1) The first step is to identify the homes value, at Jensen Realty we can provide you a free detailed market analysis of your homes current value, called a BPO or Brokers Price Opinion, this would also be sent with the short sale package.
2) Identify all liens on the home, including first, second, thirds, mechanic, tax, or HOA. Your mortgage company will provide you pay-off amounts. If total debt is more than homes value it might qualify for a short sale
3) Ask a Real Estate professional to help you put together a short sale package, time is of the essence so you want to make sure all required information is sent up at the same time, some lenders have different short sale criteria.
4) Your agent can work directly with the bank in the short sale process but will need your authorization, it's typically a letter with your full name, address, loan number and the last four of your social securitynumber, dated and signed. The letter will state you authorize your agent to act on your behalf regarding stated loan in the short sale process.
5) We recommend placing your home on the market as soon as possible, some lenders require that as part of the short sale process. When we put it on the market it's disclosed that it's in the short sale process and any sale is contingent on the lien holder(s) approval of sale.
6) Your home needs to be priced competitivley, at market value and in the best condition possible, as a rule your home needs to have an accepted offer to be in the short sale process and can fall out of the short sale process and go back to foreclosue department if the purchase agreement is cancelled
7) If you haven't made recent payments it might still be in the foreclosure process, your agent needs to stay in constant contact with your lender(s) to keep them up to date on the status and also check for a scheduled foreclosure sale date. If there is a scheduled foreclosure sale date your agent can request an extension, typically within 10 days of the sale date.
| Typical Short Sale Package
1) Hardship letter with stated reasons you're not able to make the payments followed by documentation
2) Two years filed tax returns
3) One to two months bank statements
4) Two months of pay stubs if employed, if self employed, two months of receipts.
5) Income and expense statement, food, cars, uilities etcetera.
6) Authorization letter from homeowner to the bank(s) allowing your real estate agent to work directly with them through the short sale process
| The Short Sale process, as a rule, takes longer than a typical sale but if the agent is in constant contact with all parties it can usually be expadited, patience is the key. A short sale will still reflect on your credit report but not as bad as a Foreclosure and currently (depending on the situation) there are no tax consequences on the difference between the sale price and amount owed until the end of 2012, and in most cases no out of pocket expense to the homeowner.
We hope this information has been helpful, if a Short Sale is right for you we'll be with you every step of the way. A short sale is still one of several options available to you and include Deed in Lieu, Foreclosure, loan modification and bankruptcy, and have different tax consequences. Check with you with your tax accountant or attorney for more information on these.
Contact our office for more information at (661) 633-2353 glenjensen@earthlink.net
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