This page describes what a short sale is, how you can utilize this tool, the required steps you need to take and how we can help with the process.
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This will be updated as we find material to place here.
What is a Short Sale?
A short sale is when a seller arranges with their mortgage company to sell their house for less than the amount they owe for the property. Usually the lender will forgive the rest of the loan. Circumstances and/or the market have put the seller in a position where they owe more in mortgages and liens than the home can reasonably sell for in current market conditions.
Why Attempt A Short Sale?
If you do not need to move and can make your current payments, you may want to stay put and ride out the storm. You can wait for the market to improve or for your debt load to lessen. If this is not an option and you need to sell, whether the reason be relocation or financial needs, a short sale is a far better alternative to foreclosures. Typically a foreclosure will be very detrimental to your credit, impacting your FICO Score by up to 300 points. A short sale usually only impacts your score by about 80 points.
With this in mind, don't be concerned about pricing. The only pricing issue will be with the lender, which will order an appraisal to make sure that you are not greatly underselling the home. Your goal is t price your property low enough to generate a quick sale, but high enough that the lender should not resist making the concessions asked of them.
Lenders always allow for real estate commissions to be paid out of proceeds, so there is no need for you to attempt a "For Sale By Owner." You will not save any money on commission and you will probably be inundated with the difficult task of interacting with the lender.
Why Use Our Services?
Most major lenders and many smaller lenders utilize an online transaction management platform to process short sales. The most popular platform is called "Equator." Through this platform, all documents, offers, counter-offers, financial documents, letters of hardship, closing instructions are processed. Most agents are not at all familiar with this tool and would have a very difficult time in navigating it, which would hinder your potential to get a short sale approved.
We have been trained on the Equator system and are Gold Certified - the highest level of certification that is offered. Our ability to utilize the system to it fullest capacity should help you in your efforts to obtain approval for the short sale. We do not know of any other agents in this market that hold this degree of certification.
What Will You Need To Attempt A Short Sale?
Your first step would be to contact your lender(s) to request a short sale packet. They will send you everything that you need to begin the process. If they do not have such a packet, use this as a guide to what you will need to put together. We will present this information once we have a contract for purchase.
- A letter authorizing us to speak on your behalf with the lenders. This will allow us to access the Equator system on your behalf.
- A letter of hardship explaining your financial difficulties. Sign it, date it, put loan # on all pages, and your contact information.
- Documentation supporting your claims: Copies of divorce papers, military transfer papers, employer termination papers and/or medical bills. Put your loan # on every page.
- Copies of your most recent 2 years of Federal Tax Returns with all schedules and W-2 forms. Self-employed must provide business tax returns. Put your loan # on all pages.
- Copies of most recent 2 months of checking and saving statements. Put your loan # on all pages.
- Copies of your most recent 2 months of pay stubs. Self-employed send 2 quarters of profit and loss statements.
This should take care of your requirements, but be prepared for additional requests for information - either new or updated. It is important to respond quickly to such requests, as you want to keep the process moving along. Once it gets delayed, your transaction may be delegated to the bottom of the pile and risk having your buyer lose patience and walk away.