To obtain a short sale in California, you must use a licensed real estate agent. This must be a broker who has experience and knowledge in short sale negotiations. The good news is that I am a licensed and will do this for you at no-cost. How is this possible? The lender pays the listing commissions when we sell your property, and while the short sale process is occurring you are allowed to stay in your home.
Step 1: Determine if a Short Sale is Right For You.
A short sale is a real estate transaction where the property is worth less then you paid or owe for home and you are in hardship , can’t make payments anymore and may be in Notice of Default (pre-foreclosure). A short sale may be your answer, and the good news is, it postpones the auction date, and the lender pays commissions, closing costs and it has less of an impact on your credit, if approved.
Step 2: Obtain Required Documentation
Most lenders require specific documentation, and they don’t all require the same thing. Normally the first required document is a hardship letter, which is sent to the lender and explains why a borrower can no longer afford their monthly mortgage payments. The documents are gathered and sent as a package to the lender. One thing we must know is if you have liens other then loans, we must check your credit and title. (child support liens, credit card debt) These kind of liens may hold up closing, and approval because the banks do not pay for these.
Step 3: Market the Property
The home is marketed to potential buyers through various channels. You are allowed to live in the home while it is being offered.
Step 4: Negotiation of the Short Sale
Once there is an offer on your property, we submit the offer and paperwork to the lender and negotiate the deal. Negotiations can be tedious and take time. It’s best practice to continue to market your home and get backup offers because if your first offer wasn’t high enough, the lender will counter and tell you they need a higher offer. An ideal offer is one that is close to the appraised value of the house.
Step 5: Finish the Transaction
If the offer is in the neighborhood of the appraised value, most likely the lender will green light the deal. The next and final step is to begin escrow and close the transaction. You should save to move while this is happening.
Go to www.Realtor.Org/Shortsales for links to the guidance, these FAQs, a summary, and much more information about short sales.
|2-3 years to regain a positive credit standing.
|7 years to regain positive credit standing.
|Written on your credit report: “paid as agreed”, “paid as settled,” “paid in full,” – all very similar, little affect on your credit standing.
|Written on your credit report: “foreclosure” – reduces your credit rating by hundreds of points.
|You can control the amount of credit lost:, the less of your credit is lost with fewer late payments you have.Contact your bank immediately when you know you are having financial difficulties cannot afford your home.
|The credit bureaus have a systematic way of handling foreclosures. To foreclose means you are starting over with your credit.