Short Sales

In a short sale, the homeowner’s bank or mortgage lender agrees to “discount” the total, outstanding balance on the mortgage because of an economic or financial hardship on the part of the borrower. The homeowner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. A short sale is usually the most economical solution to a problem. The bank or mortgage lender will incur a smaller loss than would result from a foreclosure or continued non-payment of the mortgage. Not all lenders will agree to accept a short sale that will incur a loss, and not all sellers or properties qualify for a short sale. Although their willingness varies, banks may be open to negotiate offers of short sales, especially in overwhelming or volatile market changes.

Stetson Real Estate has participated in numerous short sales and well understands the process. We have the necessary experience and knowledge to, confidently, assist you in navigating the maze of a short sale.  Having worked directly with attorneys, banks and lenders to facilitate a relatively seamless transaction, Stetson Real Estate professionals are well-informed and stay up-to-date with the most current developments in short sales.

Although all lenders have varying requirements and may demand that the borrower submit a wide array of documentation, the following can give you a good idea of what to expect.

• Call the lender and try to get to a supervisor who can get the ball rolling.
• Submit Letter of Authorization: Lenders will not typically disclose your personal information without written notification. If you are working with a real estate agent, title company or attorney, you will receive better cooperation if you write a letter giving them permission to talk with these people.
• Preliminary Net Sheet: This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments and late fees, including real estate commissions.
• Hardship Letter: You will submit a statement of facts that describes how you got into this financial bind and makes a plea to the lender to accept less than full payment.
• Proof of Income and Assets
• Copies of Bank Statements
• Comparative Market Analysis: Your real estate agent can prepare a CMA for you which will show prices of similar homes.
• Listing Agreement and Purchase Agreement: When you reach an agreement to sell to a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. If everything goes well, your lender will approve your short sale.

Every borrower has a unique set of circumstances. The first step to a short sale should be a consultation with a Real Estate Attorney and Certified Public Accountant.