The term short sale has become synonymous with any real estate transaction where the lender is agreeing to accept an amount less than is owed.
A short sale is a rather lengthy process in which an agreement is made between the bank and seller for the bank to accept a lesser amount than owed.
The typical steps in the process are as follows:
- The property has to be marketed for sale and must show a concerted effort to sell the property at market Value.
- Our team does price improvements on the 1st and 15th.of every month until we get to the price range where the buyer’s are looking at it more and we get an offer. This also shows the bank that we tried to sell it at a higher price.
- The seller needs to be in a distressed state, most of the time the property is already in the foreclosure process.
- A lengthy package of documents needs to be assembled to prove to the bank that the seller can no longer make payments. This includes all current financial documents, a hardship letter, authorization, current market trends report, recent saks, table of contents, cover letter and purchase agreement.
- Most homeowners don’t know that the bank will pay almost all required fees and commissions to all parties on behalf of the seller.
- In no case may the homeowner walk away with any proceeds from a short sale
Along with these steps, diligent communication and follow-up is a must in order to successfully negotiate, process and close a short sale. The entire process can take anywhere from 3-12 months to complete. You can see why it is important to hire a competent Realtor with a knowledgeable team to expedite this process.
