The Short Sale Process
- Prior to taking your short sale listing, we collect the "Sellers Finacial Packet" from you the seller that will contain all the required documentation the bank needs to determine Short Sale eligibility. At this time the Seller agrees to cooperate with the short sale process.
- We market the property and price the home at, or slightly below, market value until we receive an offer.
- Once we receive an offer, we present the offer to you the seller for approval. While the seller's bank is the one that approves the Short Sale, you're still the owner of the home and the decision maker on all offers received. You will then sign and execute the contract.
- We do not send multiple offers to the bank. They only want to see the best offer, because of the lengthy and time-consuming process for them to sift through multiple offers. As your agents, we will help you determine which offer to send to the bank.
- When the contract is executed between the Buyer and Seller, the home is changed to “Back Up” status in the MLS. This lets potential buyers know we have a contract but are taking back up offers.
- The next step is to submit the fully executed contract, HUD-1 and all of the "Sellers Finacial Packet" to the lender(s) to begin the 60-70 day short sale process.
(Some banks may take longer).
- The bank then does a valuation on what they feel the home is worth, reviews the offer and all corresponding documentation, and at that point makes it's decision to issue an approval.
- Once the bank approves the offer and the completed Short Sale package, they will send us, your Realtors an approval letter listing out all their agreed upon terms of sale.
- Once the bank approves the short sale, we then open escrow and closing takes place within 30-45 days.
Q: Do you charge any fees?
A: No, nothing at all!! There are no up front fees and no fees added when we close. Our service is free to homeowners who need to short sale their house. The lender pays our commission only when we successfully complete your short sale transaction. There is no obligation to see if your house qualifies.
Q:Why should I short sale my home?
A: Foreclosure in not a good option since it can adversely affect your credit record for up to 10 years. Typically, the loan will show up as "Paid" on your credit report; however there can be a notation that says "Settled for less than originally owed." This is much more favorable than having a foreclosure on your credit report.
Q: I have an Investor who says he can buy my house and negotiate a short sale with my bank-Is this okay?
A: This is a very common tactic used by investors to try to buy houses. Do NOT be suckered into this! You will lose either way! Why do they do this? Because they have nothing to lose, they send a low offer to the bank and if the bank accepts it they get a great buy on a house. If it doesn't go through, then you will likely go to foreclosure and it doesn't cost them anything. Either way you lose! Additionally, if it doesn't go through you just wasted valuable time that you could have been using to get realistic short sale offer through.
Q: Why would my lender want to allow a Short Sale to help me?
A: The reason is simple; a short sale often has better return on investment to the lender than a foreclosure. The average savings a lender sees from a short sale property compared with a foreclosure property is $14,000. Lenders spend a great deal of money with attorneys to complete the foreclosure process. Lenders created the short sale process as a foreclosure alternative for those reasons. The incentives to perform a short sale on your property are in place to motivate you to participate.