Short Sale How-To
First things first let’s define our terms – a short sale is when a homeowner owes more on their home than they can sell it for on the market. And short sales can be tricky. The number one thing to remember about a short sale is that there is a right way to do a short sale and a wrong way to do a short sale. The wrong way can cost you thousands of dollars, months of your time and unknown damage to your credit. The good news is, doing a short sale the right way can mean freedom from an underwater home and to create a position of advantage for investing in a new property.
To learn more about whether a short sale is a good option for you, visit Effects of a Foreclosure vs. Short Sale.
Now that you’ve read through your options, the other good news is that I’m here to help. I have 100% success rate when it comes to successfully marketing and selling short sale properties. One of my primary focuses is to keep you from throwing good money after bad. With all the experience of a short sale negotiator (and none of the extra cost), I have relationships with many of the top banks, including Wells Fargo, Chase, Bank of America, PNC and many others. The key to navigating your short sale is a thorough understanding of the process, all of which I can help you understand.
For starters, however, this is something like how the process goes:
1) Consult a tax attorney.
You should have exhausted your options for a loan modification. Consult your tax attorney to ensure that you are considering all of the tax implications of your potential short sale.
2) Complete your hardship packet for the bank.
Once you’ve decided to proceed with your short sale, I will contact the bank and get a hardship package for you to complete. Your hardship package is a critical component of your short sale. Here is a list of items your bank may require:
1. Personal handwritten hardship letter. This letter explains to the bank the situation you are in which necessitates a short sale. This is the first opportunity to misstep that may cost you money.
To avoid this, here is some guidance:
2. Authorization To Release form. This release applies to borrowers who are using a third party professional. This allows the bank to release any required information about your account to your advisers.
4. Last 2 months of bank statements. In order to establish proof of an economic hardship, the bank will need to see your previous two months of bank statements.
5. Two years of W2s. This will help the bank establish your work history.
6. Last 2 years of tax returns. Should you be more than a few years delinquent on your taxes, this may cause issues with your short sale application.
7. Detailed list of monthly expenses v. income. Similarly to how the bank assessed your debt-to-income ratio when you applied for your loan, so they will reassess it to gauge the level of distress that you are facing as a homeowner.
8. Signed listing agreement. You will have to have signed a listing agreement with a Realtor in order for the bank to review your file. This shows them that you are indeed intending to proceed with the sale of your home.
9. Recent mortgage statements. This includes statements for all loans that exist on the property.
10.HUD statement from your last transaction (if available).
3) The bank will coordinate a Broker’s Price Opinion or BPO. For more on BPO’s, visit here.
If you are asking questions about whether you qualify, what it means to take on a short sale or what is the next step? Contact ME anytime.
More Resources to Help You With Your Short Sale
I approach my real estate practice with a commitment to provide superior service. I have a passion for my chosen career and look forward to being your tenacious advocate for all your real estate needs.
Be assured that when you hire me, I will do an exceptional job for you. You can count on my honesty and trustworthiness, which for me is non-negotiable.
I look forward to working with you.
"Sonali is a 1st class agent. My home sold the first day it went on the market. I was travelling out of town during this time and Sonali was exceptionally efficient in taking care of all the details regarding the sale of my house. She took care of all the details in a very professional and efficient manner. She was exceptionally thorough in her service."
- Barbara Usher
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