Preparation and organization are some of the keys to a successful Short Sale. This starts with the listing process.
1. Determine if your seller has a legitimate hardship. Some of those are: loss of income, divorce, medical, transfer, job loss, death of breadwinner, etc. Not "I want to move", "I am tired of paying the mortgage" or " The value of my house went down".
2. Very important -ask your seller to contact his lender before you list the property. Why? The lender may have a loan modification or forbearance plan that may help your seller solve his problem. Additionally, the lender may have its own preferred loss mitigation package to send to your seller. Further, a few lenders order an appraisal of the property at the beginning of the Short Sale process. Some examples are: BB&T, First American, and Citi Residential. The early appraisal may be helpful to you in determining a target "net". The challenge of an early appraisal, however, is that the market is still declining in most areas and appraisals don't stay valid for long.
3. If your seller has received foreclosure correspondence from his lender, recommend he contact an attorney. In any event, your seller may want legal advice if he has any concerns about his rights with his mortgagees.
4. After listing the property, prepare your separate Short Sale file in advance. This will save you time when you receive an offer, and keep you organized. It's best to have a separate Short Sale folder, because extraneous information, such as surveys, disclosures, etc. will not be needed to send to the lender.
What is in this file? For each lender, such as first mortgage and junior lien, prepare a set of documents as follows:
- Hardship letter
- 1-2 years tax returns
- Financial Worksheet
- Listing Agreement
- Payoff of other lien if more than one (order immediately after listing)
- Letter of Authorization (send to lender immediately after listing)
Use pre-printed labels for every page with appropriate loan number and description of what each page is, e.g. Hardship Letter 877600984
Remember when you actually have a contract you will need to supplement each package with your seller's most recent proof of income and bank statements.
There are many factors that contribute to a successful Short Sale. Preparation and organization are two of them.
It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Florida real estate
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Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
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Wendy Rulnick, Broker and Realtor, specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. She lists and sells homes, condos and townhomes. Wendy has been selling real estate for almost 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she negotiates successfully to her dients' advantage. She is supported by a team of top buyer specialists.
All Rights Reserved. *Short Sale Listings: Tips & Tricks* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity. Copyright © 2008 by Wendy Rulnick.
This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.
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Hi, Wendy. I am new to AR and just found this blog. Thanks for the tips. Next week I will be listing my first short sale of a luxury home. I need exposure to all the tips I can get! Thanks, again. If you or anyone can provide me with a 'cheat sheet' of sorts, or a general guidelines paper/website for short sales, I would greatly appreciate it.
Jan - You are welcome. For more short sale info, check my Emerald Coast short sale website. Best of luck!
Hi Wendy: Some great tips for getting the short sale prepared.
Excellent advice Wendy. It is easy to see that you are the Short Sale expert for Dustin Florida.
Kelly -Thank you. Hope you find them helpful.
Thanks, Bill! l am starting to get a "reputation" :)
Wendy. I visited your website on short sales and found it very helpful. Thanks, Jan
Thank you, Jammin Jan! There is a ton of info on AR, also. You might consider working with an experienced Short Sale agent in your area, too.
Wendy, this is a concise and informative check list (or reminder) for us all. Thanks for the information.
Vickie - Sometimes I feel like an automaton!
Wendy, these are all great points, particulary the separate file for the info specific to the short sale. I don't know how much time I've wasted digging through the listing file for that specific info. Thanks!
Another good piece of advice is to include evidence of hardship, I have come to find out (for me at least!) that it expedites the response time and go at the top of the list. eg I had a homeowner that lost his job due to disability and lost a kidney, I included the layoff letter, medical docs, and kidney removal docs. I got a call right away from the Lender willing to help, I kid you not. Hope that helps!
-Nelson
Laura - The separate folder really simplifies the process. You are welcome!
Nelson - Wow, that's great advice, Nelson. I had a client who had cancer and was waiting for a transplant, and I emailed the negotiator the link to her online Caringbridge journal, where friends could check her status. I never got one objection to the Short Sale. Fab idea to include it upfront!
Wendy:
Great information. I like the way you have laid it all out. Have you notice many differences within state laws?
Joe
Joseph - Thank you. I am in Florida, so don't know if there are extra requirements in other states. I know sales contracts certainly differ. I'd suggest you ask an experienced Short Sale agent in your state.
Thanks Wendy. You are a wealth of information. My listing is almost a short sale. I think the days are short. Well, I better get all those ducks in a row since I feel that is where we are headed. The bank won't listen to the seller. You know how that is. So she is about to walk. I hope we can sell her place and send her on her way with a little money in her pocket. The market is dropping!!
Hi Sue! The market is still dropping in good ole' New England, too? Sorry to hear that. I am up for a trip to Conn for Thanksgiving. I hope it snows. I am glad you find my info helpful. Best of luck on your sale!
Hi Wendy,
Do you come across any short deal on multi family properties? If you do, can you contact me at 203-757-7202.
I am looking for 20+ units.
Thank you,
Joe
AbreuRealty.com
Hi Joe - Will do!
Wendy,
Did a search and found your old blog post. Excellent tips for short sales!
Hi Wendy! I found you on Dinah's re-blog and don't know how I missed this two years ago!! Great post!
Hope to see you in Orlando on Tuesday??!!
Dinah - Thank you!
Debe - I will miss Orlando, but KNOW I will meet you some time :)