A short sale is a work out program that allows the homeowner to sell the home for less than the total amount owed. Upon final approval, a short sale can help homeowners avoid further collection activity or foreclosure action.
Documents required to begin
From the Realtor:
Fully executed listing agreement
From the Homeowner:
Signed and dated financial worksheet listing all monthly expenses.
Signed and dated hardship letter (why they are unable to pay the mortgage).
Letter authorizing the Realtor to access the information on the account. It must be dated and include the last 4 digits of the borrower's Social Security Number, their signature, the loan number and the property address.
Additional information
Short sale approval is usually good for 30 days. If closing does not occur within 30 days, the entire short sale package may need to be resubmitted with updated information, or the approval process may need to start over. Realtor or homeowner inquiries should be directed to the negotiator assigned to the file, whose information will be communicated during the introduction call. Realtors are generally allowed 5% to 6% commission based on investor rules. This must be an "arms-length" transaction. The property may not be sold to anyone the seller has a close personal or business relationship with including family, friends or neighbors.
During the introduction call the following will be addressed:
- Commissions
- Fees and costs
- Pricing of the property
- Timeline
It is strongly recommending that the homeowner and/or Realtor notify the bank of their intention to sell their property as soon as the listing contract is signed. This will allow the bank to complete the property valuation and borrower financial evaluation prior to receiving an offer. This significantly reduces the short sale decision time on a submitted offer. In some cases investors and/or PMI companies require the mortgagers to sign an unsecured note for some or all of the difference between the net proceeds from the sale and the total amount due. This is communicated as part of the response on a short sale offer.
A Special Report Prepared By:
Evan Greene
Licensed Broker/Owner
HouseValueExpert@aol.com
www.MyHGrealty.com
Cell: (631) 848-8000