If you bought a home in the Colorado Springs area from 2004-2006 & are behind on your payments, you need to read this series!

The first 3 articles in the Colorado Short Sale Series give us a solid background for understanding the entire short sale process.  While there aren't a lot of steps, each part requires a good amount of work.

1.  Determine if You Qualify for a Short Sale (30-60 Minutes)

First, you have to see if a short sale is even possible for you.  There are a couple of different ways to find out.  You could ask a short sale expert, like a REALTOR specializing in short sales or a Loss Mitigation Company.  Or you could search the web for a good checklist.  If you haven't already seen it, I've created a quick test for you in the first article, Short Sale Series:  Short Sales in Colorado Springs and EL Paso County Part 2 - Do You Qualify?

2.  Find a Buyer for Your Home (preferably less than 60 Days)

You'll go through all the usual steps to sell your home, just like normal.  In this instance I recommend using a Realtor that actually specializes in short sales.  There are a couple of reasons for this.  The selling part is pretty straight forward.  The biggest challenge is your race against time.  If your late on your payments, every day your home sits on the market brings you one day closer to Foreclosure.  This is where a short sale is different than a regular home sale.  While we want to get as much for your home as possible to satisfy the bank, we also can't afford to wait around until the market changes or the perfect buyer comes along.  There's simply too much at stake.

The key is to find a buyer quickly and efficiently because the next step could take quite a while.  This is where using a Colorado Springs Short Sale Specialist really comes in handy.

3.  Negotiate with the Bank to Approve Your Sale (2 Weeks to 4 Months)

Once you have a signed contract from a buyer, you'll have to prepare a long list of documents and submit them to the bank with your contract and listing agreements.  These inlcude:

• Basic Seller Information
  
  
• Hardship Letter
  
  
• Financial Statement
  
  
• Most Recent Mortgage Statement(s)
  
  
• Copies of Last 2 Months Pay Stubs (or Letter of Explanation)
  
  
• Copies of Last 2 Bank Statements (or Letter of Explanation)
  
  
• Copies of Last 2 Years Tax Returns (or Letter of Explanation)
  
  
• Authorization Letter
  
  
• Comparative Market Analysis or Broker Price Opinion
  
  
• Residential Listing Agreement
  
  
• Signed Contract with Pre-Qualified Buyer
  
  
• HUD-1 (list of expected expenses and payoffs at the agreed upon sales price)
  
  
• Any other paperwork your lender may require

This looks like a lot...and it is...but a good professional will help you put it together in one big package and send it to the bank.  

Believe it or not, submitting the short sale paperwork is the easy part.  Now comes the time where your professional really earns their pay.  Your Short Sale Specialist must call the bank and check on the status of the deal with a Loss Mitigator (a representative of the bank.)  These bank employees are working with anywhere from 40-200 short sale files at any given time.  This can make it difficult to get the Loss Mitigator on the phone or get a quick response.  Your Specialist will spend hours on hold, returning calls and working with the bank to get your sale approved.  With the right system and procedures, your Short Sale Specialist can keep this step closer to 2-6 weeks (rather than up to 4 months.)  Once the bank approves your sale, the rest of the process will move pretty quickly.

4.  Buyer Schedules the Inspection and Appraisal (15-30 Days)

The Buyer can now press ahead with getting ready to close on the house.  Just like a normal sale, they'll schedule a home inspection and an appraisal.  The buyer still has a right to walk away at this point.  Typically (though not always) the buyer already has a good idea of what to expect and likely will want to move ahead with the sale (provided there are no major suprises.)  Remember, they've been waiting nearly as long as you have to get approval from the bank.  Once the inpsection and appraisal are finished we can go to the last step.

5.  Closing (60-90 Minutes)

Finally, after lots of hard work and waiting, you can officially sell your house.  At closing you'll sign over the deed to the buyers.  Your lender will have several other documents you'll need to sign as well.  During closing, your Short Sale Professional will look over all the paperwork with you and answer any questions you might have along the way.  By the time you leave the table, you'll be well on your way to your brand new life.

Contact me if you have questions about your Colorado Springs Short Sale or want to list your house with a Short Sale Specialist.

Along with the previous 3 articles in the series, this post gives you all the basic information on what short sales are and how they work in Colorado Springs and El Paso County.

Read also:

Short Sales in Colorado Springs and El Paso County Part 1 - What is a Short Sale?

Short Sales in Colorado Springs and El Paso County Part 2 - Do You Qualify?

Short Sales in Colorado Springs and El Paso County Part 3 - Pros and Cons

Jamie Mades, REALTOR
Keller Williams Clients Choice
Office: (719) 535-0355
Direct: (719) 322-4645

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Jamie specializes in Colorado Springs homes for sale and Colorado Springs Military Relocation, providing buyer and seller services for homes near Peterson AFB, homes near Fort Carson, homes near Schriever AFB and homes near the Air Force Academy.

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