San Diego, CA -- (SBWIRE) -- 07/05/2012 -- In light of a turbulent real estate market with many unanswered questions, Short Sale San Diego is pleased to release a step by step guide on The Complete Short Sale Process from Start to Finish.
What happens in the Short Sale Process from the listing of your property to the Short Sale Approval to closing escrow.
The short sale process is still a bit confusing to the public and some real estate professionals even after it has become the most popular alternative to Foreclosure. Homeowner’s are not the only ones that are puzzled by the ever changing short sale process. In many cases it is the buyers agent or even the short sale listing agent that does not know how a short sale works.
The basics of what a short sale is:
There are 2 main reasons that a bank would allow a homeowner to short sale; the homeowner has a hardship, and the homeowner owes more on the mortgage than what the home is worth.
Just a few examples of what a valid hardship is:
Unemployment or reduced income
Job transfer out of town
During the short sale process a seller will need to prepare a financial package to submit to the short sale bank. Although each bank/lender has their own specific guidelines, the procedure with most are very similar. With several of the major lenders such as Wells Fargo, Bank of America and Chase, the short sale package can be submitted online through a system called Equator.
The most common items included in the short sale package are:
Letter of authorization; This allows the short sale Realtor or short sale negotiator speak to the bank about your short sale.
HUD-1 or preliminary net sheet
Short Sale Hardship letter
2 years of tax returns
2 years of W-2s
Recent paycheck stubs
Last 2 months of bank statements
Market analysis of your property
Don’t worry if you don’t know what half of these items are. If you are connected with a good short sale agent or short sale Realtor they will guide you through the whole process and make sure that your short sale package is complete.
Accepting the best Short Sale Offer and Submitting to the Bank
If you are on the buying a short sale you should make sure that you are working with a competent agent that will be able to negotiate the short sale offer and make sure that you are getting a good deal. Although the banks are not in the business of giving away homes at ridiculously low prices, there are some great deals to be found when buying a short sale.
Once an offer is made on a short sale home and the seller decides to accept the offer, everything is then submitted to the short sale bank.
Here are some of the items that are sent over with the short sale offer:
Short Sale Purchase Agreement
Buyers loan approval and deposit
Seller's short sale package
It is important to note that if the package is incomplete in any way the short sale process can be delayed.
The Short Sale Process once the file is submitted to the bank
Once a short sale offer is submitted to the bank it may be a lengthy process until the shortsale is approved. It is very important to have an agent that specializes in shortsales since constant communication with the short sale bank is imperative. In many instances buyers will get tired of waiting for the short sale approval and will back out of the deal. It is for this reason that a short sale buyer is made well aware of the time it takes to get a short sale approved.
Here is the typical timeline for the short sale process once it is at the bank:
Bank acknowledges receipt of the file – 10 to 30 days
A short sale negotiator is assigned - 10 to 60 days
An appraisal or BPO is ordered and completed
The file is reviewed by the negotiator
The bank issues a short sale approval letter or make a counter offer
In general it is impossible to say how long a short sale will take. Some short sales get approval in 6 to 8 weeks and others take 90 to 120 days. Short sale lenders are not always the easiest to deal with so it is important to hire a professional real estate consultant to help you shortsale.
At Short Sale San Diego we like to summarize the entire process as such.
PS: Here is the basic timeline and process for the short sale:
1. Sign the listing agreement so we can advertise your property on the San Diego MLS and on http://www.shortsalesandiego.com.
2. Obtain an offer on your property.
3. Accept an offer on your short sale.
4. Submit the Purchase Offer along with the Short Sale Package to our Short Sale Negotiator
5. Our Short Sale Negotiator submits the file to your lender(s)
6. We will get a short sale approval or counter offer on our purchase offer.
7. We open escrow and complete all the final disclosures and escrow paperwork.
8. If needed the buyer will finalize their loan.
9. We close escrow and the short sale is completed.
That is basically the whole process in a nutshell.
About Short Sale San Diego
Short Sale San Diego is a Real Estate Short Sale Company that is well known as the San Diego Short Sale Experts. We are a Short Sale Company, Short Sale Listing Agents and Short Sale Realtor and Short Sale Negotiators.