A Step By Step Guide to Selling Your Home by Short Sale!
People often ask what the steps are for selling a home as a short sale. In response, we created this step by step guide to selling your home by short sale. Naturally, we can not include every step and variable so we’ve gone over the basics for you. We hope this is helpful.
STEP ONE: Seek Legal Advice First
Prior to listing your home for sale by short sale, a consultation with an attorney who specializes in foreclosures, short sales and loan modifications is necessary. Your attorney will review your current financial situation and offer advice and options on how to proceed. We do not consider this an option. Some attorneys offer different service options including handling all conversations and negotiations with you lender. This approach has many advantages, both personal and legal, and we encourage this course of action.
STEP TWO: Put Together Your Short Sale Application/Package
If you decide you want to move forward with a short sale, an application to your lender is the next step. We encourage people to work with their attorney on this step. However, you can and may want to do this on your own. Each bank has different requirements for their application. Your professional negotiator has information about this and can help you. If you are doing this on our own, we have many of the lender requirements on file and will gladly get you that information. Note: Due to privacy concerns, we recommend you only share private information such as social security numbers, bank account numbers and such, with your attorney, tax advisor and lender. Review and submit your short sale application/package to the appropriate person at your lender’s company.
STEP THREE: List Your Home For Sale
This is where our extensive skills and knowledge comes into place. Some agents list the home first and have you do steps 1 & 2 after the home is listed. We feel in is important to start getting your ducks in a row first.
Below are the basics of what we'll be doing in Step three:
•We will come to your home and gather information needed to help determine your home’s value.
•We will give suggestions on how best to stage your home to attract a home buyer.
•We answer any real estate questions you have at that time and go through the sales process. When you are ready to put the home on the market, usually a few days after our initial appointment, we will meet and review the information we’ve gathered on your home’s value. Together we will determine the asking price. We will take pictures of your home and finalize the listing paperwork. Over the next few days we will create all the marketing materials we use to sell your home. Once completed, your home will go on the market.
STEP FOUR: Communicating With Your Lender
This is an on-going process from beginning to end. The purpose of the communication changes over time. If you are using a law firm to handle your communications, they will make the calls and update you on any progress, needs or changes. Communicating directly with your lender is fine as well if you have talked with an attorney and understand your rights and how to protect yourself. We suggest you make verbal contact once per week unless directed otherwise by your lender or attorney. Expect to spend an hour to achieve this and know in advance the exact questions you would like answered. We can help you determine this prior to each call.
STEP FOUR: Accepting and Submitting An Offer To Your Lender
We will review and negotiate purchase offers that come to the table. Our goal is to find an offer that has the best shot at being accepted by your lender. We may want to negotiate with the Buyer to make the offer more viable. In addition, we will perform due-diligence on the Buyer to make sure they are qualified to buy your home and willing to wait for the bank to respond to their offer. The ultimate decision to accept an offer is yours and we will be there to offer our thoughts, advise and concerns. Our goal is to find the best offer possible to submit to your lender and get agreement from the buyer to stay in the game for the time it takes the lender to respond. Since this can be 60-90 days or longer, it is an important step.
STEP FIVE: Lender Accepts Your Application & Buyer’s Offer
Let’s say the lender says your application has been accepted and they also approve the purchase offer we submitted. Please understand that the time frame to this step varies by lender and 2-3 months is not uncommon. That said, two distinct things will now happen: Lender and mortgage holder (you) begin negotiating the settlement of the mortgage agreement. The lender may ask you to contribute cash to make the sale happen. They may ask you to sign a promissory note. There are a variety of options in this negotiation. Once again, we STRONGLY advise you consult with a qualified attorney before agreeing to and signing any documents. We are very serious about this!! The second item is the transaction between you and the person who made the offer on your home. We will be handling this part of the job and update you each step of the way. There are too many steps to cover here, however, we will keep you posted and knowledgeable.
A FEW ITEMS OF NOTE: Sometimes a buyer will walk away from the deal before the lender has given the nod to move forward. In this case, it is very important we try to find a new offer ASAP. We will be in contact with the Buyer’s agent on a weekly basis and advise you of any changes. Negotiations between a borrower and his/her lender have legal and personal ramifications. We require our clients to consult with an attorney prior to entering into a short sale agreement and before signing final lender documents. We are not saying this to be difficult, we say this because your safety and legal rights are too important to compromise.
