Short Sale Information

Current short sale information may change daily, but the techniques are always the same. Short sale techniques include how to prepare your home, your application and paperwork that is required by your lender. These are basically the same with every lender and having all your ducks in a row will help you close your short sale in record time. Short sale information is best obtained from websites not trying to sell you their service or program.

1. What is a Short Sale? A short sale is where the owner of a property seeks to sell the home for less than what is owed. The bank or lender agrees to take a short on the amount owed and allow the seller to walk away owing nothing in most cases. Some states allow the lender to pursue the seller if there are other assets involved, such as a second home. There are however tax consequences for the seller.
2. Who Would Qualify for a Short Sale? The only people who qualify for a short sale are those who are financially strapped. A man cannot apply for a short sale merely because property values have dropped. The person qualifying for a short sale may be one who lost their job, has gone through a divorce or there is a death in the family, thus eliminating usual income received.
3. 2nd Trust Deeds. In most cases, if there is a 2nd, 3rd or 4th on the home, short sales would be difficult to negotiate. Although the government is offering 2nd trust deeds compensation to close, some lenders will still not accept. If the lender is owed $100,000 and the government offers them $3,000 and there is equity in the home, the owner of the 2nd will prefer to see the home foreclose. By allowing the home to go to foreclosure, the 2nd trust deed can purchase the home and sell it for a profit. If there is no profit in the home and the seller is bankrupt with no money at all and no hope, the lender may negotiate. Everything depends on the application and the Realtor.
4. Qualified Realtors or Money Hounds? Needless to say with more and more short sales on the market, Realtors are running to try to make money in a market that has declined considerably. When looking to sell your home make sure to hire a realtor with experience not a money hound hoping to score big in the short sale market. Make sure the realtor you select is one that has “closed” three or more successful short sales. Ask for referrals and proof of the short sale closings also.
5. Paperwork Required. Most all short sales require the same paperwork. They will want to see proof of income, two months of bank statements, hardship letter, application filled out completely, credit reports, comparable property analysis with current homes sold in the last three months in your immediate neighborhood and letter of introduction from the realtor handling the deal. Included in the short sale package would be an accepted offer signed by all parties, escrow instructions signed by both parties, credit reports from the buyers and a pre-approved letter of qualification from the bank doing the loan.
6. Length of Short Sale. The government changed their short sale rules and wanted to shorten the time that it took to approve short sales, but the program had many faults. Short sales are still taking a long time to get approved and the buyer and seller must be prepared to wait. Bank of America has an automatic service provider to handle their short sales called Equator. This central supplier was supposed to be able to meet the government requirements of closing all short sales in ten days, but few ever close on time.  
7. Success of Short Sales. In the end short sales can be closed in a timely manner if the paperwork is prepared ahead of time, the buyer qualifies financially and the Realtor knows her job. Do not attempt to sell your home below market, as no bank will accept a low ball offer. A short sale is a sale at market value.