Your Lake Arrowhead Realtor would like to share some short sale & foreclosure information:
You want to AVOID FORECLOSURE at all cost and a Short Sale may be your best solution.
A Short Sale is when a homeowner is 'short' on the amount owed on his/her property and it is higher than current market value. A Short can occur when a negotiation is entered into with your mortgage company (or companies) to accept less for the home than the full balance at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.
How do you know if you qualify for a Short Sale?
- Financial Hardship- You're experiencing a situation that has caused you to have trouble affording your mortgage.
- Monthly Income Shortfall - "You have more month than money." Your lender will want to see that you cannot afford, or soon will not be able to afford, your mortgage.
- Insolvency - Your lender will want to see that you do not have significant liquid assets ($$$)that allow you to pay down your mortgage.
This may sound simple enough, but in fact it is a complicated process that takes an experienced professional (Realtor who is trained in Short Sales) to help make the process move along in a more timely manner.
On that note, when I take your Short Sale listing, this is what I'll need from you once we get an accepted offer on your home (have these documents ready):
- Hardship letter (written by you explaining why you can no longer afford your mortgage).
- Signed Authorization letter allowing your Realtor (Me) and escrow officer to receive and convey information to your mortgage company/ies on your behalf
- Financial Statement (list all creditors and outstanding bills)
- Tax Returns for the past 2 years
- Last 2 months bank statements on ALL accounts
- Last 2 months check stubs
- Listing agreement (I will have this)
- Purchase and Sales agreement (I will have this)
- Hud Statement if you have a FHA backed mortgage (I will have our escrow officer prepare this)
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Don't wait... time is of the essence!
Kat
Getting the package complete the first time is crucial, and asking the SHORT SALE DEPARTMENT IF THEY ARE MISSING ANYTHING EACH TIME.
Tom: Perfectly said. I've said it before, doing Short Sales is not brain surgery.... but you do need to be "organized" and "prepared."
Kat, this is excellent information for those that don't understand the Short Sale process - including real estate professionals. ;-)
Teri; Thanks! I really feel having all the necessary paperwork ready is one of the BIGGEST keys to a short sale.
And then all of the follow-up phone calls. "have you ordered the BPO yet," and on and on and on. ;-)