the short sale process blog

<!--[if !supportLists]-->·         <!--[endif]-->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 /or the market conditions in California or 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, we 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 with 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 or short payoff is 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, 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 us know. Please also provide us 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. The process is costly for them. They would prefer that you try to sell the home at fair market value even if that amount is less than the pay-off. 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

Total: 77-104 days

 

Things to Keep in Mind:

ô€¸ There is no guarantee that all 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.

ô€¸ The Short Sale Process can take anywhere from 2 to 4 months or longer depending on the foreclosing lender. ô€¸ You 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)

ô€¸ You may be liable for a taxable event or deficiency judgment for the difference owed to your Lien holder(s). There are exemptions you may be eligible for. Ask your agent for

details

ô€¸ You may be able to qualify for another home in 2 years provided you maintain your

credit and income.

ô€¸ You should always seek legal counsel and the advice of a tax professional.

If you have general questions or just need to talk to someone about your situation do not hesitate in contacting me.  If I can help you I will direct you to someone who can.