steps at Sheriff's Auction
• You save your dignity and embarrassment
• You can plan, rather than panic and make bad decisions
• It is usually a smoother transition
• It may help you avoid bankruptcy
• There is less worry
• The home is sold "as is". No expensive repairs
• The bank pays the Realtor fees
• You have a 3rd party that understands the process working on your behalf

Question: Why would I want to purchase a short sale versus purchasing at Sheriff's Auction?

• You can see the home before purchasing
• You can do inspections before purchasing
• Usually you can purchase under market value
• You are helping someone out of their hardship
• Keep in mind that if you go into a house without the owner's, bank's or Realtor's approval you are Breaking & Entering
• You may be bidding against someone else at Sheriff's Auction, most likely the bank

Question: Why would the bank want to do a short sale?

• The bank will net the same or more money in less time
• It reduces the non-performing asset inventory which means they don't want to carry a real estate inventory.  An inventory requires a larger reserve which hinders their lending process
• The bank gets their funds within 24 hours of closing versus several days
• Less fees are charged to the bank for holding costs

Question: I heard that some short sales don't close.  Why?

• The seller may have waited too long to take action
• Extra leins appear on the property between short sale approval & closing
• Title cannot be cleared

Question: Will I have a clear title:

• In all real estate transactions you should always have a Title Search performed by an attorney or title company.  You should also purchase Title Insurance at the closing.  If issues arise prior to closing, steps can be taken to remedy the problem.  Be aware that your closing may be delayed.

Question: How can I sell the house with a Realtor if I'm already in trouble?  I don't have the funds to pay you.

• You may be surprised to find that in a short sale, the bank pays the Realtor fees.  Many times, it is less expensive for the bank to sell it prior to foreclosure. 
• The banks require that a Realtor is involved
• To do a short sale, most banks require the house to be listed on the Multiple Listing Service 

Question: Will the bank come back on me for the money they lost? 

• Because the new bankruptcy laws are different, the banks are getting a more stringent about loosing money.  In certain circumstances you may be responsible for a deficiency judgement or you could be given a 1099 at tax time (at this time a new bill has been inacted and the tax liability is waived) and be responsible for paying taxes on the amount of the shortage.  You should consult with an attorney and accountant for additional information.  You will need to decide if this is still better than a bankruptcy or foreclosure.  Most of the time it is.
• I believe in having a great attorney, however, many attorneys will try to talk you into bankruptcy and out of the short sale.  That may not always the right solution for you.  Would you rather have a bankruptcy and foreclosure on your record or do the short sale & repair your credit instead?

Question:  Why should I use you versus one of the investors in the paper or who has been knocking on my door?

• Let me preface this with, as in any profession there are good investors and there are some that are not ethical.  I do work with investors, but only the ones I know have a high level of integrity and ethics.  If that is ever breached, I immediately cease working with them. 
• I understand the short sale process and have a plan to make that happen.  I am a marketing expert and understand how to market short sales.
• Because of my affiliation with the National Association of Realtors, I am held to a higher standard due to the Code of Ethics.   The investor is working on their behalf and some do not have your best interest at heart.   If I am involved, we will be able to tell who is ethical and who is not.
• I keep up with the changes in the industry as far as what is appropriate and what is not.  IRS and the FBI is investigating lenders, real estate agents, title professionals and investors.  If you are told to put your deed in someone else's name and keep the mortgage in your name, BEWARE.  This should only be done with the approval of the bank!  In the past, it wasn't such a big deal, but it is today.  Some people prey on distressed situations.  How would you feel when someone takes your deed and stops making payments on your home? 
• There are "I wanna be an investors" out there that has taken a day course or television course and think they know everything about investing.  They don't!  As in any profession there is a learning curve.  I've taken those courses too and found those classes are very generic and don't give the details of how each state's laws work.  
• BEWARE of the investors that say "No Realtors".  They are concerned about something.  Since the bank pays the fees, it should not be an issue.  You will have a Realtor, attorney and title company monitoring your transaction at no cost to you.  It won't cost the buyer more and the bank involved will know when something is not above board.  

Question:  What does your confidential consultation do for me?

• It will educate you about what to be aware of
• We will discuss your options of selling or foreclosure and what each of those means to you.  
• We will discuss ways that you might be able to keep your home
• We may choose to discuss my plans for marketing your home and my role throughout the process

Question:  How do we pick a Realtor for a short sale?

• Make sure the Realtor understands the short sale process and can explain it to you
• Many Realtors don't want to fool with the processing.  It does take longer and is more involved than a regular transaction
• Ask the Realtor how many short sales they have done in the past year
• Ask what the marketing plan is and how do they find buyers for short sales
• If you want more information about short sales, contact Linda Leesman at 937-610-9058 or email linda.leesman@coldwellbanker.com

What is a FORECLOSURE?

A foreclosure is a legal process where the property is taken away from the mortgagee due to failing to make the payments on a mortgage (1st, 2nd or 3rd), failing to pay taxes or assessments on the property.

Question:  I would like to buy a foreclosed house, how do I go about that?

• You can attend the weekly Sheriff's Auction.  Each county is different on where and when the auctions are held.  Click this link for each counties times & dates Ohio Sheriff's Auctions. 
• If the bank purchases the property they will put it on the market with a real estate expert.  At that time you can schedule a time to view it with your Realtor. 

Question:  How do I obtain a list of what is for sale at the auction:

• Montgomery county Sheriffs Auction 
• Warren County Sheriffs Auction
• Greene County Sheriffs Auction
• Miami County Sheriffs Auction

Question:  What happens at the Auction?

• A description of the property is given, a minimum bid is disclosed, the mortgagor's name is provided and the representative begins the bidding process
• Bidding is done by shouting out what you are willing to bid
• If your bid is awarded you will meet with the officials and sign the appropriate paperwork

Question:  Can I preview the property before the auction?

• The property is not available to see prior to auction.   Be "aware" that if you enter the property without permission prior to the auction and get caught, you will be arrested for breaking and entering.

Question:  Can I ask for repairs to be made?

• Not with homes bought at the sheriff's auction.  Be aware that all sheriff's auction properties are sold "as is".  If the property is bought back by the bank and put on the market with a Realtor, you will be able to preview the property and after an accepted contract, may be able to negotiate repairs with the bank.