Summary Of The Short Sale Process for The Homeowner

The short sale is a very detailed and complicated process and would take hours just to explain so I will focus here only on the simplified key points of this procedure. 

1.  Homeowner realizes that the home needs to be sold. Homeowner can no longer afford to make the mortgage payments, owes more than the home is worth, quite possibly has missed payments although not necessarily.  The homeowner contacts a realtor who is a short sale/ distressed property expert and after a prequalification interview where it is decided that the homeowner in fact qualifies for a short sale,  lists the home. The realtor gives the owner a list of financial information to gather up that will soon be needed by the lender. Bank account statements, pay stubs, bills, etc.  Meanwhile, the realtor aggressively markets the home to find a qualified buyer.

2.  The homeowner provides the realtor with the requested financial information, and signs several lender required forms which the realtor provides. The realtor contacts the lender or lenders and sends these forms  as a short sale package to them and requests that the lender does not foreclose on the home. Contact and follow up is made with the short sale department and possibly with known negotiator contacts and other necessary departments at that lender or  lenders.

 4. The results of the appraisal are compared with the purchase offer price by a negotiator who is assigned to determine if a short sale should be approved and to handle the negotiations between the owner’s realtor and the investor who needs to be convinced to allow the short sale to occur. If there is more than one loan outstanding there may be several negotiators which the realtor must deal with. The negotiators also deal with each other in offering different amount of payoffs to each investor.