Many home owners are justifiably confused when it comes to a short sale. Clients are relying on their Realtor to be the expert that will assist them through their home selling process. A short sale is a very challenging process and can be devastating for a client if the appropriate steps are not taken, in a timely fashion with the lender.
Do I Qualify For A Short Sale?
The mere fact that you owe more than your home is currently worth does not qualify you for a short sale. You must be able to show financial hardship and the inability to no longer afford your mortgage payments. Lenders will look at what your monthly shortfall is (total monthly expenses versus your monthly income). They will also look at your other assets that could be liquidated in order to continue to pay mortgage payments. The one thing that is protected is your retirement. Banks cannot expect you to liquidate your retirement to pay mortgage payments.
How Long Does A Short Sale Take?
A short sale can take between 100 days and 18 months. With the process taking this long, you can see how many home owners slip right from not being able to make payments into foreclosure. It is critical tht your Realtor be extremely knowledgeable with the entire process of a short sale.
Can A Third Party Professional Be Beneficial?
If the right third party is used, this can streamline the short sale process. Settlement Agency of Michigan is a third party agency that Realtors can use to assist in the short sale process. Settlement Agency of Michigan (SAM) utilizes their 30 years of title and escrow experience with technology to manage the short sale process and keep the interested parties informed of the file status. The team works exclusively with short sales and are not affiliated with traditional real estate transactions. There is a tremendous amount of paperwork and information gathering that must be obtained form the home owner and relayed to the lender. One transaction could require dozens of follow up phone calls daily to make sure that all of the details are being adhered to and that all of the lender requirements are being fulfilled. SAM works with many of the national and local lenders and is very apprised of the ever changing requirements of these lenders. If your agent is using a third party agency to manage the paperwork portion of the short sale transaction, if frees them up to market and find a buyer for your home in a timely manner.
Christine Stalsonburg, Realtor
Re/Max Bayshore Properties
231-409-4140
There is a tremendous amount of paperwork and information gathering that must be obtained form the home owner and relayed to the lender.
Question that a Realtor should ask a Homeowner Considering a Short Sale: "Are you prepared to comply in a timely manner when submitting documentation required by your lender?"
I have found that using a local closing agent that is experienced in short sales make the process so much easier. I am a fan of third party assitance in short sales. Good info here. Thanks.
Another question to ask of the homeowner is: "are you prepared to accept responsibility for at least a portion of the deficiency?" This is especially important if there is a second mortgage, as that is the more likely candidate to require a soft note. Occasionally, the primary lienholder will ask the homeowner to contribute a relatively modest amount. Sellers need to understand that they may have some liability in such a transaction.