Successful Short Sales

Every day I talk to someone who wants to know more about short sales in Real Estate. Here is my post of April 26, 2009 on Short Sales.


A Successful Short Sale!
The key to negotiating a successful short sale is to price the property correctly to obtain an offer the lender is willing to accept. This means the offer must be more finanacially feasible for the lender to accept a short sale rather than foreclosing and selling the property themselves.Once you get a reasonable offer submit that to the lender with the following information:
Purchase and Sales Contract
Prelim HUD-1
Buyers Pre-Approval Letter or Proof of Funds
Listing Agreement
Authorization Form
Sellers Financial Statement
Sellers Last Two Pay Stubs
Sellers Last Two Bank Statements
Sellers Last Two Years Tax returns
It is important to send a complete package to the lender as opposed to "piece-mealing" it one document at a time.
Also, put the account number on each page. Send the entire package to the second mortgage company if applicable.
Each lender will have certain methods to process the short sale once it is recieved, but the general procedure for short sale approval is the package is reviewed to determine whether the price may be acceptable and completeness of all documentation. It is then sent to another "handler" to order an appraisal or BPO (broker price opinion). Many lenders are requesting 2 BPO's to verify fair market value. If offer falls within acceptable range of fair market value, it is then sent to the "investor" for final approval or counter offer.
Once you recieve an approval, the lender will require closing in 30 days. Most lenders will grant one extension if necessary, but don't count on it.
As I mentioned in my last blog, this process will take approximately 90 days.