How do you structure a short sale?

A seller’s short sale package will most likely consist of:

  1. A letter of authorization for your agent to speak with the bank.
  2. A preliminary closing statement.
  3. A completed financial statement or request for mortgage assistance (RMA).
  4. A hardship letter from the seller.
  5. Tax returns for the previous two years.

What are the terms of a short sale?

For a sale to be considered a short sale, these two things must be true: The homeowner must be so far behind on payments that they can’t catch up. The housing market must have gone down so much that the house is worth less than the remaining balance on the mortgage.

What is the time frame for a short sale?

The actual time frame for a short sale can vary a lot. The time to close depends on where you live. It could be way longer if multiple lenders are involved. And 60-90 days is just an average, meaning by definition that some take less time and others more.

Who are parties to a short sale transaction?

Since a multitude of different parties must cooperate to get a transaction completed (buyer and seller, both sets of realtors, creditors, escrow company, insurance company, the lender, the broker AND the bank finally) it may be necessary to have everything completed BEFORE the bank signs off on it, allowing it to be …

How can I make a short sale faster?

Speed up your short sale closing date by making your offer as free of contingencies as possible. Submit your mortgage approval with the offer. Contribute a substantial deposit to show your good intentions.

Why do short sales take so long to close?

With a short sale, the seller is asking the bank to take less than the amount owed. Even if you’ve made an offer and the seller has accepted it, it’s not a done deal. The seller’s bank must approve the sale, and this is where the big delays can happen. Banks are losing money in a short sale and aren’t too keen on it.

How long can a short sale last?

A conservative estimate should allow for six months, start-to-finish, on a short sale. While it’s technically possible to complete in as little as two months, it’s unlikely. As we’ve reiterated, your patience will be one of the most crucial aspects of your short sale timeline. Well, that and a great agent, of course!

Why do banks take so long to approve a short sale?

As new people filter in, they have to get up to speed on the deal, and that can take even more time. The system isn’t perfect, and it eats up time. And the more money the lender will lose, the more time it may take to process and approve the short sale.

Is it better to foreclosure or short sale?

Short sales are less damaging to a credit report than a foreclosure. A foreclosure is when a home is seized and put up for sale by the investor or bank. Every mortgage contract has a lien on the property that allows the bank to control the property if the homeowner stops making mortgage payments.

How can I speed up a short sale?

Why are short sales so difficult?

Short sales are a mixed bag for the buyer, the seller and the lender. If you’re a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure. You’ll also walk away from your home without a penny from the deal, making it difficult for you to find and pay for another place to live.

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