Here is a look at the short sale process.
1. Initial conversation.
I will need to determine the current value of your property, find out who the lenders are, what the balance owed is, and how far behind the payments are. From this we will know how to best proceed with a Short Sale.
2. List the property for sale.
We’ll need to find a qualified buyer in order to submit a short sale request to your lender. The process of finding a buyer can take anywhere from few days to a few months. I will give you regular updates, as often as you want.
3. Gather supporting financial documentation.
While we wait for a buyer to make an offer, you will gather some financial information to send to the bank.
▪ Third Party Authorization – this give the bank permission to speak with your Realtor® directly.
▪ Hardship Letter – You will explain to the bank the reasons that lead you to not be able to make the house payments. We have a form for you to use as a guide.
▪ Financial Worksheet – You fill out a form that shows your average monthly income and expenses to demonstrate that you can no longer afford to make the payments.
▪ Other financial info – You provide copies of pay stubs, bank statements and tax returns to support the info you put on the Financial Worksheet. If those items sound familiar, they are the same things you provided to get the loan approved. We are essentially un-approving you for this home loan.
4. Receive an offer.
A buyer makes an offer that we review to make sure that it looks reasonable and has a good chance of being accepted. We then send that contract with all the financial information we gathered in the previous step to the bank for consideration.
5. Confirm the offer is received and processed by the bank.
As soon as the bank has received the offer and all of the supporting financial documents we will be notified that the file is complete and ready for review. The process of faxing and verifying receipt of the file can take anywhere form 2 days to as long as 2 weeks.
6. The bank reviews the file and orders a BPO.
Once the offer is in review, the bank will order a BPO or Broker’s Price Opinion. This is when the bank sends another Realtor® or appraiser to give an impartial opinion of the value of the property.
7. Final review.
After the BPO returns the value for the bank. It then has to be reviewed by a negotiator, who sometimes has to get the final approval from another department or even an outside investor if the servicer does not own the note. You can expect to wait several more weeks to even months for the file to complete its final review.
8. The bank will either accept, reject or counter the offer made by the buyers.
If rejected we will ask for feedback on how we can submit an offer that might be accepted. If the offer is countered, the buyer will decide if they want to increase their purchase price, or we may have to put the home back on the market to find another buyer.
9. Contract acceptance and closing.
Once the bank and the buyer agree to the terms of the contract, we schedule closing. It will usually be around 30 days after the final approval.
The entire Short Sale process can take anywhere from a couple months to much longer. My shortest short sale was about 3 weeks. My longest was 15 months. I would say that 2-5 months is a fairly realistic average, but we get constant feedback throughout the process, so at any given time we will know where we stand in the process.
If you are ready to get started on your short sale, please contact us today.