If your home is worth less than you owe and you need to sell to avoid foreclosure, we can help. We are experienced in working with banks to negotiate an acceptable sales price on your behalf.
To start the process we need the following information requested on the right side of this page to determine the approximate value of your home. This is one of the primary factors your lender will look at when determining how they will work with us during a Short Sale. The following is a general overview of a short sale:
- Unemployment / reduced income
- Medical emergency
- Job transfer out of town
The seller will need to prepare a financial package for submission to their mortgage bank for the approval of short sale. The seller’s short sale package to the bank will most likely consist of:
- Letter of authorization, which lets your agent speak to the bank.
- HUD-1 or preliminary net sheet
- Completed financial statement
- Seller’s hardship letter
- 2 years of tax returns
- 2 years of W-2s
- Recent payroll stubs
- Last 2 months of bank statements
- Comparative market analysis or list of recent comparable sales
Writing the Offer on a Short Sale Property and Submitting it to the Bank
The buyer should look at a Comparable Market Analysis (CMA) prepared by his or her agent to determine a reasonable idea of market value and an offer price.
After the seller accepts the offer, the listing agent will send the following items to the bank:
- Listing agreement
- Executed purchase offer
- Buyer’s pre-approval letter and copy of earnest money check
- Seller’s short sale package
If the package is incomplete, the short sale process will be delayed. In this event, the bank also may reject the offer package altogether.
The Short Sale Process at the Bank
Buyers may wait a very long time to get a response from the bank on their offer. The listing agent needs to regularly contact the bank or listing agent and quickly supply any additional information that is required by the bank. Patience is key and if a buyer threatens to cancel the offer if they don’t get an answer within a specified time period, it will only hinder the short sale process. If you are not able to wait months for a response, then perhaps a short sale is not for you.
The following is a typical short sale scenario with a bank:
- Bank acknowledges receipt of the file. This can take 10 days to a month.
- A negotiator is assigned. This can take 30 to 60 days.
- A Broker Price Opinion (BPO) is ordered. The bank most likely will not share the results of the BPO.
- A second negotiator may be assigned. This can take another 30 days.
- The file is sent for review or to the Pooling Servicer (PSA). This can take 2 weeks to 30 days.
- The bank may then request that all parties sign an Arm’s-Length Affidavit.
- The bank issues a short sale approval letter.
- The closing is scheduled.
Short sales may take 6 to 8 weeks or 90 to 120 days, on average to obtain approval. The listing agent will have the best information on when the file was sent for final review. At that time, buyers should start the loan process so they’re prepared if the bank only gives 2 weeks notice to close.