Short Sales How Does The Process Works? Q.B. Homes - Great Success Realty. Saar (Sam) Elazar, Licensed Real Estate Salesperson CDPE Certified Distress Property Expert 140-21 Queens Blvd. (Ground Floor) Jamaica, NY. 11435 Office (347) 470 6050 Mobile (347) 510 1616 Fax (718) 22 88 988 w w w. q b h o m e s. c o m
Short Sales How Does The Process Works? WHAT IS A SHORT SALE? A short sale is a real estate transaction where the lender (the bank) agrees to accept a sale payoff for less than the full amount of the mortgage owed by the homeowner, that payoff amount includes: The seller s closing costs The Realtor s commission. The loss is either completely written off by the lender, resolved through a payment arrangement (known as a promissory note), or settled for a lump sum lesser amount (commonly referred to as a cash contribution) and possibly forgive the remaining balance WHY WOULD A LENDER ACCEPT A SHORT SALE? BANKS DON T WANT TO FORECLOSE ON YOUR REAL ESTATE PROPERTY. Unlike common thoughts by the general public, a foreclosure can cost a lender (the bank) a lot of money: They have to maintain the property, market the property, pay for utilities and property taxes, possibly spend money on closing costs when they sell, pay Broker Fees and have general liability. Most mortgage lenders would rather participate in a Short Sale because they will obtain cash more quickly and release themselves of any future obligations to the property. WE CAN HELP HOME OWNERS throughout New York Area and beyond to avoid foreclosure and walk away from their home without having to pay a penny, and without having their credit ruined by foreclosure or bankruptcy Page 2 of 6
Short Sales: Step-by-Step The majority of the tasks performed throughout the short sale process will be completed by the seller s listing agent or assistant. It is customary for the bank to deal with a qualified real estate agent in a short sale. The diagram above illustrates the short sale timeline. This section of the page will highlight what happens at each stage of the process and what might be expected of the homeowner: 1. Listing agent sends the lender a 3rd-Party Authorization Form, granting the agent and/or designated assistant access to receive information from the bank on the seller's behalf. 2. Offer is received and approved from a pre-qualified buyer and the homeowner prepares a list of documents for the agent or assistant to submit to the bank for review. This will include income tax returns, bank statements, paycheck stubs, and other financial disclosures. 3. Offer, pre-qualification letter, and HUD-1 are sent to the bank by the listing agent or assistant along with the homeowner s financial documents. This is called a short sale package and may also be referred to at the bank as the short sale file. 4. File is assigned to bank negotiator. 5. Bank sends an independent licensed real estate broker to the property to perform a valuation called a "Broker s Price Opinion (BPO)." The BPO is meant to give the bank a general snapshot of the property value and condition. 6. BPO agent sends the valuation to the bank. 7. Short sale package and BPO are reviewed by the bank and their investor. 8. Bank and/or Investor decide to either approve or reject the homeowner and the listing agent or assistant request for a short sale. 9. In the case of an approval, a written acceptance is sent to the homeowner for review and the buyer initiates their mortgage-loan approval process. 10. Buyer performs inspections and close on the property. Page 3 of 6
Time Line of a Short Sale Initiate Submit Offer & Docs Obtain Home Varification Analyze Offer Investor Approvals Closing The Short Sale Timeline diagram is a general illustration of the stages involved in completing a short sale and the estimated number of days each stage may takes. Short sale timelines differ between banks, and are affected by the number of liens and the balances due, and may not follow the process illustrated on the diagram. While few banks will ever process their short sales in the same amount of time as other banks, most will still adhere to the same stages illustrated in the diagram with few exceptions or differences >>> Short Sale Process Begins Initiate Colect Needed Documents from Seller Week 1 Week 2 Week 3-4 45 60 75 100 120 Get Autorization with Lender Submit Short Sale Package to Lender Short Sale Assigned to Bank Negotiator Broker Price Openion (BPO) Ordered & Cpmleted BPO Analyzed by Bank Approval Obtain from Bank Mortgage Reduction Negotiations Short Sale Approval & Closing Page 4 of 6
Many people do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes. Short Sale is a negotiation process that can go back an forth few times and have many variables that can change at any time in any of the parties involved. The foreclosing party (the lender) can stall a foreclosure up to the final day of the process (If a Good Reason is Given To Them). Today, many lenders will stall a foreclosure with as little as a phone call from us explaining that you are trying to sell and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete in full. CALL US TODAY (347) 470-6050 TIME IS OF THE ESSENCE. WE GUARANTEE To Stop Foreclosure Process. WE GUARANTEE To Stop The Lenders From Calling You. We Will Help You Save Your Credit And Your Reputation As Well. Our Service Is 100% FREE! - You Will Pay Us Nothing! You Will No Longer Have To Pay Anything Or Any Fees Ever, G U AR A N T E E D! Page 5 of 6
Did you know? For Most People the Best Way to Stop a Foreclosure is though a SHORT SALE! Selling a home via a short sale is a legitimate method for stopping the foreclosure process, allowing the homeowner to get on with life and without the ding to the credit record. Lenders are not in the business of owning real estate. They get upset when they have too many properties on their REO (real estate-owned) books instead of out in the market making it a profit through monthly mortgage payments. Plus, the foreclosure process is not free. Every house they foreclose on costs them thousands of dollars. So, in some instances, agreeing to a short sale is in the lender s best interest. It is up to the homeowner (with our expert help) to convince the lender that this is one of those circumstances where it s better to fish and cut bait. It s a matter of numbers and economics. The homeowner needs to demonstrate to the lender hard numbers that will lead the lender to conclude that selling via a short sale is going to benefit them more than the amount they would garner from foreclosing on the property and then selling it as an REO. MANY LENDERS OFFER GREAT INCENTIVES, YOU MAY BE ELIGIBLE FOR UP TO $30,000 SHORT SALE INCENTIVES FROM THE BANK FOR RELOCATION AND OTHER EXPENSES! WH AT IS THE FIRST STE P? For homeowners looking to stop foreclosure, the first step should be to contact us as soon as possible, so we can contact the lender right away to STOP THE CLOCK and negotiate a Short Sale. CALL US TODAY (347) 470-6050 TIME IS OF THE ESSENCE. 2012 Q.B. Homes LLC C/O Great Success Realty All Rights Reserved. The above brokerage assumes no responsibility nor guarantees the accuracy of this information and is not engaged in the practice of law nor gives legal advice. It is strongly recommended that you seek appropriate professional counsel regarding your rights as a homeowner. As we offer you a free service we will be paid by the lender at the time of closing in your behalf any such payment will show on the HUD-1 Form. IMPORTANT GOVERNMENT DISCLOSURE: You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will not have to pay us for our services. The above brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. Page 6 of 6