Short Sale Process
Every lender is different, every home has different obligations to satisfy and nothing, nothing is guaranteed.
The first step is to try to save your home. I will always try to help potential Sellers keep their home through the Making Homes Affordable program. I do not charge a fee for this, and you should be wary of companies that do. All I hope is that if I can help you save your home, you can refer someone to me that I can help.
The second step is a home evaluation, and this gives me an idea of whether a short sale is an option. Some of the factors involved are a) how many liens are against the property, b) what type of liens are they, c) is the property a primary residence, d) is there mortgage insurance and e) the marketability of the home. All of this can be taken care of over the phone or in person, but I can let you know that day, if not during the phone call, whether a short sale is possible.
Download the Short Sale Seller Advisory from the Arizona Department of Real Estate
The third step is to sell the property. There is more paperwork involved with a Short Sale listing than a normal listing, and I will review this with you. Once the paperwork is complete and the property is prepared for showing, we are ready to market the property. I use the Internet better than most people; my listings appear on over half of the top 15 industry websites, not to mention the largest agent network in the world.
The ideal Buyer is someone who is patient (short sales can take 3 to 4 months to get an initial approval or counter offer), and is typically a first time homebuyer. Most cash investors don’t have the patience to wait, and most financed buyers get shut out of the REO/foreclosure homes because cash buyers can close quickly.
The fourth step, once we have found a buyer, is to complete a Short Sale Package for the lender(s). Along with the Buyer’s offer and proof of financing, we need to submit paperwork that details your inability to keep making mortgage payments. Each lender is different, and they may have specific forms to complete, but this is typically what they are looking for from the Seller:
Short Sale Financial Paperwork for the Seller
Signed Borrowers Authorization
2 most recent paystubs
2 most recent bank statements
Letter of hardship – signed and dated
Monthly budget – In one column, write down all of your expenses and total. In another column, write down your incoming (salary/wages) and total.
Previous year’s W2s and 1040s (include all forms – federal returns only)
Once this has been submitted, the bank will assign the account to their Loss Mitigation department, where an underwriter or negotiator will review the paperwork, and order a BPO (appraisal) to determine the market value of the property. Once they determine the fair price for the home, and that your financial situation warrants a Short Sale, they will either accept the offer or counter. Once all parties come to terms, the expectation is that the transaction will close within 30 days.
Home Affordable Foreclosure Alternatives (HAFA) Program
If your mortgage payment is unaffordable and you are interested in transitioning to more affordable housing, you may be eligible for a short sale or deed-in-lieu of foreclosure through HAFA SM. The benefit of a HAFA short sale is that you are no longer responsible for the difference between what you owe on your mortgage and the amount that your home sells for. You will also receive $3,000 in relocation assistance upon successful closing of your short sale or deed-in-lieu of foreclosure.
Eligibility*
You may be eligible to apply if you meet all of the following:
- You live in the home or have lived there in the last 12 months.
- You have a documented financial hardship.
- You have not purchased a new house within the last 12 months.
- Your first mortgage is less than $729,750.
- You obtained your mortgage on or before January 1, 2009.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.
*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you qualify for HAFA.
Program Availability
HAFA SM is available for mortgages that are owned or guaranteed by Fannie Mae and Freddie Mac or serviced by over 100 HAMP SM participating servicers. A list of HAMP participating servicers can be found here .
Free Consultation
Please complete and submit the following Short Sale Evaluation form. The more information given, the more accurate the evaluation. Please include your current property address, as well as your email address and the best number to reach you. All information you provide is secure and will be kept strictly confidential.
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