There is nothing short about a short sale…it’s all long!
Some seller’s wait till there is an offer to start the short sale request.
Don’t wait, if your current market value is well below your current principal balance waiting to request a short sale will un-necessarily delay the sale.
If your Realtor tells you that the likely selling price is in a range that you know you will have a deficit (and you don’t have the funds to pay off the difference at closing) you need to shed your embarrassment and be honest from the start.
Why do short sales take so long to complete?
Your FDIC insured lender is required to review the sellers’ financial picture; they must determine if they can recover some if any of the shortfall from the current mortgage holder. This review (lenders due diligence) has added a huge holding pattern to the normal resale process.
What is the lender going to be looking for prior to selling?
A complete financial statement, Tax returns, A list of current assets, W2’s pay stubs, bank statements, current employment and a letter requesting the short sale listing any further hardship issue that affect your ability to pay off the note. If it’s been determined that you have other assets to pay off the note the lender may require an interest in the other assets, or require you to liquidate additional assets to affect the balance of the pay-off. After an offer has been made what will they want?: a copy of the sale contract, listing agreement and an independent appraisal may be requested.
How much time is typically needed to complete this transaction?
A request for a short sale can add up to 8 weeks to the process, so a normal 30 day closing can easily become a three month closing…or with the current appraisal market maybe even 4 months. The best thing a seller can do before even listing the property is contact their bank and start the process. The seller should determine if they qualify for a short sale before they enter a sales contract, or at the very least make sure your Realtor, make the sale conditional upon lenders acceptance of a short sale status.
Completing your due diligence prior to listing will make the sale far less painful for all the parties involved or potentially involved in the transaction.
Even if your hardship is clearly evident the lender has stock holders they report too, you were expected to pay back this loan when you originally signed for it. The lender is going to protect their right afforded by that note as best they can. Talk to an experienced Realtor we are here to help!!.
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Your White Mountain Real Estate Expert.