First of all many people do not know exactly what a short sale is. I will answer that first, then I will give you a few tips on how to improve your time line.What Is a Short Sale?A Short Sale occurs when the value of the home being sold is less than the amount owed on the outstanding loan(s) and your lender agrees to accept a lower price on your current home than the current mortgage balance. The lender may have certain requirements to meet and you may be required to have a qualified buyer ready to purchase the home and be willing to deal with extended deadlines and additional demands made by your lender..For example, in 2005 you paid $350,000 for your home and took out a loan for $320,000, but today the home is worth only $275,000. If you must sell the home today the home is only worth what the market is willing to pay. The amount to pay off the loan is still approximately $320,000 minus $275,000 which puts you $45,000 under the payoff amount, not counting any small amount of equity gained during the five years.Of course, you could wait for the market to improve before you sell your home. Some experts have been estimating the recovery to take 10-20 years to possibly get back to the values of 2005. However, if you must sell your home you do have some options. You could pay the difference to the lender in cash, or you could let the home go into foreclosure. Another option is to pursue a Short Sale.Ok, now you are pursuing a short sale. I recently helped a friend out with his short sale department at his Title Company . What I learned was that banks are over whelmed with the volume they have on the books. In order to keep the process going smoothly, it is very important that the real estate agent, Title Company, and the home owner keep the entire documents and forms currant. Even when not asked, always send in any new monthly bank statements or earning statements. This includes investments! If any forms are not up-to-date then the process will be slowed down or come to a stop. Another thing, do not leave anything out, fill in all the blanks on all the forms. Provide all that you can and all that the lender is requesting. Their request for information will not go away, it will only prolong the entire process if they do not receive it. If you need help with the forms ask for help.If you are a buyer waiting for the process to be completed, you are at the mercy of the listing agent and everyone else that is involved with the process to do all the above. The first thing I would ask the real estate agent, is how far along is the process? Have a set time line for all parties to have the process completed and ready for closing. But, don't be in too big of a hurry. Buyers can get some pretty good deals this way! Waiting can pay off with big savings in the long run.
Before you even go to see any homes, do your homework! A lot of first time home buyers just jump into a car to look at homes. They spent countless hours of their time and the Realtors time just driving around looking at home after home.The first thing is to determine how much you can afford. Besides adding up all your monthly personal expenses, allow some extra money for unexpected bills that could come up in the future, such as a new car payment. Then find a good lender you can count on and get yourself pre-qualified. A good agent should not even be showing homes with out their buyers already being pre-qualified. Part of a Realtors responsibility to the seller is to show their home to only the people who are in a position to buy.Many sellers do not like the idea of strangers in their home to begin with! Would you like just anyone to come into your home?
Zillow is a great source for getting many of your questions answered, but before selling or buying a home, ask your Agent to provide you with a Comparable Market Analysis - usually free of charge. This extremely useful Analysis will compare your home to other homes in the same area to help you determine the value of your home.However, there are many variables to consider such as the condition or improvements made to the home. For example, just because your home has 3 bedrooms like the one down the street does not mean both homes are equal.Another thing to consider is price - many people think their home is worth more no matter what!!! If it is not priced right, you can waste valuable time and effort. Most buyers act on a new listing within the first 2 weeks it becomes available for sale. After that, you lose a lot of buyers that will not go back for a second look.