Short Sale Process
The Short Sale Process – Stage One:
Call me, Lori Bender. Once you discover that you are even heading toward
defaulting on your mortgage, you need to get started on your resolution
to your problem. The earlier you begin this process with your lender,
the higher your credit standing will be when it is done.
I sold vacant land short a few years back that I owned myself. The
only damage to my credit was one late payment showing up on my credit
report. Back then, you had to actually be behind on payments to be
considered for a short sale. Today, you don’t.
At our first meeting, we will be successful in reviewing the solutions
that are available for your particular circumstances and you will select
the one most beneficial to you and your family.
If a short sale is decided upon as the way for you to go, our first
steps together will be getting your property listed and priced correctly.
We will go through 80% of all the paperwork you will need to complete
on this first visit. I will collect documentation from you to support
our position with your lender. We will go through the property and
record any repairs needed. You do not make repairs. A damage/repair
record helps support our list price with your lender.
The Short Sale Process – Stage Two:
Your home is then entered in the local MLS, and intensive marketing
is implemented by me and my staff. Here is where I begin communicating
with your lender and secondary lien holders. This is a critical stage
as relationships are carefully established between attorneys, bank
negotiators, collection agency personnel, real estate agents and
buyers looking to purchase your home. This is the most time consuming
period for a successful real estate professional when handling a
short sale.
The home is prepared for showing and showings to potential buyers are
begun.
The Short Sale Process – Stage Three:
An offer is accepted. I educate all parties involved in the transaction
as to what a short sale involves. The sales contract is an agreement
between you and your buyer. Remember, you still own the house. You
will sign a likely offer that the lender will accept. The lender
must approve the contract in order for the property to close, buy
you actually do sign the paperwork.
All the proper addendums and proof that your buyer is qualified to
purchase your property are prepared for lender approval.
The Short Sale Process – Stage Four:
All documents that your lender requires to accept a contract are prepared
and submitted to your lender. This package usually contains the executed
contract, a buyer pre-approval letter and proof of funds, a preliminary
closing statement showing the lender how much money they will get
at closing with this contract, the listing agreement between you
and me, a history of marketing and showings of the property, a hardship
letter from you indicating why you can’t make additional payments
on the property, pay stubs, bank statements, tax returns, financial
worksheets, etc… Don’t worry. You and I have already put this paperwork
together at our initial meeting. All we need to do at this point
is update them, if needed.
The short sale negotiator specialist at your bank has a ton of proposals
on his/her desk and they will work on the most complete packages first.
Certified Distressed Property Experts are well prepared in this regard.
My knowledge and preparation makes the strongest argument for your
lender to accept the contract between you and your buyer.
I include market statistics for the Naples area as well as your neighborhood
in particular. I also prepare an ‘Estimated Holding Costs’ document
that shows the lender how much it will be spending if they decide to
deny your short sale.
It may take a week or two to get your lender to approve the contract.
Things may seem quiet to you during this time. Rest assured. I am working
closely with your lender to get them everything they need at this time
to approve your contract. I average 100 pages of documents that I supply
your lender with—everything they need to give us an approval.
I duplicate these efforts with every lien holder on your property (secondary
lenders, equity lines of credit, etc…).
Your bank will send out a person to give them an estimate of value
on the property before they approve the contract. This is not a full
blown appraisal. It is just verification to your lender that the home
is not worth much more than we are saying it is.
During this time, appropriate communications with your buyer’s real
estate agent is critical. We want your buyer to be comfortable that
things are moving along smoothly in their favor.
The Short Sale Process – Stage Five:
In some cases, the bank or banks will take a short sale contract as
is and move to close immediately once they have reviewed your file.
In others, they will begin what can become complicated negotiations
with us. Here is where my experience really works for you in getting
your deal to go through.
If your buyer is having an inspection done, it is done now. If your
lender gives us a counteroffer, it is submitted to your buyer just
as in a routine sale. The buyer may submit a counteroffer right back
to your bank too.
If all parties do not agree and close a contract at this time, we have
accomplished three things. One, a short sale package has been submitted
to your lender and they usually stall a foreclosure at this time and
give us time to work on selling the property first. Two, we have demonstrated
to the bank that we are making every effort to sell the property and
save them from the costs of foreclosure. Three, we have discovered
what the lender will accept. This will make it easier to negotiate
offers and contracts with subsequent buyers.
If a contract is accepted, a revised settlement statement is submitted
to them, a closing date is established, and negotiations for releasing
you from any deficiency judgments are made.
Congratulations! Your short sale is complete.
Please, don’t wait any longer. Take charge of your situation
and get back in the driver’s seat. The earlier you act, the better
negotiating position we have with your bank. There are no miracles
going to happen to save you from the current path you are on unless
you make the call for help today.
Give yourself a second chance.
Call Lori Bender today at (239) 234-0387.
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