How to do a Short Sale

How To Do a Short Sale . . .

Definition: A short sale is the sale of property when the sales price is less than the amount of the loan secured by the property.

Short Sales are common in the real estate market today because of the rapid depreciation and foreclosures that have occurred recently. If you currently owe more than your home is worth, you may want to consider a short sale. You may be able to do a short sale if you are current or behind on your payments. In either case, you will need the approval of your mortgage holder in order to successfully complete a short sale.

The first step to a successful short sale is to establish a plan of action. There are people and services that can assist you. You will need a good real estate agent and a good title/escrow officer. You may also want to consider the assistance of an attorney or accountant.
A good real estate agent who is experienced in short sales, especially a Realtor©, can be indispensable. ( For a list of qualified short sale agents: Click Here ). They can recommend a good title/escrow officer; and assist you through the entire short sale process. They will also have suggestions for other people and services you may need as you proceed. Experience is the most valuable asset that a good real estate agent can provide you to get you through the short sale process.

The second step to a successful short sale is to gather the necessary information. You will need information about your home and your personal situation.


Home Information	Personal Information

Current Market Value First Mortgage Holder First Loan Balance First Loan Number First Loan Payment Contact Person Contact Phone Number Second Mortgage Holder Second Loan Balance Second Loan Number Second Loan Payment Contact Person Contact Phone Number Tax Payment Insurance Payment Lenders Specific Pkg's Listing Agreement Purchase Agreement Buyers Pre-Qualification Letter Buyers Proof of Funds BPO ( Broker's Price Opinion )	Social Security Numbers Third Party Authorization Hardship Letter Financial Statement Current Income Employer Paystubs or P&L Unemployment Bank Statements Tax Returns IRS Form 4506-T List of Assets Current Expenses Home Owners Ass. Fees Car Payments Credit Card Payments Other Loan Payments Utilities Payments Insurance Payments Medical Payments Child Support Payments Alimony Payments Food Miscellaneous

As you collect the necessary information, submit it to your real estate agent so they can get it to the lender. The lender will not even begin to process a short sale until they have received all of the information. At that time they will assign a negotiator to handle your case.

While you are gathering your information, your real estate agent will put your home on the market for potential buyers. Your agent will inform you as to what you can do to get your home ready for sale and to make it more marketable. They can also help you determine your best course of action after you have successfully completed the short sale.

When all of your information has been assembled, submitted to the lender, a negotiator has been assigned, a buyer has been found and a purchase agreement submitted; then the waiting process begins. It can take weeks or months to hear anything from the lender. They may want you to update your information several times. It still may take longer. The lender may deny or accept the purchase agreement as is, or they may come back with a counter offer. At this time, you can accept the terms, or not. There are many details to a short sale that are specific to each circumstance. Your real estate agent can explain your options to you so you can make an educated decision.

Once you have an agreement with the lender, they will specify a closing date; usually about 30 days from the day of acceptance. From then until closing, there are several items you need to attend to. The most important of these is for you to make arrangements for your move. Your real estate agent will continue to assist you throughout this entire process.

There may be tax implications associated with a short sale. For assistance with your taxes, you should enlist the services of a good tax attorney or tax accountant.

There may also be legal ramifications to a short sale. For information regarding any legal issues, you should consult the advice of a good attorney.

For a list of qualified short sale agents: Click Here

Article provided by Michael Wrage, Broker for New Homes Research, with over 35 years of real estate experience.