You now have missed more than 3 payments on your mortgage and your mortgage lender is preparing the paperwork for your foreclosure to be filed – (otherwise known as a lis pendens). You now have a choice, either make the payments and catch up, or short sell a home or commence the Deed-in-Lieu of foreclosure process.
Has anyone been in a situation like this? If you have and you don’t know where to begin, then this is where we start to find out how to short sell a home so as to avoid foreclosure from happening.
So, where do we begin? Well, first, know where you stand. All mortgage lenders want is payment for the mortgage on the home. Unfortunately, many folks have found themselves in financial difficulties that they may not have otherwise encountered due to the economy. Some have lost jobs, some have had medical conditions, death in the family or even divorce which has set them back and they can no longer afford their home. Those borrowers need to know how to short sell a home so as to avoid foreclosure from occurring.
Talking to your mortgage lender is imperative and the lines of communication must remain open. If you are able to catch up with your mortgage payments, great! For many that cannot, then they may have no choice but to either short sell a home or turn in the keys to their home to the short sale mortgage lender via a deed-in-lieu of foreclosure if that is the only option that remains.
Right, so that said, if a short sale is the option, then a knowledgeable Palm Beach short sale Agent is of utmost importance to explain how to short sell a home which is what will benefit the seller/borrower. A Palm Beach short sale Agent who is familiar with Broker Price Opinions – also known as short sale BPO valuations, and who perform these short sale BPO reports for a short sale mortgage lender on a regular basis are positioned to know what the short sale mortgage lender is looking for value-wise for the property that is being put on the market as a short sale. Always ask your Palm Beach short sale Agent if they perform these short sale BPO reports and with what consistency. Also ask your Palm Beach short sale Agent if they are certified to do short sale BPO valuations – the National Association of Broker Price Opinion Professionals certify Real Estate agents to do short sale BPO valuations and issue a C-Reps certification – these are the real estate agents best positioned to explain how to short sell a home in your area.
Pricing a home for short sale is vitally important so that the seller does not waste time waiting for an offer to be made and for the short sale process to begin with the short sale mortgage lender or servicer. Remember, the right hand does not always know what the left hand is doing and there are occasions that a short sale is in process and the property subsequently is foreclosed on because of lack of communication as well as the inability to move the paperwork and the short sale process forward in a timely manner. If a borrower is to successfully short sell a home, time is always of the essence even if the short sale mortgage lender says “we have time.”
Borrowers who are going through the short sale process must provide the short sale mortgage lender with supporting documentation some of which can only be provided by the licensed Palm Beach short sale Agent. For example, the Palm Beach short sale Agent is required to submit comparable sales of like kind to the subject property that is on the market as a short sale as supporting documentation to the contract for sale being submitted to the short sale mortgage lender. A Palm Beach short sale Agent familiar with the short sale process would know that there are certain guidelines that a short sale mortgage lender is looking for when pulling those comparable properties such as square footage differences, amenities, style, age, etc. This is the role of the professional Palm Beach short sale Agent who has access to this information via public records and the Multiple listing Service or MLS as it is otherwise known.
Borrowers have also to provide the following documentation checklist here in order to complete a short sell of a home:
Once all the above information is submitted, the next step in how to short sell a home is to advise the Real Estate Attorney who specializes in the short sale process to commence negotiations on the Seller’s behalf, then it will take the mortgage lender about 7-10 days to open and review all documentation in the file and assign a short sale negotiator to the file. Once that is completed and a short sale negotiator is assigned, then the short sale process is in full swing. The short sale negotiator will review the file, request any additional information that may be missing or need clarification on items.
The Broker Price Opinion also known as a short sale BPO valuation will be ordered. The short sale BPO valuation will be performed by a 3rd party Palm Beach short sale Agent who will give their Broker Price Opinion of the value of the home that is going through the short sale process. This is why having a short sale agent who is proficient in the short sale BPO valuation process and is certified to do short sale BPO valuations is so important. Those short sale agents will know what comparables the short sale Agent completing the short sale BPO valuation will be looking at. The short sale BPO valuation process takes a few days to complete and then it is sent back to the short sale Negotiator at the Short sale mortgage lender’s office and from there it will be reviewed along with the purchase contract for the subject home.
If the short sale BPO valuation is in line with the short sale lender guidelines then the lender generally approves the short sale process on the property and it moves to the closing table. If the short sale BPO valuation comes in outside the guidelines, then the short sale mortgage lender will counter the purchase offer and request that the buyer adjust their initial offer. Sometimes, this happens and when the buyer applies for their financing, the appraisal comes in lower than the purchase price. The Buyer’s real estate Agent will then have the appraisal sent to the Seller’s short sale mortgage lender for a new short sale approval. Once the short sale approval is finalized, the short sale process comes towards an end and to a closing table.