Short Sales
What is a Short Sale?
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. This page offers information about the basics of short sales.
The Short Sale Process
The short sale process is still a mystery to many people, even after all these years. Lots of buyer's agents are confused; puzzled buyers are looking for direction, and not every short sale listing agent knows how to do a short sale. Banks grant short sales for two main 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: unemployment/reduced income, divorce, medical emergency, job transfer out of town, bankruptcy, and death.
The seller will need to prepare a financial package for submission to the short sale bank. Each bank has its own guidelines but -- with the exception of a few banks, -- the basic procedure is similar from bank to bank. The seller's short sale package will most likely consist of:
- Letter of authorization, which lets your agent speak to the bank.
- HUD-1 or preliminary net sheet
- Completed financial statement
- Seller's hardship letter
- 2 years of tax returns
- 2 years of W-2s
- Recent payroll stubs
- Last 2 months of bank statements
- Comparative market analysis or list of recent comparable sales
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.
How We Provide the Best Service to Our Clients
Short sales are a reality in today's market. A short sale is a viable option, especially for those who have experienced a hardship which has made it difficult for them to keep up with their financial obligations. It is important that the Seller explore the option of a short sale with his/her accountant and attorney to ensure he/she has a complete understanding of the credit, tax and legal ramifications associated with a short sale.
In order to provide our sellers who may be in a possible short sale situation the best service, we team up with Innovative Financial Resources, Inc. (IFR). IFR is part of our dedicated and professional team that is committed to helping Sellers negotiate with lenders toward the short sale of their property. IFR offers the experience and personalized attention to each client that we expect.
IFR's short sale services include:
- Providing in-depth guidance to both the listing and buyer's agents
- Utilizing innovative strategies to secure agreements between multiple lenders
- Delivery of a compelling financial assessment of seller to lender, including seller's hardship
- Negotiating directly with the lender to close the sale
Contact us for more information to help you decide if a short sale is right for you.
