Jose Tovar

Broker Associate

 

What is a Short Sale? (the short answer)

A short sale is a sales transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance due on the loan.

Do you owe more than what your home will sell for? Read on to see if a Short Sale can help you!!

 Banks grant short sales for 2 reasons: the seller has a hardship, and the seller owes more on the mortgage than the home is worth.

A few examples of a hardship are:

I can help you prepare a financial package for submission to the short sale bank. Each bank has its own guidelines the basic procedure is similar from bank to bank. The seller's short sale package will most likely consist of: 

Writing the Short Sale Offer and Submitting to the Bank

Before a buyer writes a short sale offer, a buyer should ask his or her agent for a list of comparable sales. Banks are not in the business of giving away a home at rock-bottom pricing. The bank will want to receive somewhat close to market value. The short sale price may have little bearing on market value and may, in fact, be priced below the comparable sales to encourage multiple offers.

After the seller accepts the offer, the listing agent will send the following items to the bank:

If the package is incomplete, the short sale process will be delayed. In this event, the bank might even shred the package.

If your agent insist on working the short sale themself...GET A NEW AGENT!!

If the agent has no experience dealing with loss mitigation and negotiators, the seller is the person who may suffer.

The Short Sale Process at the Bank

Buyers may wait a very long time to get a response from the bank. It is imperative for the listing agent to regularly call the bank and keep careful notes of the short sale process. Buyers may get so tired of waiting for short sale approval that they may feel the need to threaten to cancel if they don't get an answer within a specified time period.

That type of attitude is self-defeating and will not speed up the short sale process. If buyers are the type with little patience, perhaps a short sale is not for them.

 Following is a typical short sale process at the bank: