How Do I Start a Bank of America Short Sale in CA
One of the toughest decisions facing homeowners in Orange County, CA these days is whether or not to do a short sale.
Most homeowners don’t understand the process, but what’s even scarier is that most real estates don’t either. Many agents tend to shy away from short sales because they don’t understand how they work.
#1 – SELECT THE RIGHT AGENT
Like all other professions, real estate agents are not created equally! A Bank of America short sale is a very complicated and arduous type of transaction, and most agents just don’t not where to begin. As a seller, YOU MUST SELECT YOUR AGENT CAREFULLY! Choose an agent that is familiar with Bank of America and who has successfully completed at least a couple of short sales, preferably with multiple lenders. Make sure they know every step of the Bank of America short sale process and have all the tools necessary to meet the demands of the short sale lender. This is CRITICAL and not to be taken lightly. Yes, you may have a friend or family member who is a Realtor, but that doesn’t mean they should be the one handling your Bank of America short sale. Just think about what will happen if something goes wrong, and your home is foreclosed on… now what??
#2 – ASK THE RIGHT QUESTIONS
Most homeowners don’t know what the right questions even are, so here is a short list of things to ask. Again, if your agent can’t answer these quickly and without needing to check, move on .
“How long will this take?”
“What do I need to do while the short sale is progressing?”
“Does it matter if I have 2 DIFFERNENT LENDERS?” – a.k.a. A 1st Mortgage and a 2nd Mortgage
“How will this affect my credit?”
“Will I be subject to a deficiency judgment?”
“What are my tax consequences?”
“Does it matter if I have refinanced?”
The agent you select should immediately know the answers to these questions. If they don’t, it’s a likely a sign that they haven’t been involved in the short sale process or worked on a Bank of America Short Sale. So what do you do? Keep interviewing!! It cannot be overstated just how important this is.
#3 – MOVE OUT OR STAY
If you have a true financial hardship, most lenders will not be surprised to find out you’re still living in the property. While there are many reasons to initiate a short sale, financial hardship is generally the most common. When working with buyers, I often show short sale listings, and most of the time, the homeowner still does reside in the property. This is more common than most people think and not something to be embarrassed about. Times are tough right now, and many people are going through the same or very similar situations right here in your neighborhood. This should not be shocking to Bank of America.
#4 – PROVIDING DOCUMENTATION
All short sale lenders will require similar pieces of information, such as bank statements, tax returns, and pay stubs, and Bank of America is no different. Some lenders will require other pieces of information as well. But whatever they are asking for, it IS required. Bank of America will not review the short sale without it, so don’t think you can hide this information from them. Just provide them what they ask for in as timely a manner as possible, and let Bank of America decide whether or not there’s a reason to not approve the short sale.
#5 – CONTRIBUTIONS
The questions I get most often always seem to revolve around seller contributions. This is a complicated answer and not one easily addressed in a blog. As a generally rule of thumb, CASenate Bill SB 458 has made contributions from a seller illegal in an accepted short sale in, but this only addresses short sales in California, not in any other state. For your Bank of America short sale, I suggest following the link above and reading the SB 458 entirely. I would also be happy to meet with you and explain how this works logistically as part of the short sale process.
Loan modifications are usually rejected, and most lenders won’t tell you that up front. Even in the few cases that are approved, there is generally an amount pushed to the back of the loan, NOT FORGIVEN, just postponed. Most of the time, you will still have to repay your entire loan amount, just in a re-structured manner.
Foreclosures and Deed in Lieu of Foreclosure both carry serious consequences and should be avoided at all costs. Short sales are your best option when dealing with a financial hardship, and even with certain other hardships relating to your home. But make sure your agent knows how to properly navigate you through the process and has experience and success with Bank of America Short Sales in Orange County, Los Angeles County, and Riverside County, CA.
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