When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.
WHAT TO EXPECT?
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
Call the Lender
You will need to speak to someone in the LOSS MITIGATION DEPARTMENT or LOAN WORK OUT DEPARTMENT
Submit Letter of Authorization
Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent or title company or attorney, the lender will be more cooperative if a letter is given to the lender with permission for them to talk with the specific interested parties about your loan. The letter should include the following:
Preliminary Settlement Statement
This is an estimated closing statement that shows the sales price you expect to receive and the costs of sale, closing costs, state stamps, real estate commissions, any unpaid taxes or HOA dues, etc. Your title agent can prepare this for you.
This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment.
Proof of Income and Assets
Lenders will want to balances of savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or assets of tangible value.
Copies of Bank Statements
Typically Lenders require a 3 month review of all bank accounts.
Listing Agreement and MLS Printout Sheet
Your real estate agent can provide this to you.
Purchase Agreement (Sales Contract)
When you reach an agreement to sell, the lender will want a copy of the offer. The lender may renegotiate terms of contract, such as commissions, fees, and refuse to pay for items such as home warranties and home and termite inspections.
ITEMS YOU SHOULD BE PREPARED TO GIVE THE LENDER:
Each lender typically has their own documents and forms required for short sale. Contact any of our offices – We know what each individual lender requires.
We encourage you to consult an attorney and tax professional in regards to the possibility of a deficiency judgment or possible tax obligations. Some lenders pursue deficiency judgments after closings, and can issue you a 1099 based on the amount of the loan that was forgiven. It is important you understand all aspects of a short sale before moving forward.
Contact Hillsborough Title to make sure your short sale proceeds as smoothly and stress-free as possible.
We offer the following services helping you through the process of the Short Sale!
All this at no additional costs to you or your buyer!
We customize our services to best fit your needs!