Steps in a short sale!
Short sales have become quite commonplace these days, especially here in Santa Clarita where short sale homes for sale equate to almost half of all active listings!
There are several steps to successfully completing a short pay sale, more commonly known as a SHORT SALE. That’s why it’s important to have a knowledgeable Realtor on your side. It takes an incredible amount of time, effort, and expertise to negotiate with the lender/s and get the job done. Here is a BRIEF overview of the steps to successfully sell your home as a Short Sale.
- Find a Buyer-without a buyer there is no short sale. Therefore in order to find a buyer you need to list your home with an experienced Realtor. You will want to price your home near market value to attract a number of buyers in a short amount of time that are motivated to make an offer to buy your home. Remember, time is working against you and your goal is to be relieved of the debt..
- A complete short sale package, which includes the highest and best offer/s is submitted to the lender/s.- Once a buyer is found and the contract is executed, its time to submit the “Short Sale Package” to the lender/s. An experienced Realtor will know what items are required to be included in the package and can provide you with a list. Right now, just understand that until a buyer is found, there isn’t much to do. However, it is important to gather all the necessary documentation ahead of time that will be required for the lender to consider approving a short sale.
- Your current lender will order an appraisal or a Broker’s Price Opinion (BPO).- Once the lender has received the “Short Sale Package” the lender will order a BPO from a local real estate agent. Once the BPO is completed it will be submitted to the lender. It will mostly likely be a Drive-By BPO unless the condition of the property warrants an interior inspection. The purpose of the BPO is to determine the property’s current fair market value. This will be a pivotal point for the lender’s negotiation.
- The lender either approves, rejects or counter’s the buyer’s offer. A HUD or Net sheet would have been provided when your agent submitted the short sale package which will allow the bank to see how much money they will net from the sale. Sometimes the bank will request a new HUD/Net sheet be done. Just remember that the lender has the final say and must approve the sale.
- Once the lender Approves the Short Sale you are half way there.- If the lender approves the sale they will issue a letter of approval which will determine the terms of the short sale transaction. It is important that your Realtor ensures that the buyer complies with the terms and timelines the lender issues in their approval. Your agent also needs to be sure the buyer has remained interested in this home with this long process.
An experienced short sale Realtor, would recommend that you start the process as early as possible. The entire short sale process can take between 2-9 months from beginning to end. The sale is never final until the buyer’s loan has recorded.