How to do a Short Sale
Step by Step Guide to a Short Sale.
In order “to do” a successful short sale, you first want to find out what options are available to you. Yes believe it or not you do have options like the government’s HAFA short sale. You also want to call your bank or servicer and find out what programs they may be offering.
Next, it is always best that prior to starting a short sale or once you receive an approval, you contact an Attorney and CPA/Tax Advisor to better understand the outcomes of a short sale.
So how to do a short sale…
Once you evaluate what program you want to apply for, you then should assemble your team. You are going to need a realtor and title company to work with.
The Realtors Role: Banks are going to require you to properly market your home in order for you to get the best offer, you will need a realtor in order to do this. They will also require you to submit a Listing Agreement, MLS History Report & in some cases comps to support your offer. All of these items and tasks will be handled by your realtor that’s why it is necessary to have one. You also want to choose a realtor who understands the short sale process.
The Title Company: A Title Company is required in order to do a short sale because the bank will require a preliminary HUD-1 Statement with your detailing all the costs, fees and unpaid liens that may be attached to your property. It is important for the short sale title company to perform all the necessary preliminary searches in order to properly prepare a HUD-1 statement.
Now that you have assembled the team you are going to use to help you with the short sale process…You would want to finish gathering all the documents per the checklist you are following and follow the bank or servicer instructions for submission. It is important that once you send the bank your package you want to call about 48 hours later and confirm they have received the short sale package.
At this point at the bank your file will go to a short sale processor who will confirm that you sent all the necessary short sale documents they require and then order a BPO(Broker Price Opinion, this is performed by a random 3rd party realtor or appraiser in order to get an updated value). Once the file audit is done, your file will be assigned a negotiator where he or she will evaluate the package and offer you submitted.
Depending on the offer and the short sale program you applied for the negotiator will respond back with the terms of the short sale again it is always best that if you don’t understand what you are about to sign, you seek the advice from a certified accountant and lawyer. From here, if you except these terms the short sale title company will finish up the title search work and schedule your file for closing.