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Friday, March 02, 2012

Short Sales – Get your "stuff" together before the offer is received...

Short sales take a lot of effort to sell.  Short sales take a lot of patience.  Almost 23% of residential sales in Brevard County, Florida last month were short sales.  [What is a "short sale?"]

Most of the short sales that closed in February were probably under contract for some time although the average days from listing to contract was only 138 days.  Short sales take time because negotiation and approval by the lender often takes months.  It is a bureaucratic process.

To speed the process along sellers of short sale properties should start preparing the “package” the lender will be using to make their decision as soon as the property is listed and not wait until an offer is received. 

Although each lender is different here are some of the items likely needed by the lender.
  • Hardship letter signed by all sellers identifying the problems/issues requiring the sale.
  • Financial Statement identifying assets, expenses (car payments, credit cards, etc.). 
  • Pay stubs /proof of income for last 30-60 days. 
  • Bank statements for the previous two months.  These include savings, checking, 401K, IRA etc. accounts. The lender may come back and ask for newer statements if the process drags out so be prepared.
  • Tax returns for the previous two years. 
  • Listing agreement with short sale addendum.  Copies of your listing agreement will be provided by your real estate agent. There is no reason to try to sell your home as a FSBO when the lender will pay your real estate agent! 
  • Home owner or condo association contacts and information.
  • Property information.  When purchased, how it is titled, etc.
  • Other lien information like second mortgages, home equity line of credit, lien for that pool installation, etc.
Depending on who the lender is and who will be negotiating with your lender (title company, attorney), the requirements for documentation will likely change somewhat.  I am not an attorney and do not offer legal advice.

If you are facing a hardship and selling your Florida home as a short sale is a consideration, give me a call or drop me an email to discuss the process.   If you are located outside of Brevard County, Florida, I would be happy to refer you to a local real estate professional in your area.


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