Steps to a Short Sale
-Be prepared for the process. Patience and diligence will be your allies and impatience can be your nemesis. Understanding the process will help you through it. The lender will not be rushed. Your experienced buyer’s agent will know how to manage the offer and the correct parties to work through.
-If you are not submitting a cash offer, ask your real estate agent about financing options. The lender may be in a position to permit a loan assumption and modification for a qualified new purchaser, or they may be able to offer new mortgage financing. The more steps that you have completed when you submit an offer, the better chance you will have of a quicker approval. Have your lender’s loan application, information and requirements prepared. The lender will provide you with a package with their forms and requirements. Rely on your buyer’s agent to assist you. There will be a substantial down payment required to have your Agreement approved. Other than for property inspections, there should be no contingencies in your offer. If you have to sell an existing home first, it is unlikely that a short sale will be approved by the lender. Line up your ducks. The more steps you have completed, the easier the process and the approval. Quick and clean will get you to your closing. You would be surprised at how many things don’t end up in the right hands when they float in one at a time. The fewer times that the file has to be handled and the more complete the documentation from the beginning of the process, the better the result.
-The lender will most likely want the property sold “as is.” They will not be motivated to deal with complexities in the contract, particularly since they are selling at a distressed price. These require too many decision points and details that can hang up the approval. Buyer Beware: it is important to protect yourself. Have the property inspected. All the home’s key systems should be checked out. Structural, plumbing, electrical, heating and air conditioning, fire place, swimming pool and equipment, roof and mechanical should be checked. If you are buying “as is,” the risks assumed will be yours. If you have any concern, be sure that the home is checked for pest infestation, hazards such as, asbestos (if the home was built prior to ’85), lead paint (if built prior to ’78), and radon gas, particularly if it has a basement. If you have reason to believe that the area may be in a flood zone or known hazardous or toxic waste area, have it checked out. The title commitment will indicate if the property is in a flood zone. If you have concerns discuss them with your agent. A short sale is like any other real estate purchase, surprises after the closing are avoidable. Most of these items should be covered in the standard local board of realtor purchase offer Agreement. It they have to contend with a lot of complexity, they will probably just as soon that the property proceed to foreclosure where they have a process established.
-Make sure that a legitimate hardship exists on the part of the seller. Don’t waste your time with a seller that is testing the water. The lender won’t approve a short sale unless a legitimate financial hardship exists. To qualify, the seller must be behind in their mortgage payments and unable to make future ones. In other words, if the lender does not approve the short sale, they are foreclosure bound. The lender is doing whatever they can to recover as much of the outstanding loan balance as possible; however, they need approval from the investor that owns the loan and any inferior lien holders before they can proceed.

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No scenario is worse than a homeowner having to face the prospect of foreclosure. However, more than 50% of the American population have to face up to this fact, as an effect of the financial crisis during the past few years. Here, we will enumerate the many options that you have if your home is set to be foreclosed, and how you can choose the best one from the lot. What Every Homeowner Facing Foreclosure Needs to Know about So what’s a recession-affected, foreclosure-facing individual to do? The good news is that there are plenty of options that you can consider if you are a homeowner facing foreclosure. Remember that not all of these solutions are applicable to your particular situation. You need to consider your finances, your future plans and your current needs as a family when deciding which of the following routes to take. First, you can go for a loan modification option. This is a viable financial option if the bank agrees to change the terms of your existing home loan – allowing you to get an ‘extension period’ to stay in your home. When opting for loan modification, make sure to seek the help of a financial expert who can negotiate with the bank so that you can get a deal that works most to your advantage. Second, you can opt to have a forensic loan audit. Here, an expert will review your existing loan documents to determine if any violations were committed. Depending on the results, the auditor can use the information that they will get out of the assessment when negotiation with the bank on your behalf. Third, you can choose to have a short payoff refinancing plan. This is usually handled by mortgage brokers who will determine if you are qualified for such an option. When deciding whether to go for a refinancing plan, make sure that the solution offered by the mortgage broker will resolve your financial problems in the long term – and not just provide a band-aid solution which is merely temporary.

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