The following written by Bob Jeffries presents Guidelines to Consider when starting to sell in the short sale Arena. Published in The Breeze, Real Estate Section, June 14, 2008
1. First of all, a short sale should only be considered if your loan amounts, added to closing cost, will be greater than the value of your property. Since most all foreclosure situations are falling into this category, let’s continue.
2. If in fact your lender has agreed to consider a short sale, then your first step is to hire a licensed Realtor familiar with the short sale process. They will start by providing you with an up-to-date market analysis to assist in determining what your property is currently worth in our market, with like properties in your area, then get the home on the market, with like properties in your area, then get the home on the market. Remember this, if the market is continuing to fall in the area, this market analysis will have to be updated weekly to keep up with the decline.
3. Also, always do your homework. You’ll need to know exactly how much is owned on your property, making sure to include all loans applied to it such as home equity lines of credit, early payoff penalties and interest per diem.
4. When calculating, it is very important to get, at the very least, an estimate of closing cost that could be applied to the sale of your home at a given price. This can be determined by your Realtor as they have access to formulation tables as well as close relationships with area title companies that can assist them. Items to include would be title insurance, taxes (speak to your accountant), title company fees, agent commissions and any and all unpaid fees applied to the property.
5. When all the above is completed, you will know how much is needed to satisfy the loan. As stated above, most foreclosures owe more than what the properties are currently worth. So now that you have done your homework, offers that are submitted to your Realtor can be presented to your lender to consider, short of the balance, yet comparable to the current market.
This could be a long drawn out process but keep in mind, it will be a much better avenue than foreclosure or bankruptcy as it pertains to your future credit. Rely on your Realtor to keep the property updated and to present offers to your lender. You in turn continue to communicate to the Loss Mitigations Department at your lender’s office. They will know that you are not only determined but concerned for a positive outcome to this dilemma.
