 Download PDF Brochure "Buyer & Seller Short Sale Info" 118KB file
THE SHORT SALE PROCESS
- Once we have the requested documents from the seller and the short sale package is complete, our office will fax it to the lender’s Loss Mitigation Department. Confirmation of receipt typically takes 7 to 10 days and multiple submissions are sometimes required before the lender acknowledges the package has been uploaded.
- Set Up After initial set up and review by the lender, additional documents may be requested either before or after the assignment of a negotiator. Sellers will need to provide periodic updates of date sensitive materials like pay stubs and bank statements.
- BPO The short sale lender orders a BPO (Broker’s Price Opinion), or appraisal. Some lenders may want the appraiser to enter the home, some may just do a drive-by, and others rely on a Comparable Market Analysis prepared by a Broker of their choosing. If the loan is backed by an investor, the lender will forward the file to the investors and mortgage insurance company, where applicable, for approval.
- Pay Off Letter Upon approval, the seller’s lender will send a payoff letter specifying the amount they are willing to accept and a “good through date”. There is a very limited amount of time to close the transaction once this letter is issued and both parties should be ready to move forward immediately.
- Approval Letter After we receive an approval letter we will contact both parties to make an appointment to sign documents.
- We are flexible and happy to do evening, weekend, and remote signings. And as long as the signing is in Whatcom or Skagit County there is no additional charge.
WHAT IS NEEDED TO BEGIN
Our office works with sellers to prepare a short sale package for their lender. We often begin this process as soon as a Listing Agreement is signed. A package typically includes:
- A signed authorization giving lenders permission to speak with our company and your agent.
- A copy of the Purchase and Sale agreement with all of its addenda
- An estimated closing statement
- Listing agreement, and/or listing history
- Comparable sales
- Hardship letter (we are happy to help sellers prepare this)
- Budget and/or financial statements
- Bank statements
- Pay stubs
- Tax returns
- Investment, retirement account statements
- Letter of loan commitment from the buyer’s lender
- Appraisal
This list may seem intimidating, but we are here to help sellers through every step of the process!
HELPFUL INFORMATION
* Please be aware that lenders are often unwilling to allow seller contributions to closing costs. Buyer should be prepared to seek these funds from alternative sources.
* Be patient! Short sales take time. The average length of time, from the lender’s receipt of short sale package to an approval letter, is a minimum of 90-120 days for conventional loans, and 120-160 days for Freddie Mac and Fannie Mae loans.
* Being prepared, organized, and proactive will make short sale transactions less stressful and time-consuming for all parties involved.
* Every lender will order/perform some kind of evaluation of the subject property to determine “fair market value”. Most use BPOs (Broker’s Price Opinions), although more complete appraisals are sometimes performed. If the purchase price is significantly below the lender’s value, the lender will likely make a counter-offer or request the parties do so.
* As a condition to issuing written consent, Short sale lenders typically ask for evidence from the Buyer’s bank that a new loan has been fully approved. Purchaser need to make sure their own financing is in place and ready to go.
* Short sale approvals require closing within 30 days. They are no guarantees extensions can be obtained and the short sale lender may charge additional money to do so.
* Short sale lenders do not pay for home repairs. Buyers need to perform inspections when their offer is accepted so they can make any appropriate adjustments to the purchase price before the initial short package is submitted.
Our Service In The NW
Serving all of Puget Sound area including Seattle, Everett, Tacoma, Bellevue, Bellingham, Spokane, Mt Vernon, Olympia and Bremerton.
Please tell your Real Estate agent you would prefer to have Escrow Legal Services perform your closing or short sale negotiation.
Please remember that the information on this site is informational only and should not be construed as legal advice. Please feel free to contact the professionals at Escrow Legal Services for information appropriate for your situation.
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