A short sale is where the bank agrees to allow a property to be sold for less than the mortgage. Example: The mortgage balance is $400,000 and the property value is $200,000. We would be asking the bank to take a short sale in the amount of $200,000.
Before a property is listed for short sale, it is advisable that the owner pursue every option possible. Please call us and we can give you more information on this.
The first step is calling your bank. They can let you know what programs may be available to you. Be ready for this to be a time consuming project. The worst thing you can do is to avoid talking with your bank. Remember, millions of people are experiencing the same emotions and financial challenges as you. Most people have always paid their bills and have not experienced times such as these last few years. In most cases, working with your bank will allow you to stay in your property longer. Through all of this, your first priority should be to take care of your family's welfare.
If you are no longer making your mortgage payments, a foreclosure will be initiated by your bank. However, a short sale can proceed along with this process. ***PLEASE REMEMBER THAT THERE ARE LAWS BY WHICH THE BANKS MUST ABIDE - THERE ARE REMEDIES FOR YOU. DO NOT LEAVE YOUR HOUSE, THINKING SOMEONE WILL KNOCK ON YOUR DOOR AND YOU WILL HAVE TO LEAVE** There are many steps to a foreclosure. These steps can take months and months and you must be notified of any action the bank takes with plenty of notice.
It is also important, whenever possible, to continue paying any homeowner association fees.
If all options are exhausted, then your property should be listed. There are numerous steps to the short sale, a few are listed below:
You will still be the seller of record and sign all documents. However, the bank will decide what price is acceptable to them. You will also be required to submit several documents to the bank: a hardship letter stating your inability to continue making mortgage payments, P & L worksheet, two years tax returns, bank statements and pay stubs.
The short sale process can be a long one. Depending on who actually owns your loan, a file can be approved in a week or it could take months. Some banks have loans in their portfolios or a loan can be owned by one of many investors. An investor can give a bank permission to negotiate the price on his/her behalf. If the bank doesn't have permission, then the investor has to be located for an offer or a counter offer. This can take time. Many times, during this lengthy process, a buyer will locate another property. Then your property is put back on the market and the whole process starts over again. (Having closed numerous short sales over the past years, we have developed some quick fixes along the way).
With some banks, an offer can be comparable with other sold properties and the bank/investor still refuses. This is where you need an experienced agent who is persistent and will contact the bank numerous times to achieve our goal - complete a sale and allow you to continue on with your life.
While the short sale is in process, the foreclosure action continues. We are in constant touch with the bank to keep them updated to be sure the foreclosure dept. is aware of the short sale. (The foreclosure and short are two separate actions and the departments work separately).
In a short sale, the commission, any back taxes, etc. will usually be paid by the bank. The bank could ask for a seller contribution, depending on your finances. We can explain more about this in detail.
Please call for more information. Allow us to listen to your needs and concerns. There is no obligation and we will help in any way we can. Please call or text 305-588-9040 S. Fla; or call 772-692-7848.
Nancy Magner, P.A.,CRS
BROKER-OWNER
