You have now decided to short sell your home and you don’t know what you are going to need or what to expect. What comes next? Here is a short sale overview of the process and how it works.
Okay, to set yourself up for short sale success and not short sale hell, here are some of the items that you will need in order to successfully complete the process and hopefully, get the deficiency judgement released.
First, you need to get a short sale REALTOR. Not all REALTORS or real estate professionals are created equal. There are some fantastic agents out there that do not do short sales and even they will admit that you need to get a short sale REALTOR that knows the process and does this type of niche sale to be successful.
Second, get your documentation in order. You will need to prepare a hardship letter. Some have asked if a divorce is considered a hardship. Well, most folks would say yes, some lenders, however, would say “nope” because they assume that provisions have been made at the time that a divorce decision was made. An example of a hardship is job loss, major medical issues, or death of a loved one that was an earner in the home.
In addition to the hardship letter, you will also need your tax returns for the last 2 years, bank statements and pay stubs for the last 2 months, a personal financial statement which lists your assets, liabilities and monthly expenses. You will also need to give the attorney or person negotiating on your behalf the last 4 digits of your social security number and the mortgage statement which shows the name and account number of the lender. You will also need to sign an authorization letter so that the negotiator will be able to speak to your lender on your behalf.
Your REALTOR will provide to your negotiator a copy of the listing agreement, sales contract, pre-qualification letter for the buyer, and a comparative market analysis on your property and all contact information for the buyer, buyer’s agent, you and your agent.
The Attorney and/or title company will provide to the lender a copy of a preliminary HUD-1 settlement statement showing an approximation of closing costs so that the lender can see the entire picture and make a decision on your file.
The lender will then order a BPO which is a Broker’s Price Opinion. This is where a 3rd party broker who is not a party to the short sale transaction goes to your home (sometimes just as a drive by inspection) and gives your lender an opinion of what they believe your home is worth. On a drive by inspection, they do not consider the interior upgrades or condition as they are not entering the home. Your REALTOR must be familiar with these BPOs as sometimes it is necessary to strongly oppose or clarify with your lender that the BPO value may be off. Please understand that the Short Sale process is complicated and no two scenarios are the same so please consider this overview as a guideline only.
If you are thinking of short selling your home, give the short sale experts at Chamberlain Realty a call at (407) 542-3033 or email us at ChamberlainRealty@gmail.com.