Sellers: Short Sale Expectations
What to Expect in a Short Sale Situation:
1. This is a very complex transaction compared to the traditional real estate transaction. Please do not use a previous experience as a reference point for this transaction. The two are very different.
2. Make sure the transaction starts properly so it will end properly. If the necessary documentation is slow to get in, the process will be slow to begin. Every lender requires similar documentation and the reality is that your transaction will not even be reviewed or begin until the necessary documentation is delivered.
3. We cannot give you an answer on the short sale until the following has been received by us, reviewed, packaged and sent to the lender. Every lender has their own package but most contain:
A. 2 Years tax returns
B. Seller financial statement
C. A letter from the seller in their own hand writing as to why a discount is necessary (hardship letter)
D. Seller signed authorization giving us permission to discuss issues with your lender.
E. HUD 1 (prepared by title company)
F. 2 months bank statements.
G. Last 4 pay stubs
4. Most lenders will not review the documents in number three until an offer for your property has been received.
5. Time frames and what to expect.
Week 1-Initial marketing and packaging. This typically occurs after an offer on your property is received. There's more to it than what one might think. We will be accumulating approximately 100 to 120 pages of documentation to send to the lender and this process is very complicated. (90 % preparation only 10 % negotiation.) To expedite the process we need to do a great job marketing the property and the seller.
Week 2-For the lender to receive our package, lose it once and for us to send a second package.
Week 3 to 5 -For the lender to acquire their necessary documentation to make a decision i.e.; appraisal, preliminary title, escrow net sheets, etc. This process can take the lender as long as 5 weeks and we have had a response within 3 days as well. This process is out of our control. A lot of it depends on the lender's work load at the time of our request.
Week 6 to 10 – Negotiations Begin. Now that the lender has all the necessarydocumentation they will throw their first real response/offer at us. Of course they may give us some crazy requests. Do not panic. There are often 3 to 4 offers going back and forth before we reach an agreement. This is a tiresome process, but we will do the job for you.
5. Please remember: The whole process does not begin until we have an offer in place. Most lenders do not accept short sale packages until we can submit an offer with it.
6. Be patient. This is a long process. We will be in contact with you quite often; however, lenders are very difficult to contact so most of our time will be spent on the phone to them or in the field with buyers to secure offers to fulfill our commitment to you.
7. Do not talk to the lender during this process. They are trained and skilled in negotiations and many times like to use a technique called good cop, bad cop. They will try to cause confusion on our side but it really only confuses issues that will be to their benefit. We may involve you if necessary. We will let you know.
8. The clock is ticking. With a property where the foreclosure process has begun, every day is valuable. We do not want to miss any opportunity so access to your property for potential buyers is crucial. It’s important to try not to get emotional now. You will receive low offers and buyers out to make a deal. We need to look at the whole picture as a business transaction. We may accept multiple offers so that we have backup buyers with loan approval ready to go.
Thank you in advance for your cooperation and patience. We are looking forward to working with you.
Judy Trimble
Certified Short Sales Specialist
208-890-2924
EMAIL
