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Listing Your Home as a Short Sale

If you are considering putting your home on the market as a Short Sale, chances are you have a lot of questions. We’ll try to cover some of the major points of listing your home here, but remember that a free consultation will help you the most to understand what your options are and how the process works.

In a nutshell, Short Sales are comprised of 3 main stages, Listing and Marketing Your Home, Lender Approval, and Buyer Closing

  1. Listing and Marketing Your Home – In this stage we take care of the listing paperwork, and get prepped for listing. Once it is ready to show, we market the property on the MLS as well as 40+ websites, through our network of agents and buyer leads, and other avenues. Since the lender will not consider a short sale approval until an offer to purchase has been received, we want to keep this timeframe to a minimum, while qualifying the buyer to ensure they understand the process and the time it can take to close. Once we have received a good offer, we collect your financial documentation and prepare to submit the short sale package to your lender(s). This process can take anywhere from a few days to a few weeks, or longer.
  2. Lender Approval – In this stage we (acting on behalf of you, the seller), submit your entire Short Sale package to your lender(s). We continue to follow up on a weekly basis for updates, and occassionally will need to contact you for more information. Your lender will review your paperwork, submit to the investor (the company that actually owns your loan), and will provide a response. The lender typically does their own appraisals during this process to determine value. They will respond to you with a conditional approval, or a denial. Most approval letters outline the terms that the seller must accept, and the seller then must sign the approval letter stating they agree with the terms provided. This process can take 30-120 days, or longer – depending on the lender.
  3. Buyer Closing – At this point the seller has accepted the terms of their lender’s approval, so it is time for the buyer to perform. This stage is where the buyer performs the home inspections and if applicable, completes their financing, including appraisal. This process takes 15-45 days to complete, depending on financing contingencies and the date that is listed on the purchase contract.

A few things to remember when we are listing your home as as short sale:

  • You should never have to come out of pocket with upfront costs to pay negotiators, unless you are having an attorney or CPA consultation
  • You should never do any major improvements to your home to increase it’s value or marketability. Minor cosmetic touch-ups are fine, but only things such as carpet cleaning and touch up paint
  • Your home is listed as-is! Although the buyer will do inspections, they should not be asking for any seller credits or fixes, except in very extreme cases
  • You cannot sell to someone who is related to you, and your lender in most cases will not allow for a rent-back that allows you to continue living there

We understand that for most people selling their home as a short sale, there is a lot of emotion involved. The key thing to remember is to be patient. The process involves many parties, can take a while to complete, and there can be road blocks along the way, however with the right listing agent working for you, most situations can be remedied.
* We can also help you find a rental home to move into, so contact us!