The Steps of the Short Sale Process

What are the steps in a short sale?  There are hundreds of steps to successfully completing a short sale. That’s why its’ important to have a knowledgeable Realtor on your side. We work in the Bradenton - Sarsota, Florida market, but the short salle process is the same nationwide. iI takes an incredible amount of time, effort, and expertise to negotiate with the lender and get the job done.Here is a brief overview of the steps to a short sale.

Step #1 - Find a buyer for the property.  Without a buyer there is no short sale.  Therefore, the first step is to list your home with an experienced Realtor. You will want to price the home a little below market value to attract a buyer in a short amount of time.  Remember, time is working against you and that your goal is to be relieved of the debt.  Don’t make the mistake of pricing the home as you normally would.  Be very, very aggressive with the price.

Step #2 - The short sale package, including the buyer’s offer is submitted to the mortgagee. Once a buyer is found and the contract is executed, it’s time to submit the “short sale package” to the lender. The documents to be included in this package are described a little later.  Right now, just understand that until a buyer is found, there isn’t much to do.  However, it is important to gather all the documentation that will be required.  Your Realtor can provide you with a list of the required documentation.

Step #3-The Borrower’s lender will order an appraisal or Broker’s Price Opinion (BPO).  This is usually conducted by a real estate agent and submitted to the lender.  It will most likely be a drive-by BPO unless the condition of the property warrants an interior inspection.  The purpose of the BPO is to determine the property’s fair market value. This will pivot point for the lender’s negotiation.

Step #4 - The lender either approves, rejects, or counter’s the buyer’s offer.  Most of the time you can expect the lender to make a counter offer.  The buyer then will decide whether to accept the lender’s offer, reject it, or make a counter offer back to the lender.  Just remember, the lender has the final say and must approval the sale.

This process can take a week, a month, or several months depending upon many factors.  It’s important for all parties to know that this is a lengthy process and that patience is a virtue.

(Copyright © 2007 By Dan Forbes, All Rights Reserved. This material is excerpted from Everything You Need to Know About Short Sales, by Dan Forbes)