What is a short sale? It's when homeowners in a bad financial situation sell their home for less than the amount due on the mortgage, and all proceeds revert to the lender. This is sometimes referred to as being underwater. And while short sales can be an appealing alternative to a foreclosure, it's not necessarily an easier process. If you live in Chevy Chase, Rosemary Hills, or any other neighborhood and are contemplating a short sale, here are some things you need to know from the AOL Real Estate website.
Consult the Experts - If you're considering a short-sell, talk to three crucial people: a CPA, a real estate attorney, and a qualified real estate agent. They will know your state's laws regarding short sales and foreclosures and can help you determine if a foreclosure would be better than a short sale in your specific situation.
Use a Qualified Agent - Many agents will say they are short-sale experts when they have no real field experience. To find a qualified agent, look for the title Certified Distressed Property Expert (CDPE) or National Association of Realtors Short Sale Specialist. Then ask how many short sale listings they currently have and request names and phone numbers of their last five short-sale clients.
Verify Your Home's Value - You can do this yourself using various on-line tools, you can ask your real estate agent to give you an estimate, or you can use an independent appraiser. Use the Appraisal Institute website to find someone in your area. Know that your lender will want the house priced as close as possible to market value.
List Appropriately - This is a key step. Start out listing your home at slightly above market value and then lower the price at pre-determined intervals until you get an offer. This will show your lender that you're trying to get them the most for your home. It's a balancing act of enticing buyers while satisfying a lender's profit needs.
Make Your Package - This includes, but is not limited to, a hardship letter, tax returns from the past two years, and last two pay stubs. The entire package could be 60 to 80 pages. Be sure all required documents are there or the bank could put off your short sale.
Be Patient - It can take 30 to 45 days for the lender to get your package, input your information, and assign a negotiator to the sale. You could actually wait as long as three months for this.
Negotiate - The lender's negotiator will offer you an appraisal or broker price option (BPO) of your home. If a buyer's offer is within five percent of the BPO and the lender has all your information, the short sale will be approved. If the offer is too low, the lender might come back with a higher sale price. Negotiations will follow, but that's just how it's done.
The entire short sale process can take from six weeks to a year or longer, but don't get discouraged. If you have a good team behind you, you'll end up making the sale and will be satisfied with the results.
Contact me, Mynor Herrera, today for expert help buying or selling in the DC, MD, & VA areas! I also specialize in Bethesda and Chevy Chase, as well as the sub-divisions of Rosemary Hills, Rock Creek Forest, East Bethesda & Whitehall Condominium.
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