Short Sales, The Art of Selling
July 3rd, 2009
Short Sales are on the rise in our real estate market for a variety of reasons. Many home owners purchased homes with adjustable rate mortgages and with the downturn in the economy have been unable to continue making payments and are unable to work out loan modifications with the mortgage holder. In addition to rising house payments many home owners have been impacted by unplanned for events such as job loss or transfer, divorce or illness resulting in the inability of the borrower to continue making house payments.
Not only is the prospect of losing a home financially troubling it can be an emotionally difficult period as well. No one purchases a home with the thought that a few years later they will lose their home and investment. When events transpire that cause the homeowner to be unable to continue to make payments on their mortgage it is not uncommon for them to feel some sense of remorse or failure. Because this event is personal in nature some find it difficult to discuss the situation with others and are reluctant to seek assistance. Because the short sale process can be very complicated some home owners just walk away from the home or simply wait for the foreclosure process to occur. More pro-active homeowners may decide that a short sale is the right decision for their situation but may be unsure on how to proceed. If you find yourself in this situation there are a couple things to keep in mind.
- Your neighbors need not know that your home for sale is a short sale. The home is marketed much the same as any other home for sale and all references to it being a short sale are in the private remarks section of the listing and only shared with real estate professionals and buyers interested in purchasing your home.
- There is no cost to the home owner to use the professional services of a Realtor to assist with the short sale process.
- A successful short sale will avoid the neighborhood trauma of foreclosure and blight and be a much healthier solution for your neighbors quality of life and property values.
- Not all Realtors have the experience or knowledge to successfully assist you through the short sale process.
- Your Realtor should be able to assist you with all the forms and documents required for a short sale, handle bank negotiations, understand how to complete an accurate BPO showing true market value and develop a pricing strategy that results not just in generating a buyer purchase offer but in a purchase offer that is acceptable to the mortgage holder (lender).
If you are ready to get started on the short sale process you should be prepared to spend some time putting together the short sale package (we can e-mail you all forms). Here is the basic list from start to finish.
1. Authorization to Release Information to Agent. This will allow your Agent to talk with the lender on your behalf.
2. Handwritten hardship letter showing compelling need to sell.
3. Short Sale Listing Agreement.
4. BPO of comparable sales from Listing Agent.
5. Last 2 years W2 Forms all borrowers.
6. Last two years tax returns all borrowers.
7. Last two months bank statements all borrowers.
8. Last two pay stubs all borrowers.
9. Borrowers financial statement. Be sure to accurately list all expenses, as unaccounted discretionary income can be an issue with lender.
10.Detailed estimate for any repairs needed.
11.Fully ratified Purchase Agreement.
11.HUD 1 statement or NET Sheet showing the lender what their NET figure will be and any other expenses owed on the property.
Feel free to contact us for additional information or to get started on the process of selling your home. Our short sale team has a proven track record of success and we look forward to being of service.
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