How A Short Sale Works for You
If you find yourself in any one of the following situations, you should give serious consideration to a short sale solution to your mounting problems:
- You may not be behind on your mortgage yet but you know that your interest rate and monthly payments have been increasing.
- Maybe you can see that what your home was once worth is now lower than the amount you owe on your mortgage and you’re wondering if it makes sense to keep throwing good money after bad.
- Perhaps you are so far behind that your lender is threatening you with foreclosure, or has actually started proceedings.
The sooner you seek a solution that protects you from foreclosure, the better your chances are to walk away with financial peace of mind and the chance to rebuild your financial future, clear of the lifelong stigma of a foreclosure. You see:
- A foreclosure is a permanent black mark on your credit that prevents you from obtaining financing for 7 to 10 years, and will always be an issue when you apply for any kind of credit.
- A foreclosure is a very public affair and your neighbors and friends will almost certainly become aware of the embarrassing proceedings as well as your loss of your residence.
- A foreclosure opens you to other attempts by the lender to attack any other assets you may have in pursuit of all funds owed them.
- A short sale may affect your credit for approximately 24 months, at which point you may be able to obtain a loan to purchase another home.
- Properly approached, your lender may agree to accept the proceeds of the short sale as payment in full, allowing you to feel real peace as you restart your life.
A Short Sale Is Only Successful If You Do Everything Right.
There is a proven process that you should follow in proposing a short sale solution to your lender, finding a buyer for your home, and ultimately closing a sale to everyone’s satisfaction. It takes patience, time and the guiding hand of a professional schooled and experienced in navigating the treacherous short sale marketplace.
Stage One: Hire A Qualified Short Sale Specialist
An ordinary Realtor is not going to have the skills or experience to manage your short sale successfully. What you really need is a CDPE — that’s a Certified Distressed Property Expert. Professionals with this designation have trained extensively to understand the options, solutions, and effective methods for dealing with homeowners facing hardships. Your CDPE Realtor will start by helping you prepare for marketing the property and also for establishing the grounds for your short sale as well as evaluating any other legal or financial impediments. Vital activities include:
- Developing the short sale pricing strategy for maximum competitive impact
- Work with you to prepare the documentation necessary to petition your lender for agreement to proceed with a short sale
- Searching the title for liens, fines and other clouds that could affect the transfer of the property
Stage Two: Marketing The Property
Exercising with the urgency your situation requires, the property should be placed in the MLS — the Multiple Listing Service — to attract the attention of prospects. It should also be advertised in online media, just as an ordinary listing would be presented.
Stage Three: Accepting An Offer
After receiving an offer on the property, your agent will thoroughly review it to determine the likelihood of the bank accepting the offer. The lender will make the decision and it is not a slam-dunk. It may take at least 45 days, or more to receive a response. During that time, the property may receive backup offers.
Stage Four: Submitting the Short Sale To The Lender
Your CDPE will proceed with the submission providing the following documentation to the lender:
- Bank statements
- Buyers mortgage pre-approval letter
- Executed contract
- Financial worksheet
- Hardship letter from you
- The listing agreement
- The listing history
- Payroll stubs
- Preliminary HUD closing statement
- Tax returns
After submitting the proposal, the lender will order a Brokers Price Opinion or BPO -- a kind of informal appraisal to establish market value
Stage Five: Negotiation and Closing
The lender may choose to accept the offer as submitted and the mortgage may be reported as “Paid as agreed” — you’re free and clear. In other cases, the bank may make a counteroffer in which case there will be negotiation with the buyer and lender. Once they agree to a final price, closing is at hand.
The Mark Boyland Team - We have successfully closed short sales in Westchester, Putnam, Dutchess and Bronx counties.
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DISCLOSURE: The brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.