Short sales have become more common in today's economy. The length of these sales can vary from 60-120 days in some cases. A short sale is defined as a lender taking what is less than owed on the subject property to settle a debt. This is ideal for the seller because it allows the seller to avoid the credit damage that is associated with most foreclosures.
To initiate the short sale process the seller must contact there lender and explain the hardship. The lender may ask a series of qualifying questions to make sure you are eligible to do a short sale. Once the lender has determined that you are a candidate for this process you will be guided through the short sale process.
The lender will require you to submit the following information. A hardship letter explaining why you you need to do a short sale. You will be asked to give them recent bank statements,w-2 forms or tax records for the past 2 years, checks stubs if you are currently employed and proof that your home is currently on the market for sale with an agent.
Once you receive an offer on the property with copy of the buyers proof of funds the realtor will submit the offer to your bank as well as a HUD or net to seller sheet. Both of these documents can be provided by either your realtor or the closing attorney. This completes the documents the lender will ask for.
The lender conducts an appraisal or what is know as a BPO (BROKERS PRICE OPINION) on the property to get a ballpark value. This is known as market value. The lender will compile all the information gathered analyze it.
The lender can either accept the terms of the contract or negotiate the terms once he has analyzed all the data. Once the buyer and the lender for the seller has come to an agreement on the terms of the sale the lender will issue an approval letter. The closing attorney will use this letter to draft the final HUD statement and prepare to close the loan.
Short sales are often sold as-is and w/o a home warranty due to the hardship of the owner. It is beneficial for a buyer to conduct a home inspection.
Before deciding to do a short sale one should speak with a tax preparer and seek legal advice.
If you have questions about the short sale process please feel free to contact me.
Morrishia Dooley
678-886-8353
dooleymorr26@yahoo.com
One of most informative real estate blogs. Hope to see more good things in next visit. Thank you for this
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