Short sales can be some of the most challenging real estate transactions, especially when family is involved. In this case, Isaias, a family member of my partner (and better half Lucia :-), needed help avoiding foreclosure on his Mesa, AZ home.
With financial difficulties mounting, Isaias and his wife were in over their heads, struggling to understand the real estate process and faced with the possibility of losing their home. They trusted me to guide them through the complexities of a short sale, knowing that my experience could make the difference between financial ruin and a chance to start over.
The Seller's Challenge:
Financial Struggles and Language Barriers
Isaias and his wife were dealing with significant challenges—Isaias had lost his construction job, and their savings were depleted. On top of that, they owed over $200,000 on their mortgage, while the property was outdated and in disrepair.
Adding to the difficulty, neither Isaias nor his wife spoke English fluently, which made the process even more daunting. They were overwhelmed by the idea of a short sale, but knew it was their only option to avoid foreclosure and save their credit.
We didn't know how we could sell our home and save our credit or even where to start. Rafael and Lucia made us feel supported every step of the way."
Isaias Lopez
Distressed Homeseller
Thankfully, my partner Lucia and I are both bilingual, allowing us to communicate clearly and provide the support they needed throughout the entire process.
A House in Need of Rescue
These photos highlight the deferred maintenance and disrepair throughout the property, providing context for the negotiations with Bank of America. While the condition presented challenges, it also created leverage to achieve a low short sale price.
Our Approach:
Planning, Transparency, and Advocacy
Isaias was in a difficult spot, but he trusted us to handle the sale of his property. Our first step was to have an honest conversation with him and his wife about the realities of a short sale, including the benefits and drawbacks. I walked them through the entire process, ensuring they understood that a short sale meant they wouldn’t receive any proceeds from the sale—but it would save them from foreclosure and the resulting damage to their credit.
We agreed to list the property at $64,900, and I began negotiations with the lender to allow a short payoff. It was critical that Isaias knew I was fighting for the best outcome for him, even though the process was bound to be long and challenging. I also leveraged my experience in working with distressed properties and short sales to create a strategy for marketing the home to investors, who would see the potential for a profitable rehab project.
Step 1.
Initial consultation with Isaias and his wife to explain the short sale process
Step 2.
Ran sales comparisons, market trends, and inspected the property
Step 3.
Developed a strategy for listing and negotiating with the bank
Step 4.
Listed the property and began marketing to investors
Step 5.
Managed multiple inquiries and offers, navigating the ups and downs of buyer negotiations
Step 6.
Negotiated with the lender for a reduced payoff to secure the short sale
Making the Impossible Happen
The formal short sale acceptance letter from Bank of America demonstrates the meticulous negotiation process required to secure lender approval. It highlights how our expertise overcame challenges many agents faced when dealing with this lender.
The Results That Made the Difference
The short sale process was not easy—there were multiple buyers who backed out, bank delays, and challenges getting lender approvals. Despite these setbacks, I remained dedicated to the sellers, pushing through every obstacle. After four months and a $17,500 price reduction, we finally received two solid offers. One was too low, but the second offer came in at $49,000 with proof of funds.
After nearly six months of negotiation and back-and-forth with the lender, they finally agreed to the reduced payoff. Isaias and his wife were able to avoid foreclosure, saving their credit from the worst-case scenario. While it wasn’t easy, the outcome provided them a chance to rebuild their financial future without the weight of foreclosure holding them back.
4 Months to Offer: Overcoming Market Obstacles
Listed the property and secured an offer within four months, navigating through a challenging market and multiple buyer hesitations.
$150K Reduction: Maximizing the Seller’s Relief
Successfully negotiated a $150,000+ reduction in the mortgage payoff, gaining lender approval and easing the seller’s burden.
Foreclosure Avoided: A Path to Recovery
Assisted the sellers in avoiding foreclosure, preserving their credit and providing a foundation for financial recovery.
The Case for Compassion
The seller’s hardship letter and financial statement reveal the gravity of Isaias’s situation, including zero income and reliance on his daughter’s support. These documents were critical in persuading the lender to approve a significant mortgage balance reduction.
“Rafael achieved what seemed impossible with my short sale!”
After a year of obstacles, including multiple buyers backing out and bank delays, Rafael managed to close my short sale for $49,000 against a loan balance of over $225,000. His persistence and problem-solving skills made a stressful situation manageable, and I’m extremely grateful for his work. I highly recommend Rafael for anyone dealing with challenging real estate transactions.
Top Tips for Navigating a Short Sale as a Seller
Short sales can be overwhelming, but having a clear plan and a trusted partner can make all the difference. Here are some top takeaways from Isaias’s case that might help others in similar situations:
top tips for
realty success
Understand the Reality of a Short Sale
It’s important to know that you won’t receive proceeds from the sale, but avoiding foreclosure is a huge benefit for your credit.
Work with Someone You Trust
A short sale involves a lot of moving parts and lengthy negotiations. Having someone you trust, who will advocate for you, is crucial.
Patience is Key
Short sales can take many months to complete. Staying patient and keeping a long-term perspective will help you get through the challenges.
Navigating Extensive Requirements
Bank of America’s custom short sale addendum and disclosures showcase the extensive terms and conditions required for approval. This document illustrates the complexity and diligence involved in meeting the bank’s stringent legal and logistical requirements.
Lessons Learned: Persistence Pays Off
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The biggest lesson from this case was the importance of persistence. Short sales can be frustrating, with delays, changing buyer interest, and bank backlogs. But by staying committed to the process and continuously following up with the lender, I was able to get Isaias the outcome he needed.
Additionally, this case highlighted the importance of having a support system, especially when language barriers add an extra layer of complexity. Being able to communicate effectively in Spanish made all the difference in helping Isaias and his wife feel supported and informed throughout the process.
Ready to Navigate Tough Real Estate Challenges?
If you’re facing financial difficulties and need a trusted partner to guide you through a short sale or other challenging real estate situations, my team and I are here to help. With experience, dedication, and a personal approach, we’ll work with you to find the best solution.