MICHELLE L. MAYO - REALTOR

Short Sales for Sellers

Certified Distressed Property ReportClick here to see some FAQ’s about Short Sales

When getting together with your real estate professional for your listing appointment – you’ll need to get some documentation together. Outside of a listing agreement and the necessary disclosures, your lender will also be looking for some documentation. Your lender will want you to “qualify” for the short sale. The most common documents the lender will be looking for are your:

  • Two most recent paystubs ( or profit/loss if self-employed)
  • Two most recent bank statements
  • Two most recent tax returns
  • Hardship letter
  • Financial statement

 

It is best to have all this documentation ready up-front to prevent any delays. Your home will then go on the market as any other sale, subject to lien holder approval.

All the documentation above ( if not already submitted ) will be submitted to your lender along with the ratified purchase contract, estimated settlement statement (this will be provided from your short sale attorney) and all listing documents provided by your real estate professional.

After ALL your paperwork has been received and reviewed, the next event that will take place will be an appraisal of your property. Your lender will want to get a grip on the value of your home and will order a or BPO ( Broker’s Price Opinion).

Once this value has been received by the lender, the purchase contract will be weighed against it. The lender will accept, reject or counter the contract.  Your lender will determine their “acceptable” fees and timelines.  Usually some adjustments will be made to the “fees” ( Your lender will generally always pay for all the costs associated with your sale, including real estate commissions, conveyance taxes, attorney fees, junior lien holders, etc.), in order to get the net proceeds of the sale to an acceptable level. The terms of the approval letter will be dissected and sometimes renegotiated. If there are junior lien holders (second mortgages, other liens), repeat the process above. In addition, both first and second lien holders will have to be in agreement with each other in order to get the sale to work.

Once your offer is submitted to the lender, the entire process could take anywhere from two – four months, and sometimes even longer depending on the number of lien holders and each individual lender.

Once this acceptance has been reached, your sale will move forward as any other. There will always be a limited timeframe associated with the short sale approval letter so all parties will want to be prepared to move as quickly as possible to close.