Do You Need to Do a Short Sale?
What is a short sale? A short sale is the term used in the real estate industry for homes being sold by the owner for less than what is owed on the mortgage. The owner asks the lender to accept less than the loan amount due.
What qualifies an owner for a short sale?
For a homeowner to successfully negotiate a short sale, he/she must be experiencing a financial hardship. The hardship can be due to reduced income, job loss, loss of a spouse, any number of things. The seller must be able and willing to provide evidence of this hardship. The seller must write a brief letter explaining what occurred and be able to provide verification of income loss. This documentation is provided to the lender.
What is involved in a short sale? Several things need to occur and they occur in a specific order.
1. The homeowner contacts a realtor, obtains a market analysis and together determines what the property will sell for in the current market.
2. The seller enters into a contract with a Realtor to sell the property. The paperwork is all identical to regular sale with some additional informational documentation.
3. There are no costs to the owner for the process of listing the property
4. The property is marketed without advertising it is a short sale.
5. The marketing of the property brings an offer.
6. The seller approves the offer.
What happens after an offer is obtained? Once an offer is obtained and the listing and purchase contract are sent to the lender along with the hardship paperwork, the lender begins to process the short sale. First an appraisal is ordered. Then a negotiator is assigned.
How long does the process take? The process can take weeks. On the average a short sale can obtain approval in 45 days. It depends on how organized and prepared the lender is. Time length also depends on how many loans are involved. If there is a first and a second and the second is with a different lender, the process may take longer. The earlier one begins the short sale process after a missed payment, the better as more time is available.
Who negotiates with the lender? The seller gives authorization to the Realtor to negotiate. The Realtor may use a facilitator to assist and make the lengthy phone contacts necessary. Often this relieves both the seller and Realtor of much of the time consuming process. There is no cost to the seller for the facilitator.
What are the benefits of a short sale? If the property is sold and the home does not go into foreclosure, the credit of the homeowner will not be affected to the same degree as a foreclosure. Purchasing power is not affected for as long a time and it may be possible to clear the late payments. Consult an accountant or credit expert for full information regarding this process.
Would you like a short sale consultation? If so, please fill out the form below or call Carla at 707 330-0808 and I would be glad to meet with you personally and confidentially and explain the process, time frames and marketing. I am successfully getting my short sales completed in two to six weeks.