What is the process for a short sale approval?

What is the process for a short sale approval?

Approved Short Sale

  1. The selling agent lists the short sale.
  2. The seller delivers the lender’s required documents to the agent.
  3. The buyer submits an offer subject to lender approval.
  4. The seller signs the buyer’s offer.
  5. The listing agent sends the seller’s package and the accepted offer to the short sale bank.

How to protect yourself during a pre foreclosure short sale?

A pre-foreclosure sale, also known as a short sale, is a popular way to avoid foreclosure when your home is worth less than the mortgage owed. You typically must hire a real estate agent to market the house and use escrow and title services to protect your interests and the buyer’s.

What’s the process for buying a short sale?

With a short sale, there’s typically a certain process that both the bank and the seller go through. If you want to buy a short sale, try to write an offer that’s as close to the amount owed as possible. The process can be frustrating—agents may need to reassure the buyer and seller that patience is necessary.

What should be included in a short sale package?

A seller’s short sale package will most likely consist of: A letter of authorization for your agent to speak with the bank. A preliminary closing statement. A completed financial statement or request for mortgage assistance (RMA). A hardship letter from the seller. Tax returns for the previous two years.

Is it bad to short sell your house?

The short sale process has become common practice for homeowners in less than perfect financial standing, and for good reason: it’s indicative of a borrower’s impending inability to pay down their mortgage. However, contrary to popular belief, short sales are anything but bad; they are simply associated with an unfortunate situation.

How does a short sale work in a foreclosure?

A short sale is a chance for a lender to receive more than it would have in a foreclosure—but they are not going to want to release any mortgage obligations at rock-bottom prices, either. This is the typical short sale process from the bank’s end of things, once they receive the seller’s package: They acknowledge receipt of the file.

When does a lender approve a short sale?

When a lender approves a short sale, it’s agreeing to sell the property for less than the outstanding mortgage balance against it. There’s something in this for the lender when foreclosure seems inevitable.

What are the steps in the short sale process?

The short sale process for sellers can be broken down into five simple steps: Identify the current situation. Demonstrate provable financial hardship. Enlist the services of a qualified agent. Gather the appropriate documents.

Can a mortgage holder take a loss on a short sale?

A short sale can only happen when all lien holders on the property agree to the short sale. Lenders holding second mortgages on the property (such as home equity lines of credit or piggyback loans) are also taking a loss on the sale.