Most people cringe when they hear talk about Short Sales. This is generally because they don’t understand the process, and everything that a short sale entails.
Simply put, a ‘short sale’ involves a sale of real estate in which the ‘sale’ values fall ‘short’ of the remaining balance that is owed to a lender on that property.
This usually happens when a borrower needs to seller their property, but the current market value is not enough to cover the outstanding loan value. Or, it might occur if the property owner has stopped making their mortgage payments due to loss of income or some other hardship. The bank may prefer accepting a short sale rather than foreclosing on the property.
Mortgage Lenders will
usually grant a short sale for one or two reasons:
1: The seller has a hardship such as; medical emergency, unemployment, bankruptcy etc.
2: The seller still owes more on the remaining mortgage than the property is currently worth and needs to sell.
The Sellers side;
Approval for this procedure requires a financial package, including: letter of authorization, financial statements, hardship letter, payroll stubs, bank statements etc. which the seller would then submit to the lender.
Each bank has different guidelines to this procedure. Working closely with an agent that is familiar with this industry would improve your chances of a successful short sale! Ask any agent you are considering how many successful short sales they have handled in the past 2 years. If they give you a number, ask for a list of addresses (to keep them from giving you a “fluff” number). An experienced agent has nothing to hide about his or her performance. There are a lot of beginners out there right now just starting to handle short sales and they may not have the experience required to get you the results you need.
The Buyers side;
Before writing an offer, the buyer does well to obtain a Comparative Market Analysis from his agent, since banks do not tend to sell property for much less than its current estimated value.
After the seller accepts an offer, the rest of the process will probably be transferred to the bank. It is important for your agent, or their title company, to stay in constant contact with the bank. Our team contacts the banks at least twice a week on all of our short sales. The purpose is to make sure that no one is waiting on us or our clients. We always get them any documents they require as quickly as possible, so that at any given time we are waiting on the short sale lender, not on us.
The rest of the procedure can be lengthy at times. So much so that it’s not uncommon for a buyer to back out.
Some short sales can be approved within 6 to 8 weeks. But on average it takes between 90 and 120 days.
** Taranto Realty is a full service real estate company providing creative answers to today's real estate transactions.
Tom Taranto is active in handling short sales in Brevard County Florida, Indialantic, Satellite Beach, the Town of Malabar, Grant Valkaria, Palm Bay, Melbourne, Melbourne Village, Melbourne Beach, Viera, and many other parts of Florida. Call me with any questions or comments at 321-961-2871 firstname.lastname@example.org www.TomTarantoRealty.com