A Short Sale means that, IF APPROVED, the lender will accept current fair market value as payment for the debt owed on the home. Each lender has different guidelines and they will give you a written approval of what they are willing to net and how the process will be handled.
The PROCESS usually starts with the seller listing the home for sale with a Realtor, for fair market value. Once an offer(s) is received it will be presented to the seller and the seller decides to accept or decline. The offer must include a Short Sale Addendum that stipulates that the contract between the seller and buyer is subject to lender approval.
The listing agent then needs to submit to the lender the offer along with any other documents the lender has requested in order to approve the sale. This may include a hardship letter from the homeowner explaining their financial situation, bank statements, tax returns, and an authorization letter allowing the listing agent to discuss details of the loan and sale with the lender, as well as any other documents needed. The agent will also have to include an Estimated HUD1 showing how much the lender will net on the sale.
All this may take weeks or even months depending on how the lender handles these types of transactions and how often the listing agent follows up with them.
The most important thing for the seller to keep in mind is that this is in most cases the last attempt and chance to avoid foreclosure, which is something you DO NOT want on your credit, as it will affect your score for years, and will cost dearly when acquiring credit for other future purchases, such as major credit cards, dept store credit cards, when buying a car, or maybe even when getting a job. It has been reported that some companies are now checking credit history of potential employees.
Sellers must keep in mind that in order to sell a home in the least amount of time, to close before the foreclosure takes place, it is extremely important that the home be ready and able to be shown at all times. This includes the home being properly prepared for sale by cleaning it, de-cluttering it, and organizing or pre-packing some of the homeowner's, allowing the home's best features to be seen by buyers. And it means having a lockbox installed to allow agents to have access when the homeowner is away. And most importantly, as painful as it may be, sellers must be realistic in pricing the home according to their Realtor's suggested price range.
All this is NOT an easy thing to do by any means! Homeowners doing a short sale are not exactly motivated to sell their home for less than what they paid for! Who would be? But, if this a step that must be taken, it is best to accept the situation at hand for the time being, with the certain knowledge that there will be BETTER things to come once the process is over!
If you think I may be of assistance to you, or someone you know, I would be honored for the privilege to be of help.
Proudly serving: Turlock, Modesto, Manteca, Patterson, Hilmar, Atwater, Ceres, Keyes, Hugson, Denair and Waterford.
Comments(0)