SHORT SALE STRATEGIES

When to sell short

At time when a home has lost significant market value and a homeowner has a need to move because of a loss of a job, illness, divorce or death in the family, the Short Sale is a good alternative from walking away from a home and letting it go into foreclosure.

Allow time to market a short sale

As its name implies, the sale of a home is a short sale because the net proceeds from any market sale will be less than the amount owed on the property. 

The Process

Before a mortgage company will consider a short sale, the property usually needs to be marketed for a period of time.  This varies among banks, so the best course of action is to place the home on the market as soon as possible to avoid foreclosure before the short sale can be completed.

The Lender(s)

During the last decade, homebuyers often purchased homes using two mortgages, a first and second lien is created for the two.  In this case, the short sale must be approved by both lenders.

Processing a Short Sale Offer

Once an offer is received it has to be packaged with other documents and submitted for approval. There are about nine or ten documents required, and all documents must be submitted together or the offer may not be considered.  As your Realtor, Brian Patrick will use his considerable skills to document the file correctly and send it to the lender(s).

Documents Needed

1.  Signed offer with copy of earnest money check

2.  Pre-Qualification letter or proof of funds for buyer

3.  Personal financial statement

4.  Last two years' federal income tax returns

5.  Last two months' bank statements

6.  Hardship letter outlining the reasons for the difficulties

7.  Pay stubs for the last 30 days

8.  Listing Agreement

9.  Preliminary HUD-1 or Seller's Net Sheet

10. Letters authorizing Realtor to speak with mortgage companies

What Selling Expenses Are Allowed?

Most ordinary expenses are allowed except for the survey costs, homebuyer's warranty, past due property taxes and HOA fees, etc.  The policies of mortgage companies may vary, so we make it a policy to check with the mortgage company to see what is allowed.  In some cases, the commissions may be limited to 5%, again based on what the mortgage company and it's investor allows to be paid.

What Does the Seller Receive from the Sale?

The new Making Home Affordable Program from the federal government allows a Seller to receive up to $1,500 in incentives under certain circumstances.  otherwise the Seller cannot receive anything.