Real Estate Short Sale
Short Sale Information
And What You Need To Know
It's Your Home For Sale!
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Not All Real Estate Agents Are Qualified Short Sale Experts! |
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You May Only Get One Chance To Hire A "Qualified" Real Estate Short Sale Agent To Sell Your Home In This Time Sensitive Market Don't Risk Everything By Not Hiring The Right Real Estate Agent! |
10 Questions A Seller Must Ask A Realtor BEFORE Signing A Short Sale Contract
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You've decided that you need to sell your home and are trying to determine what is your best option as the seller. You have probably met with several Realtors, one may actually be a friend and have asked them a few questions to try and determine what realtor has the best training and knowledge for your current situation.
There are several questions that you must know to ask prospective Realtors to make sure that the realtor you select has the knowledge and experience necessary to make the transaction of selling your home successful.
Unfortunately, most home sellers do know the rith questions to ask a prospective agent to determine if the agent specializes in selling "Short Sale" properties.
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To Begin, You Will Need An Agent Who:
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1. Can my real estate agent explain the short sale process to me? |
Answer: A qualified short sale real estate agent can clearly and logically help evaluate your situation and explain, in detail, the short sale process and determine an effective strategy. |
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2. How do I know if my property will "qualify" for a short sale? |
Answer: There are specific guidelines made by the lender to determine if your situation qualifies you for a short sale. Your real estate agent must know and understand these qualifications so that your situation & property can be accurately evaluated for a short sale. |
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3. Does my real estate agent know what information I need to provide to the lending institution? |
Answer: A qualified short sale real estate agent will be able to ask the "right questions" and provide you with accurate and up-to-date paperwork to begin the process of creating a short sale package that will be accepted, for review, by the lender. Missing information will delay this process significantly. |
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4. What does the lender accept as a "qualifying hardship?" |
Answer: There are specific categories that lenders consider "qualifying hardships." A short sale real estate specialist will be able to review your situation and inform you of the types of hardships that most lenders consider "acceptable" so that you can go forward with the short sale process. |
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5. Does my real estate agent know how to create an accurate short sale strategy? |
Answer: A short sale can only take place if both you and your property qualify. With the support of a qualified team of professionals, your agent will make sure you, the seller, have all the elements necessary to implement the short sale process. |
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6. Does my real estate agent have prior experience in working with short sales and lending institutions? |
Answer: This type of transaction has become a "real estate niche." A short sale real estate agent has specialized knowledge and understands the systems and models required to be successful. You will want to make sure that the agent you select has previous experience and expertise. |
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7. Does my real estate agent know how to market my home since this is a time sensitive transaction? |
Answer: Most Realtors have similar tools for selling your home which include the MLS (Multiple Listing Service), company tours and caravans, open houses, property flyer's and brochures. Again, because timing is so crucial, you will want your agent to know about advanced technological services and how to apply them to the selling of your home. |
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8. Does your real estate agent know not to price your home? |
Answer: Ask about the current market and how the market is affecting home sale prices in your area. A short sale agent will be able to back up their assertions with solid proof by obtaining a comparative market analysis which includes three items: · the listing and selling prices of homes in your area, · a description of comparable homes, · the length of time the homes have been on the market. This gathered information will give you confidence that your home's proposed market value is set at an accurate pricing range to get your home sold quickly. |
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9. Does your real estate agent have a pricing/marketing campaign for 14/30/45 days? |
Answer: If your home isn't seeing much interest by prospective buyers after 14 days, your agent should be able to provide you with a list of things being done on a regular basis to generate activity. Your agent should be having regular communication with you on the status of your property vs. you having to continually request updates and make suggestions as to how to sell your home. You must have a proactive real estate agent with professionalism and expertise in the short sale market. |
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10. How do I know if I am really confident with the real estate agent I am selecting? |
Answer: this is a great question to ask! We have all had times where we went along with a decision because of pressure. Ask yourself if you trust this agent and more importantly, do you feel confident in the way this agent conducts business? Ask for references so that you can be educated with the sgent's skill level and expertise in selling your home as a short sale. You are dealing with a very emotional issue...selling your home. Your need to maker sure you are making good business decisions during this trying time. |
QUALIFYING HARDSHIPS & SUBSTANTIATING DOCUMENTS
UNEMPLOYMENT -
Letter from previous employer indicating you are no longer employed.
REDUCED INCOME-
Letter verifying terms of reduced income -less hours/less pay.
DIVORCE-
Divorce documents that verify there is an order to sell the property.
SEPARATION -
If a Legal Separation - documents verifying agreement and necessity to sell the property.
DEATH OF SPOUSE OR FAMILY MEMBER-
If decedent is on the loan - provide a copy of the death certificate.
PAYMENT INCREASE -
Copy of note showing an increase - a letter from lender explaining the increase in payments.
BUSINESS FAILURE -
Letter from Tax Accountant explaining the current financial status of your business.
JOB RELOCATION-
Letter from employer showing the terms of your relocation.
ILLNESS -
Doctor's letter showing time-off from work or if it' s disability, a copy of disability checks.
MEDICAL BILLS -
Copy of Bills or paid checks for medical expenses.
DAMAGE TO PROPERTY -
Bids/Bills for any repairs and an explanation of the damage.
MILITARY SERVICE-
Copy of service paperwork to show length of your commitment.
PLEASE NOTE: THESE ARE ONLY GUIDELINES FOR DOCUMENTATION - THERE COULD BE MULTIPLE HARDSHIPS AND DIFFERENT DOCUMENTS USED FOR SUBSTANTIATION
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Foreclosure Calendar Of Events |
Description |
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After approximately 90 days without borrower making a mortgage payment |
Request to initiate foreclosure received by TD. Default documents prepared and sent for signature/recording (Substitution/Notice of Default). TSG ordered from title company. |
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Start (Day 1) |
Notice of Default recorded with County Recorder |
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Within 10 Business Days |
Notice of Default and Important Notice are mailed to Trustor/new owner on the Deed of Trust ant the property address, address on Deed of Trust and any other addresses known to lender/trustee. Notice is also sent to any parties with a recorded Request for Notice as required under Section 2924 (b) (1). |
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Within 1 month |
TSG is received and reviewed. Notice of Default mailed to all entitled parties with an interest in the property (ie new owners/junior lien holders) as required under Section 2924 (b) (1) |
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3 months after recordation of Notice of Default |
Notice of Trustee’s Sale is prepared and sent for publication |
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25 days prior to Sale Date |
Send Notice of Sale to IRS (if applicable) |
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20 days prior to Sale Date |
Begin publishing "Notice Of Sale" in an adjudicated newspaper. (ad must run once a week for 3 consecutive weeks) |
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20 days prior to Sale Date |
Post the Notice of Sale on the property itself. Most posting services will photograph the posting location for your records. |
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20 days prior to Sale Date |
Mail Notice of Sale on the property itself. Most posting services will photograph the posting location for your records. |
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14 days prior to Sale Date |
The Notice of Trustee’s Sale is recorded in the County Recorder’s office. |
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5 days prior to Sale Date |
The borrower’s right to reinstate expires. |
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On Sale Date |
The property sale is postponed to a new sale date or the property is sold to the high bidder, or the property reverts to the foreclosing beneficiary |
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Disclaimer: Presentation of these timelines is for general purposes only. No information on this page is to be viewed as legal advice or as an official description of the judicial or nonjudicial process. These times are general and are displayed strictly as a service to consumers. They are not intended to be all-inclusive or to cover default situations in all states. Consumers are advised to seek professional legal counsel in any default proceeding. Always seek legal and professional advice! |
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WRITING YOUR HARDSHIP LETTER
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The first step is to clarify your hardship. This should be very clear and compelling so the lender can understand why your payments have gone delinquent. It is also important that this information have documents to substantiate your hardship.
What is your current situation and be specific as to how is happened?
Sample Cover Letter for the Short Sale Package to the Lender
Date:
To: (mortgage company) (Address)
RE: (property address) Loan Number: ()
Dear
Enclosed, please find the following documents regarding the above property for your consideration of a short-pay:
1. 2 year tax returns with W -2 forms
2. Hardship letter
3. Year-to-date earning statements
4. Bank statements
5. Financial statement
6. Loan information and release authorization
7. Accepted offer - subject to your approval
8. Approval of buyer
9. Broker's Price Opinion (BPO)
10. Net sheet
11. Preliminary title report for the property
Our market is very distressed; therefore, I cannot stress the importance of obtaining approval quickly. We have found when it takes too long, the potential buyers become less motivated and go to other properties in the area that are not so overly encumbered. The buyer is motivated to buy quicldy so that they have peace of mind, knowing they have purchased a home.
If we can get additional information for you, please give us a call. Thank you for your immediate attention to this urgent matter.
Sincerely,
You will need help to gather all this information, so make sure you hire the right agent the first time...not when it's too late!
Monthly Financial Statement
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Mortgage |
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$ |
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Section 1: |
2nd Mortgage |
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$ |
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Housing |
Property Taxes |
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$ |
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Expenses |
Homeowner's Insurance |
$ |
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Utilities (phone/water/gas/electric) |
$ |
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Association dues |
$ |
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Subtotal for housing section |
$ |
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Food |
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$ |
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Section 2: |
Clothing (include laundry/cleaning) |
$ |
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Living |
Transportation (gas, maintenance) |
$ |
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Expenses |
Insurance (auto, life, medical) |
$ |
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Daycare |
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$ |
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Medical expenses |
$ |
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Subtotal for living expenses section |
$ |
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. |
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Car Loan #1 |
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$ |
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Section 3: |
Car Loan #2 |
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$ |
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Monthly |
Child support/alimony |
$ |
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Installment |
Credit Card |
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$ |
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Debt |
Credit Card |
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$ |
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Credit Card |
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$ |
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Other: |
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$ |
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Subtotal for monthly installment debt |
$ |
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TOTAL |
Monthly expenses from sections 1,2,3 |
$ |
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(a) |
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Wage Earner #1 (take home pay) |
$ |
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Monthly |
Wage Earner #2 (take home pay) |
$ |
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Income |
Wage Earner #3 (take home pay) |
$ |
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Other: |
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$ |
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TOTAL |
Monthly Income |
$ |
- |
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.• |
- |
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(b) |
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Monthly Income Total (line b) |
$ |
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What's |
Monthly Expenses Total (line a) |
$ |
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Left? |
Monthly Cash Flow ( subtract line a |
$ |
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from line b) == |
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Selecting the right SHORT SALE AGENT ...
I firmly believe that selecting the right agent is often the single most important element in a successful home sale. Uneasiness and/or discomfort in the agent/seller relationship leads to unhappiness on both sides and usually results in a poor outcome. A Short Sale Transaction is a time sensitive sale and because of this added pressure, you will need to be comfortable in discussing expectations, thoughts and concerns regarding all aspects of the sale of your home.
I hope this report has given you a better understanding of just how important it is to choose the right Realtor® for a successful home sale. Asking these questions, before you sign with an agent, will help you to determine if the agent you want to sell your home specializes in Short Sales and is also qualified to process your short sale.
Please feel free to call me if you would like further explanation of any of these topics, or if you have any other real estate questions. As a Realtor, my mission is to constantly strive to be as helpful as I possibly can to homeowners. I hope this information provides the answers you need to be an informed home seller.
Thank you
Rita G. Anderson
Anderson Home Pros Real Estate
805-698-3771
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