What is a Certified Distressed Property Expert?
The Certified Distressed Property Expert or CDPE designation could be valuable if you’re a real estate agent. If you’re a buyer or seller, you might also need to know the benefits of working with these professionals.
An Overview of CDPEs
A Certified Distressed Property Expert is someone who earns a designation that allows them to help homeowners with options to avoid foreclosure, primarily through short sale execution. These real estate professionals can help clients avoid scams and identify the solutions that could work best for them.
For agents to earn the designation, they have to complete an online course and pay a fee. They also have to pay yearly membership dues to maintain an active membership.
The online training course focuses on the short sale process and the steps needed to handle distressed property transactions.
These professionals have an understanding of otherwise very complex issues.
The training material includes downloadable courses and coaching hours.
What is a Short Sale?
A short sale is what someone with the CDPE designation specializes in. These transactions are sales when a financially distressed homeowner sells a property for less than what’s due on the mortgage.
The buyer is not a bank and is a third party. All the proceeds from a short sale go to the lender. The lender then has two options. They can forgive whatever remains on balance or get a deficiency judgment against the homeowner, which would require them to pay the difference. There’s a legal requirement for the difference to be forgiven in a short sale in some states.
Before the process of a short sale can start, the lender has to sign off on the decision to execute it. This is known as a pre-foreclosure sale. The lender needs documentation explaining why a short sale makes sense. The process can’t occur without lender approval.
The sales are often long and require a lot of paperwork. They can take up to a year to process, but they’re not as damaging to a homeowner’s credit as a foreclosure.
CDPEs for Buyers
A buyer can benefit from working with someone who has the CDPE designation. They can help buyers identify distressed properties on the market. If you’re a real estate investor or flipper or just looking for a good deal, having someone with first-hand knowledge of these properties can be a big advantage.
The CDPE expert can help you determine which of the available short-sale properties are most likely to receive lender approval.
With short sales, you have to remember that the bank doesn’t have to approve an offer and the short sale request from the seller. Having someone who understands these transactions will help you identify the most viable opportunities and save you some otherwise wasted time.
How CDPEs Help Sellers
A Certified Distressed Property Expert is someone that, as a homeowner, you might turn to if you’re having problems keeping up with your mortgage payments or you think in the next few months you might find yourself in that situation. The sooner you talk to someone, the better.
A CDPE’s role is to evaluate your financial situation and help you find out the available options.
When you first meet with a CDPE, you explain why you’re behind in your payments or why you expect you will be.
The CDPE will go over your income and expenses and learn how far behind you are on mortgage payments.
The only option might be to pursue a short sale depending on your situation. If so, the CDPE helps you get a short sale package ready for a lender. The package will detail your hardship, the current market value of your home, and your finances.
After the package is complete and you’re moving forward, the agent can put your property on the market.
