Short Sale Process » foreclosure http://short-sale-process.com Real Estate Short Sale Process Wed, 11 Nov 2009 05:07:56 +0000 en hourly 1 http://wordpress.org/?v=abc Going Through the Short Sale Process http://short-sale-process.com/going-through-the-short-sale-process/ http://short-sale-process.com/going-through-the-short-sale-process/#comments Wed, 29 Apr 2009 23:45:15 +0000 admin http://short-sale-process.com/?p=63 Homeowners are defaulting on their mortgages at a record pass during the past couple years and many are requesting from their bank or lender for some type of assistance to prevent going into foreclosure. Many borrowers are taking the route of selling their home via a “short sale”, which is an alternative worth considering to resolve mortgage debt with the lender on a property that is no longer affordable to you.

Before starting the short sale process, make sure to look over the basics:

What is a short sale?

A short sale is when a borrower finds that their property is now worth less than what is owed on the mortgage. When approved, the lender or bank will move forward with the short sale by accepting less than what is due on the mortgage(s).

Why is it an option?

Foreclosures carry a hefty price tag for banks and lenders to process. Including documents, attorney and many other fees, most of the time a short sale is a cheaper option for the bank to settle the issue. Banks can face fees upwards of $50,000 to $60,000 when foreclosing on a property.

How does the short sale process work?

Many lenders have a short sale package that must be filled out and completed in order for the short sale to be approved. Additional documents could include:

  • Hardship Letter – Explaining why the short sale is necessary
  • Seller’s financial statement
  • Two recent pay stubs
  • Two recent bank statement
  • Two most recent tax returns
  • Copy of an Agreement of sale with buyer
  • Copy of proposed settlement statement (HUD-1)

    • Once the short sale package has been delivered to the bank or lender, a negotiator is assigned to your file and will be your contact going forward.

    Points to Remember:

    -Don’t expect to close immediately after finding a buyer. It make 60 days or longer to close or get a response from the lender.
    -Lenders are overwhelmed with short sale requests and may not have the staff to help you quickly. Be persistent so that you are not forgotten!
    -Consult with an attorney and real estate agent on the short sale process. They will be able to help your specific needs.

    ]]>     http://short-sale-process.com/going-through-the-short-sale-process/feed/ 0     Pros and Cons of a Short Sale http://short-sale-process.com/pros-and-cons-of-a-short-sale/ http://short-sale-process.com/pros-and-cons-of-a-short-sale/#comments Tue, 07 Apr 2009 01:37:15 +0000 admin http://short-sale-process.com/?p=39 There are many pros and cons to a short sale that many buyers and sellers need to understand properly the time line in itself.

    The Pros:

  • The Seller and Lender can avoid foreclosure on the property
  • The Buyer can possibly buy the property below market value and have a chance at getting a good deal.
  • The condition of the home is better than a foreclosure/bank owned property
  • Property hasn’t suffered vandalism due to the homeowner still occupying the property

    • The Cons:

  • The bank may not approve the short sale while taking their time to turn down the offer. It may be over a month when a response is heard and it’s not good.
  • A bank can usually take 1-2 months to answer the buyer’s offer.
  • A bank may bump one buyer out for a better offer
  • The property is sold “as-is” with no repairs included.
  • The Seller may end up owing federal income taxes on the short sale due to the amount forgiven by the lender
  • Make sure the seller has experience with short sales. The complexities of this type of real estate transaction can screw things up for the seller.
  • Buyers should keep looking at properties since they don’t know if the one they made an offer on, will be approved by the bank.
  • The property must be in actual default for the lender to approve a short sale. Make sure the seller has gone into default.
    • ]]>     http://short-sale-process.com/pros-and-cons-of-a-short-sale/feed/ 0