Short Sale Resources For Seller

Listing the Home

• Meet the seller and explain the entire short sale process
• Explain an unsecured promissory note/deficiency judgment to the seller
• Go over all other options the seller has besides a short sale
• Have seller fill out all the paperwork including disclosures
• Seller needs to leave appliances (inspections)
• Have the seller live in the property while listed, if they do move out have them keep the water and the electric turned on. Also, they need to maintain yard/pool (they can get fined by the city $500 per day if not maintained.)
• If the seller is not a US citizen there are specific guidelines to follow (talk to your title co. for details)
• Make sure you collect all paperwork from the seller before you list the home. Provide seller with all paperwork reviewed.
• If the home is a condo have the seller get the FHA condo questionnaire filled out by the condo association.
• List home (make sure the price isn’t too low or too high) ensure that you state in MLS that this is a short sale and is contingent upon lenders final approval.
• Call lender ask for a loss mitigation packet, and get all pay offs including any fees.
• Record everything every time you talk to the lender, name, time, date etc.
• Fax authorization letter to the lender (if 2 lenders fax both) include attorney and/or title company who will be handling the closing in the list of authorized parties.
• Review Hardship Letter.
• Call HOA/Condo and get the pay off including any late charges and attorney fees.
• Communicate with the sellers on the 15th & 30th of every month.
• Make price adjustments on the 15th and 30th.

Accepting an Offer:

• Only Accept 1 offer (signed contract) at a time and Make sure price is reasonable.
• Communicate with the buyer’s agent before submitting the offer:
• $5,000 into escrow the day the seller signs
• 60 days minimum to complete the short sale + 30 days to close
• 2 addendums to fill out
• Pre-approval letter NOT a pre-qualification letter ( I have the guidelines expected)
• Sample: This information is not intended to be legal or accounting advice. For additional information seek the advice of an attorney and/or CPA. We assume neither responsibilities nor guarantees to the accuracy of these forms. It is strong recommended that agents investigate the specific items necessary to their situation.
• Cash – they need to show proof of funds
• The lender will either accept, counter, or deny offer
• “As Is” FAR/BAR contract
• Communication with the buyer’s agent is VERY important; let them know you will update them weekly to your progress!
• Title Company needs to complete a preliminary HUD:
• I add $500 for water (minimum)
• $5,000 for the second
• Make sure your numbers are as accurate as possible this is also VERY important
• Closing date a minimum of 90 days out from contract effective date. This impacts pro-rations and payoffs. “Pad” payoff and any other monies owed since we do not know the exact closing date.
• Review Offer/HUD
• Fax the following:
  • Seller short sale packet
  • Listing agreement
  • Offer
  • CMA
  • Preliminary HUD
  • Letter to lender
  • MLS print out
  • Neighborhood summary
  • CCS (centralized showing service) print out
  • Listing history – price reductions
  • Comparables
  • Damage repair form

NOTE:

• Make sure you have your contact info on the bottom of every page and submit the entire package at once (usually 75-100 pages)
• After submitting package call 2 days later to make sure they received the packet and confirm how many pages they received. Call every 2 days until they receive the entire packet, you may have to send the packet 3 or 4 times until they get it.
• If you have 2 loans then you need to submit 2 complete packets (even if it’s the same lender). Also, if it’s a HELOC (home equity line of credit) you may need to put at least $5,000 in the HUD for that lender or more.
• Call 1-2 times a week until BPO has been ordered and a loss mitigator has been assigned.
• Sample: This information is not intended to be legal or accounting advice. For additional information seek the advice of an attorney and/or CPA. We assume neither responsibilities nor guarantees to the accuracy of these forms. It is strong recommended that agents investigate the specific items necessary to their situation.
• 5-6 weeks later and once the BPO is back call every day until you get an answer.
• BPO/Appraisal – meet them at home with comps you have pulled.
• Communicate with the title company.
• Communicate with HOA/Condo association.
• Communicate with lender make sure they are aware once the offer is accepted they have a maximum of 30 days to close.
• Review time lines on contract.
• Once offer is close to acceptance order a lien search (pencil search done previously).
• HOA/Condo approval for the buyer.
• Have your title company order estoppel letter from HOA/Condo and municipal lien search to ensure that there are not any open permits, violations, etc.
• You will have to deal with any lien issues (hopefully you about previously).
• Review final HUD.
• Close the Short Sale.