Short Sale Process

If you feel you are upside down on the value of your home to what you paid for it, have experienced a hardship, need more information and or want to sell your home to get out of a bad situation; Call or Email Kevin for help at (904) 699-1900 kevinmanselp@remax.net

 Do you have a good case for a short sale!

A short sale is the sale of  a home in which the proceeds from selling your property fall short of the balance of debts due and secured by liens against your property, and you as the property owner cannot afford to repay the full amount of the loan due to a hardship. Under the Mortgage Forgiveness & Debt Relief Act the lien holders may agree to release their lien on your principle residence. The lien holders agree to release their lien on the property and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency. Under the Mortgage Forgiveness & Debt Relief Act the lien holders may agree to release their lien on your principle residence.

You cannot apply for a short sale with your lender until you have an offer on your property. The costs to sell your property are usually paid by the lender including the realtor fees.

A short sale usually is a good alternative to foreclosure.

All lenders have varying requirements and may demand that a borrower provide an array of documentation, the following steps will give you a good idea of what those requirements may be: 

1.     List the Home with a Realtor on the MLS for Sale

The Realtor will place your property on the local MLS to locate a buyer for the property. Although you will have to sign a listing agreement with the real estate agent, all the terms of the listing agreement are contingent upon the lender approving a short sale. You do not have to vacate the home until it is sold.

2.     Purchase Agreement

Without a contract on your property from a buyer a short sale cannot happen. Once you have a written offer on your property it can be then sent to the lender(s) for approval. There are several addendum(s) to protect you, which are signed by the buyer; these addendum(s) will be provided for you by your Realtor.

3.     Submit Letter of Authorization

Lenders will not disclose any of your personal account information without written authorization. When you work with a legal Attorney and your Realtor you will need to provide an authorization form to release information, which we will be provided to you. This will give the Realtor and Attorney permission to speak with the lender on your behalf about a short sale.

4.     Hardship Letter

This is a letter written by you stating how you got into this financial situation and why you have not or cannot continue to make your mortgage payments. You are basically making a plea to the lender to take into consideration a short sale. Lenders are not out to get you and can understand if you lost your job, were hospitalized or some unforeseen event(s) led to your current financial situation. This includes the market depreciating. Dishonesty or conducting criminal behavior is illegal and if the truth comes out you may be subject to legal repercussions.

5.     Proof of Income and Assets

It is always best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, cash or other real estate or anything of tangible value. In some cases they may request checking account statements and/or stock and bond statements. Lenders want assurance that you cannot afford the home any longer.

6.     Copies of Bank Statements

If your bank statements reflect unaccountable deposits, large withdrawals or an unusual number of checks written, it's will be a great idea to explain each of those items.

7.     Comparative Market Analysis

If property values are declining and the price you bought your home or condo for is less than what you can sell it for; this becomes a major factor for a short sale. Your real estate agent can submit a comparative market analysis (CMA) to the lender(s). The CMA will show the lender what home values are in your neighborhood and confirm the value is less than what you owe on the mortgage.  

8.      The Final Stretch

Hopefully at this point the lender is seriously considering all the information that has been provided. At this time your real estate agent and attorney if you retain one are doing their best to help the lender understand why the short sale is the best option in this circumstance. If the short sale is approved the closing date of the property should be 30-60 days away from this point.

 If you feel you are upside down on the value of your home to what you paid for it, have experienced a hardship, need more information or want to sell your home please call Kevin for help at (904) 699-1900