There are many ways to qualify for a short sale and in order for the lender to consider taking less than what you owe them, you must prove to them that you've suffered a hardship. This could be a variety of issues including loss of job, loss of income, injury, divorce, etc. Each case is handled differently and it's important to discuss this with an agent who is qualified to help you sell your home.
Getting your short sale pre-qualified in the beginning will save you heartache and trouble down the road. Typically the bank will work with qualified homeowners and help set a listing price with periodic price adjustments. This will allow them to see a history of traffic and if the home is competing well against listings in the area. After an offer is received the process really starts.
The bank must collect all of the necessary paperwork and disclosures from both the buyer and the seller. Sellers must provide 2 years of tax returns, 2 months of bank statements, and employment verification with pay stubs. The banks will do a more thorough examination to determine whether the seller receives final approval for the short sale.
In some cases sellers may be asked to bring some money to the table. When the lender is forgiving $85,000 of your debt and they are asking for $2,500 at the closing table it makes sense to most home owners to put down the $2,500.
The communication process is slow and most of the time communication is only necessary when something has changed or been approved. You are in line with thousands of other buyers competing for the same loan coordinator's attention. From start to finish you could end up being passed through several different people in various positions at the bank until the "investor" has given the FINAL go ahead.
Hopefully you have a great closer who can prepare all of the proper docs and HUD statement for the bank to go along with the wire transfer. The process could take a couple of months and it could take more. The banks are getting better at their processes and the sellers are starting to see the option of a short sale making more sense than a foreclosure.
For more information on Short Sales in Spokane call Peter Hagen 509-850-1900
