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The Sacramento, Carmichael Short Sale Process

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Education & Training with Master Your Market Real Estate Coaching

While I’ve got an absolutely FREE BOOK on short sales, I thought, for those folks who don’t want to read the whole thing, I would write a post that lays out the basic process so they can be prepared. Please note, this is for primary residences..things are different for investment properties, which I will explain in a different post.

So who can short sale their home? Anyone. It used to be that you had to have a bonafide “hardship,” but as the economic crunch has worsened, just the fact that the value of your property had declined so dramatically tends to be reason enough. You will still need to fill out a hardship letter, which your agent can instruct you on.

Should I do a loan modification (or, what if I’m currently trying to)? When all the talk of loan modifications first started, I thought they were a great idea. So great, in fact, that I went and got certified in conducting them. I no longer do them or recommend them. Too much for this post, but suffice it to say that most of the time, they don’t work.

Why should I do a short sale instead of just walking away? Really? Have you not seen all my videos on this? Basically, a short sale forgives you of the debt, affects your credit MUCH LESS (so you CAN still buy much sooner then with a foreclosure), and in some cases (with HAFA lenders) you may even get money to help you move. And, let’s not forgot the whole dignity thing. Much better to not to have a “FORECLOSED” sign slapped on your front door for the whole world to see.

When Should I list my home? The sooner the better. If you haven’t paid your mortgage, it will only be a matter of time until you receive a “Notice of Default.” If it’s gotten to that point, CALL A SHORT SALE CERTIFIED AGENT ASAP. So many people, understandably, find it easier to avoid and ignore things that cause us pain. That’s just normal. However, in this case, if you stick your head in the sand, the storm doesn’t go away….it only gets worse. The longer you wait to list your home, the more likely the short sale will not be approved because it goes to auction within a certain period of time. More and more lenders are tightening up. For instance, I used to jump in and be able to get an auction/foreclosure postponed in the nick of time to short sale a home. However, I’m not even tackling this anymore because lenders are simply refusing to postpone auction dates. And it really makes sense….if you haven’t been paying your mortgage, you have plenty of time to figure out you should do a short sale, so waiting till the last minute is really like shooting yourself in the foot.

Note: even if you have been paying your mortgage, you can still try for a short sale. But no matter what, keep your property taxes and HOA dues current.

What will I need to list my home? Initially, you won’t need anything but a qualified, certified short sale agent. For me personally, I tend to only work with sellers who are able to use email and/or fax….why? because once the process really gets started, I will need current bank statements and pay stubs on a regular basis.

What happens next? Your agent will list the house, pricing it appropriately (a price that meets the lender’s requirement for short sale math). When an offer comes in, all the action really starts. At this point, your agent will need almost all the stuff you provided when you first bought the house (or if you recently tried for a loan mod). For instance, 2 years of tax returns, a financial statement, your last 2 pay stubs, a hardship letter and your 2 most recent bank statements (even the blank pages!). You will also need to sign a “third party authorization” form which gives your agent your permission to deal with the lender.

And then? This is the hard part where most rejections occur. Your agent will need to call the lender. This sounds easy, but if you’ve ever tried to modify you loan, you know what a run around it can be. It’s no different for agents. We have no magic telephone number. The banks will lose paperwork, they will say they didn’t get things that were honestly sent in, and one person will say one thing that another person says is wrong.  This is why you must hire an agent who is relentless in calling banks, documenting conversations, responding immediately, and keeping track of the status.

The most important part for you, from this point, is that when your agent asks you for recent pay stubs and bank statements, that you get it to her right away. One missing document can throw every off. Remember, agents have no guarantee of getting paid for their services, so chances are, a short sale specialist is really trying to help you and you in turn must be cooperative and responsive to whatever the agent needs to help you best.

Hope that helps!

Read the book and let me know if you have any questions.


Tamara

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Visit my blog at www.InLoveWithSacto.tv, Listen to my radio show at www.InLoveWithSacto.com

 

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