Thinking Of A Short Sale On Your Home?

The talk about short sales seemed to pick up steam with the foreclosure issue arose in 23 states. More people are considering it today as an alternative to the foreclosure process. But, do you really know what you are doing when you short sale?

First, a short sale by definiton is anything than a short process. Basically you owe more on the existing home than you can sell the home for in the current market. In lieu of going through the foreclosure process you and the mortgage holder agree to accept a lesser amount of what is owed on your home.

But, are you aware of the the papewrwork and documents you need to provide to begin a short sale? A mortgage company will not even begin to accept ro entertain a short sale without a full financial disclsoure on your part. That includes paystubs, bank statements and retirement plans. Then you need to have a hardship that warrants you selling the home now. Acceptable hardships are loss of income, medical issues, job transfers just to name a few. They will not accept you on a short sale if you just do not want the house anymore becuase you owe signifcantly more than it is worth and can afford to pay each month.

The mortgage company then will begin the process of a short sale and order a BPO (Broker price opinion) on your home. This is an independent value of your home from a Realtor in the area. The mortgage company will use that value to determine a fair market value for your home in this market.

Then it is up to your Realtor, who you have contracted with to market and list your home to attract a buyer to your home. They are left with the burden of marketing a home without knowing what the mortgage comany will accept as a final dollar amount. This can be a delicate situation. In this process, chances are you are behind in the mortgage and the foreclosure process is still going forward. So, time becomes an issue. They have to price the home right from the first day.

You need to make sure your home is readily availble for showings and is in show conditon just about all the time. You do not want to take the chance of losing the one buyer for your home because you made it unavailbale for them to show.

Once a buyer has placed an offer on yoru home the mortgage company will begin the long process of verifying all the documents and negotiating the offer. You probably will have to update bank statements and records as the process moves forward and closer to a potential sale.

This process varies depending on the lender and the Realtor you are using. I have negotiated some short sales in the matters of days and weeks. I have represented buyers on a short sale that has taken weeks to months and soem we never were able to reach an agreeable terms on.... Each mortgage comany is different and each Realtor is different on how they handle them.

If you are thinking of a short sale make sure you are fully aware of what is expected from you in the process upfront...Make sure your Realtor si fully aware of the process and dealing with that particular mortgage company. The loss of a home is difficult enough without the added strain the process can bring upon you if you are not aware upfront what to expect.

Dave diCecco
Realtor/Broker
www.davedicecco.com