Short Sale Process

When considering a short sale, it is important to keep in mind that the bank has to approve the short sale. Even though your home may be worth less than you currently owe, a bank will only consider a short sale if a homeowner exhibits a financial hardship. You can find out more about what qualifies a person for short sale here or explore your other options here.

 

What is the short sale process?

 

The first step is to list your property for sale and allow us to market the home. Here at RE/MAX House of Real Estate, your home will be syndicated on over 2,500 sites and will be featured on the big ones (Zillow, Realtor, Homes, Trulia). You can read more about our marketing plan here.

How quickly we receive an offer will be determined by current availability on the market, location, correct pricing, as well as a number of other factors. Our years of experience enable us to advise you in selecting the best offer for you and the bank (Remember, the bank will have ultimate approval.). Read on to find out what happens once you are under contract.

 

Short Sale Packet

Once you have accepted an offer, a short sale packet will be prepared to submit to your lender during the attorney review/inspection period. When you list a property with us, we ask you to fill out several documents that will become a part of your short sale packet. During the attorney review period, we ensure that all documents are correctly filled out and financials are current.

  • Pages can get lost, documents go missing, or signatures are left off. The short sale packet is often 100 pages or more and is faxed to your lender(s) to review. Since the packet is so large, it often takes a few weeks for the bank to process. If one page is missing or a signature left blank, the entire document is not processed.
  • By the time a short sale packet makes it on someone’s desk, many documents may be outdated. Due to the length of time it takes to process a short sale packet, many pages may be outdated by the time a negotiator finally reviews everything.

What we do:

We are diligent in our communication with all lenders and request weekly updates so we know exactly where we are in the process. When a lender requests a document, they often require the document to be returned within 24 – 48 hours. You will be notified right away of any documents your lender is requesting.

What you can do:

Make a note of the statement date for bank statements and pay stubs. When a new one becomes available, send it over right away. We find that it helps if the homeowner is proactive throughout the process and joins us in making weekly calls to the lender. Lastly, keep an eye on your inbox for any messages from us and be sure to respond.

 

Bank Evaluation

A negotiator will be assigned to your file and act as the point of contact between your lender and listing agent.

  • Your lender will schedule an appraisal or BPO (mini-appraisal). Although the bank is agreeing to accept less money than what is owed, they expect to receive current market value for the home. An appraisal or BPO is their way of finding out what the property is currently worth.
  • The negotiator may ask for additional bank forms. The process for short sale is constantly changing as new programs become available and old ones fade away.

What we do:

Our years of experience have allowed us to develop a working knowledge of what the process is with each lender. You can view all the lenders we work with here. We have nearly all bank documents on file for each lender so we can send you exactly what your lender requires. Keep in mind, however, that the bank does occasionally update documents and we do too.

What you can do:

Not to sound like a broken record, but stay proactive! Though it can become tedious, the best thing you can do is follow-up with your lender just like we do. Also, be sure to make your home available for the appraisal and keep an eye on incoming emails. The bank typically has a 24 – 48 hour deadline on all documents or they will start the short sale process over.

 

Approval/Closing

You’re on the homestretch! We have finally received short sale approval for your property! There will be a few additional documents to be signed and, depending on your area, a village inspection may need to be done. If the buyer is getting a mortgage, they will complete that process upon receiving short sale approval. The buyer will also perform a final walk-through of the property before closing, at which time the property is expected to be vacant.