Welcome to class today on surviving your short sale.
Anyone in a short sale situation knows, it’s anything but short, and it’s anything but predictable. No two short sales are the same, however there are some general guidelines.
Here are a few of the basics once you have an offer:
- Your lender requires your entire application/package be submitted all at the same time. Be sure to do it right from the beginning, in the long-run it will save you time and help save your transaction. Most lenders today use a “platform” online system where everything is uploaded at one time by your REALTOR.
- Using the platform as the borrower you upload (through your own portal) your financial and hardship situation.
- Your approval could be determined by a third-party negotiator (an asset manager outside your lending institution) who is most likely over-worked and has more on their plate than they can handle.
- Your approval process will normally be more difficult if there is more than one loan. Even if multiple loans were made by the same lender, you may have two completely different departments (or locations) needed to approve the process.
- Your second (or 3rd) lender won’t (and isn’t required to) roll over, they will expect some compensation/payoff to sign off the loan (it also depends on the laws of your state) this will be negotiated with the first lender. Your broker is not the appropriate person to provide legal or tax advice, (unless your REALTOR or is also an attorney or tax professional) you are advised to see your own from the proper professional.
- Your lender (if approved after waiting months) will want a fast closing and condition the approval on a final last minute review of costs/expenses just days prior to closing.
8. Your buyer is not required to meet your lenders terms and could walk at that point, or bail when they’re tired of waiting. However buyers who are properly counseled on what to expect will usually hang in with you…at least to a point.
- Your short sale addendum in CA (for example) to the purchase agreement states you shall reasonably cooperate with the lender (s) in the short-sale process.
- Your buyer’s initial deposit check may or most like may not be placed into escrow until written approval is received from your lender. Depending on your contract, your buyers timeline for inspections and investigations begin once you have written approval from your lender.
- You and your buyer may incur some expenses during the escrow, i. e. inspections, appraisal, association documents. etc, etc. even though there is no assurance it will close.
- Your REALTOR does not have control of whether or not your lender will approve the sale, yet working with an agent experienced in short sale can be crucial to your success. Most asset managers have little time and patience to work with an uninformed short sale agent.
So thanks for checking in at HomeSelling101.com and if you have time for some “after class extra credit” take a quick look at a couple of 2-Minute Short Sale Videos, 2011 The Year of the Short Sale & The Short Sale Waiting Game!