If you are like many American families who had a reduction in your pay, things can be stressful looking for a way to satisfy the mortgage, car payment, credit card debt and other things. Maybe you had to re-locate due to your job and are having to make double mortgage payments or a rent payment along with your mortgage. This can be a juggling act and many find themselves going into default on their home loan and subject to Foreclosure.
Their are other options to Foreclosure that many may not be know that exist. Their are re-payment plans, Loan Modifications and also the Short Sale. This may be an option if all others fail and is far better that having a Foreclosure on your credit report.
You may ask why would the lender want to do a short sale instead of foreclosing on the property ? The answer is that this could be a savings to the lender. It can take 9 Months for a Foreclosure and Real Sale of the home and by the lender allowing the resale it also is a benefit to the borrower as they do not have a foreclosure on the credit and the do not have there name posted in the local news paper. You must submit a short sale package in order to qualify for a short sale.
When you realize it is time to sale your home in lieu of a foreclosure, you don't want just any Realtor working for you as many have not ever worked a short sale. These are much different from the traditional real estate transaction. You should hire a Realtor who has experience and is successful working short sales. The entire process involves much more than the average closing and will take longer than the normal 30 to 45 days to close. Once you have an accepted contract on your home, it must them go to your lender for their approval process as well.
You may ask, how does this process actually work ? The listing agent and the home owner will negotiate the offers to get the BEST and HIGHEST possible offer. This is very important as the lender will also verify the value of your home to see if this will actually be a savings to the lender versus preceding with a foreclosure. Remember not to add in any fees that are not normally paid and the lender is not going to allow junk fees, home warranties, repairs to be paid at closing.
Now lets say you have a 2nd Mortgage (Junior Lien) This can put a whole new spin on things as we are now negotiating with 2 loan service providers. The junior lean holder does not always want to be as willing to accept less on their loan and often ask for a promissory note to satisfy the debt. They must agree to the short sale as well. If they don't and your home goes into foreclosure, they loose as well. So in this case something is better than nothing. Once the lenders are acceptable to the short sale, they will send you a demand letter that will tell the terms of their approval and this must be submitted to the title company or closing attorney depending on which one is used in your area.
One thing to also keep in mind is that if your lender has already started the foreclosure process, this may continue until you have an acceptable offer on your home. You should always consult with your tax adviser and or attorney about possible tax consequences and legal questions you may have.
Below you will find additional information that will be useful in understanding the process of a short sale.
Please call me at 360.402.8130 if you would like to start this process.
Requirements to do a Short Sale
The Home Owner Qualifies for a Short Sale with a Short Sale Package.
Here are the required items for a Short Sale
1. 2 years Tax Returns (Signed)
2. 2 Most recent pay check stubs with YTD
3. Financial Statement
4. 2 Months Bank statements with bank logo
5. Hardship Letter
* A hardship letter is a pitty letter to the lender. This is just a letter needs to tell you story to the lender. It needs to be more than " I lost my job " It needs to tell how it has affected the family.
* No Tax returns: Blank paper write Tax returns as the top and explain why they don't have a tax return
* No pay stubs: Blank paper write Pay Stubs on to and explain why they don't have any.. like.. They lost their job. If they have Unemployment or Social Security, get a copy of this to turn in.
* No income, Social Security ect. Find out who is making their payment the payment for groceries, utilities ect.
* No banks statements because the took all money out and closed the account because they were trying to stay afloat.
* Other items could be added to the list from your lender
Please call me at 360.402.8130 if you would like to start this process.
Negotiating The Short Sale
Who will Negotiate the Sale ? The listing agent and the home owner will negotiate the offers to get the BEST and HIGHEST possible offer.
Always present ALL offers to the seller and REJECT and or COUNTER Unreasonable offers. Have the Home owner to Accept the Best and Highest offer subject to the lenders approval of a Short Sale.
The lender don't want you to send in all offers for them to negotiate. You will only send then the BEST and HIGHEST offer for Short Sale approval.
Keep in mind that this can take 45-90 days to get the approval. The lender has to weigh the value of a Short Sale ~VS~ Foreclosure. There are many steps to the process. You will need a completed HUD-1 that must reflect the offer being submitted to the lender with the following information:
- Dates
- Fees
- Names
Remember these tips
- Do NOT add any fees that are not normally paid
- Seller may NOT receive any proceeds from the Short Sale
These fees will generally NOT be paid on a Short Sale
- Home warranty
- Repairs - Short Sales are sold "AS-IS"
- Inspection Fees
- Fees normally paid to Buyers including Tax service fees
- Surveys
- Junk Fees
- Utilities
- Buyer Closing Cost over 3% of sales price
Fees they will consider paying
- Property Tax
- Owners Policy
- County Doc. / Transfer Tax (if applicable)
- Escrow Fees
- Commissions - May be reduced
- Junior Lien Holders - these must be negotiated and show amount offered for release of the Junior Lien Holder. (Junior Lien Holder would be like the 2nd Mortgage)
Junior Lien Holders may accept $1,000 - $3,000 (Example) to release the property but not forgive the debt.
* You ask why they may do this.
- Better than getting nothing at all.
- Professional Courtesy
Please call me at 360.402.8130 if you would like to start this process.
If you are like many American families who had a reduction in your pay, things can be stressful looking for a way to satisfy the mortgage, car payment, credit card debt and other things. Maybe you had to re-locate due to your job and are having to make double mortgage payments or a rent payment along with your mortgage. This can be a juggling act and many find themselves going into default on their home loan and subject to Foreclosure.
Their are other options to Foreclosure that many may not be know that exist. Their are re-payment plans, Loan Modifications and also the Short Sale. This may be an option if all others fail and is far better that having a Foreclosure on your credit report.
You may ask why would the lender want to do a short sale instead of foreclosing on the property ? The answer is that this could be a savings to the lender. It can take 9 Months for a Foreclosure and Real Sale of the home and by the lender allowing the resale it also is a benefit to the borrower as they do not have a foreclosure on the credit and the do not have there name posted in the local news paper. You must submit a short sale package in order to qualify for a short sale.
When you realize it is time to sale your home in lieu of a foreclosure, you don't want just any Realtor working for you as many have not ever worked a short sale. These are much different from the traditional real estate transaction. You should hire a Realtor who has experience and is successful working short sales. The entire process involves much more than the average closing and will take longer than the normal 30 to 45 days to close. Once you have an accepted contract on your home, it must them go to your lender for their approval process as well.
You may ask, how does this process actually work ? The listing agent and the home owner will negotiate the offers to get the BEST and HIGHEST possible offer. This is very important as the lender will also verify the value of your home to see if this will actually be a savings to the lender versus preceding with a foreclosure. Remember not to add in any fees that are not normally paid and the lender is not going to allow junk fees, home warranties, repairs to be paid at closing.
Now lets say you have a 2nd Mortgage (Junior Lien) This can put a whole new spin on things as we are now negotiating with 2 loan service providers. The junior lean holder does not always want to be as willing to accept less on their loan and often ask for a promissory note to satisfy the debt. They must agree to the short sale as well. If they don't and your home goes into foreclosure, they loose as well. So in this case something is better than nothing. Once the lenders are acceptable to the short sale, they will send you a demand letter that will tell the terms of their approval and this must be submitted to the title company or closing attorney depending on which one is used in your area.
One thing to also keep in mind is that if your lender has already started the foreclosure process, this may continue until you have an acceptable offer on your home. You should always consult with your tax adviser and or attorney about possible tax consequences and legal questions you may have.
Below you will find additional information that will be useful in understanding the process of a short sale.
Please call me at 360.402.8130 if you would like to start this process.
Requirements to do a Short Sale
The Home Owner Qualifies for a Short Sale with a Short Sale Package.
Here are the required items for a Short Sale
1. 2 years Tax Returns (Signed)
2. 2 Most recent pay check stubs with YTD
3. Financial Statement
4. 2 Months Bank statements with bank logo
5. Hardship Letter
* A hardship letter is a pitty letter to the lender. This is just a letter needs to tell you story to the lender. It needs to be more than " I lost my job " It needs to tell how it has affected the family.
* No Tax returns: Blank paper write Tax returns as the top and explain why they don't have a tax return
* No pay stubs: Blank paper write Pay Stubs on to and explain why they don't have any.. like.. They lost their job. If they have Unemployment or Social Security, get a copy of this to turn in.
* No income, Social Security ect. Find out who is making their payment the payment for groceries, utilities ect.
* No banks statements because the took all money out and closed the account because they were trying to stay afloat.
* Other items could be added to the list from your lender
Please call me at 360.402.8130 if you would like to start this process.
If you are like many American families who had a reduction in your pay, things can be stressful looking for a way to satisfy the mortgage, car payment, credit card debt and other things. Maybe you had to re-locate due to your job and are having to make double mortgage payments or a rent payment along with your mortgage. This can be a juggling act and many find themselves going into default on their home loan and subject to Foreclosure.
Their are other options to Foreclosure that many may not be know that exist. Their are re-payment plans, Loan Modifications and also the Short Sale. This may be an option if all others fail and is far better that having a Foreclosure on your credit report.
You may ask why would the lender want to do a short sale instead of foreclosing on the property ? The answer is that this could be a savings to the lender. It can take 9 Months for a Foreclosure and Real Sale of the home and by the lender allowing the resale it also is a benefit to the borrower as they do not have a foreclosure on the credit and the do not have there name posted in the local news paper. You must submit a short sale package in order to qualify for a short sale.
When you realize it is time to sale your home in lieu of a foreclosure, you don't want just any Realtor working for you as many have not ever worked a short sale. These are much different from the traditional real estate transaction. You should hire a Realtor who has experience and is successful working short sales. The entire process involves much more than the average closing and will take longer than the normal 30 to 45 days to close. Once you have an accepted contract on your home, it must them go to your lender for their approval process as well.
You may ask, how does this process actually work ? The listing agent and the home owner will negotiate the offers to get the BEST and HIGHEST possible offer. This is very important as the lender will also verify the value of your home to see if this will actually be a savings to the lender versus preceding with a foreclosure. Remember not to add in any fees that are not normally paid and the lender is not going to allow junk fees, home warranties, repairs to be paid at closing.
Now lets say you have a 2nd Mortgage (Junior Lien) This can put a whole new spin on things as we are now negotiating with 2 loan service providers. The junior lean holder does not always want to be as willing to accept less on their loan and often ask for a promissory note to satisfy the debt. They must agree to the short sale as well. If they don't and your home goes into foreclosure, they loose as well. So in this case something is better than nothing. Once the lenders are acceptable to the short sale, they will send you a demand letter that will tell the terms of their approval and this must be submitted to the title company or closing attorney depending on which one is used in your area.
One thing to also keep in mind is that if your lender has already started the foreclosure process, this may continue until you have an acceptable offer on your home. You should always consult with your tax adviser and or attorney about possible tax consequences and legal questions you may have.
Below you will find additional information that will be useful in understanding the process of a short sale.
Please call me at 360.402.8130 if you would like to start this process.
If you are like many American families who had a reduction in your pay, things can be stressful looking for a way to satisfy the mortgage, car payment, credit card debt and other things. Maybe you had to re-locate due to your job and are having to make double mortgage payments or a rent payment along with your mortgage. This can be a juggling act and many find themselves going into default on their home loan and subject to Foreclosure.Requirements to do a Short Sale
1. 2 years Tax Returns (Signed)
2. 2 Most recent pay check stubs with YTD
3. Financial Statement
4. 2 Months Bank statements with bank logo
5. Hardship Letter
Please call me at 360.402.8130 if you would like to start this process.
Negotiating The Short Sale
Submitting A Short Sale Offer
Here is a list of what you are going to need when submitting the Short Sale Offer
- Signed Offer - Buyer(s) & Seller(s)
- Estimated HUD-1
- Buyers Qualification Letter
- Short Sale Package
- Signed 3rd Party Authorization
- 2 Years signed tax returns
- 2 Months bank statements
- 2 Most recent pay check stubs
- Financial Statement
- Hardship Letter
For a Short Sale Approval
- You need to demonstrate to the Loan Holder that it makes sense to approve the sale
- You provide the documents needed to justify their decision
- Have pictures and comps
- Make the lender aware of your marketing (your efforts and pricing history)
Why so long for a answer?
- Lender needs to verify the value of the property
- Order the appraisal
- Order Brokers Price Opinion -this could take a couple weeks pending on where this file is in the stack
- Lender needs to get approval - Based on how big the discount would be
Please call me at 360.402.8130 if you would like to start this process.
Why would the lender want to do a short sale instead of foreclosing on the property ?
Here is a example why the Short Sale would be better for the lender.
Short Sale Scenario
$220,000 Actual Loan Amount
$200,000 Actual Market value.
$18,000 Commission and Closing Cost
$182,000 Amount left to Satisfy the lender
($38,000) Amount the Lender would discount the Mortgage
Foreclosure Scenario
$200,000 Actual Market value.
$1,900 Legal Fees
$9,500 Lost Interest
$7,000 Taxes, Insurance, Maintenance & Utilities
$18,000 Commission and Closing Cost
$83,000 Amount left to Satisfy the lender
($27,000) Loss to the Lender
By doing the Short Sale the Lender SAVINGS are $56,400
It can take 9 Months or more for a Foreclosure and Real Sale of the home By the lender allowing the resale it also is a benefit to the borrower as they do not have a foreclosure on the credit and the do not have there name posted in the local news paper.
Please call me at 360.402.8130 if you when you are ready to start this process.
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Wes Neal Investment Sales Specialist, Thurston County
Mobile: 360.402.8130
With Cutting Edge Technology Visit... HouseForSaleWA     |
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