The Short Sale Process

We understand that you are facing some tough decisions about your financial future and that includes the decision to sell your home. Due to your current financial situation and the market conditions in your area, you need to sell for less than you owe. To sell your home, you need a short sale. As a Short Sale Specialist, your agent will be able to assist you through the process.

Short sales can be stressful and a time-consuming process. But in many cases they are necessary in order to get you out from under mortgage debt, especially when property values are declining. By performing a short sale, you will be able to take a large bite out of the money you owe to your mortgage company.

A Better Alternative

A short sale, if accepted by the lender, is a much better alternative than foreclosure. You will not have a damaging foreclosure mark on your credit, may not have to bring any money to closing even if your home is “underwater,” may avoid bankruptcy, may not need to make any extensive repairs, and could qualify for another home in much less time than if you allowed the bank to foreclose.

**If you are facing a scheduled foreclosure date, be sure to let your agent know. Please also provide them with any paperwork sent to you regarding the foreclosure.

Other Options

Be sure you have explored other options by calling your lender to discuss your eligibility. They will most likely mention that one option may be the short sale of your home. Your lender allows this option to homeowners that qualify as an alternative to foreclosure. Lenders do not like to foreclose because the process is costly for them. They would prefer that you try to sell the property at fair market value even if that amount is less than the loan payoff. Foreclosing on the property will leave them with a property that may take a long time to sell unless deeply discounted.

Do I qualify?

Most homeowners that are facing foreclosure or who are in a ‘must sell’ situation, but cannot sell for the amount owed, do qualify.

To qualify you must be experiencing a true financial hardship, have no equity in your home, no assets, be in default, or be facing imminent default, and be in a market where you cannot sell the home for enough to cover your debt and all other associated closing fees.

The Process: What to Expect?

Step 1: Marketing & Paperwork

The home must be listed for sale at fair market value “subject to your Lender’s approval.” This step is important -it shows your Lender that you are making a diligent effort to sell your home.

To process the Short-Sale your lender requires information and paperwork from you. Please be sure to provide everything required. Any delays or missing paperwork could give your lender reason to close your file. Your agent has a list for you to follow.

Step 2: An offer is received

Step 3: Short Sale package submitted

Step 4: Lender orders an appraisal or BPO Step 5: Negotiations

Step 6: Home is SOLD

Typical Lender Timelines (for each step in the short sale process)

Get authorization on file with lender                                                                           2 days

Compile short sale documents                                                                               7-14 days

Get short sale package on file with lender                                                                 3-7 days

Short sale package assigned to negotiator                                                             10-14 days

Get BPO/Appraisal ordered                                                                                   14-21 days

Schedule BPO/Appraisal with agent                                                                          5-10 days

Time for BPO/Appraisal to get to negotiator                                                             21-28 days

Negotiate/obtain approval from negotiator                                                               15-20 days

Things to Keep in Mind:

• There is no guarantee that any offers will be accepted! Depending on the offer price and other conditions, the lender may say ‘no’ to the first offer that is made on your property.
• The Short Sale Process can take anywhere from 2 to 4 months or longer depending on the foreclosing lender.
• Your Lender or Bank will not allow you to receive any funds at closing. (FHA loans have a pre-foreclosure sale program that allows a Seller incentive)
• You may be liable for a taxable event or deficiency judgment for the difference owed to your Lienholder(s). There are exemptions you may be eligible for. Consult a tax professional.
• You may be able to qualify for another home in two years provided you maintain your credit and income.
• You should always seek legal counsel and the advice of a tax professional.

Calling An Agent – The Best Decision

The Lender prefers to work with Real Estate Agents. They trust that your agent will provide legal, ethical, and experienced assistance. They know that your agent understands the market, your area, and how to properly price, list, and sell a home. The opinions of your agent will be well received by your lender and will ultimately help them make a decision in your favor.

Why is Your Agent The Best to Work With?

Your agent is part of an industry leading team that successfully processes short sales nationwide. They are experienced, they stay current with lender requirements, and they will handle your short sale with expediency and care.

PLUS – your agent will communicate with you via telephone or email every week to update you on the process. You’ll know what’s going on in the process every step of the way.