From Yakima, WA, in the Buying Foreclosures section of Home Buying Advice, within Zillow Advice, misssassy1146 asks:
“How do I short sale my house?”
Having been through a short sale myself, my opinions are very biased. That being said, I’ll share my personal experience, which I found to be very similar to the many short sale blog posts I encountered as I searched for help myself.
How to start the process of short selling your house:
1.) List your home for sale with an agent. Do not do a short sale by owner, as there is no money to be saved. Start gathering paperwork you’ll need for the short sale. Call the bank and ask them for a short sale packet. They’ll send you/tell you what you need to submit with the offer (see #4).
2.) Make sure the agent you choose has experience doing short sales. It doesn’t have to be a lot, but at least two preferably. The basic concept is the same, but each bank has its own rules.
3.) How should you price it? This is up for discussion. One would think an owner should show a valiant effort in selling their home for a price that would cover the loan balance. You can do this my starting at that price, and lowering the price every week to show you made an effort. This is what I did. In hindsight, the bank never asked for, or looked at the MLS history, so I think this was not really necessary. We could have posted it at what the current market said it was worth. In the home description make sure to say, “Short Sale, bring all offers!” This tells buyers know they just have to submit an offer and see what happens.
4.) You get an offer, now what? You or your agent needs to send the offer along with any requested paperwork from the bank in one package. I say you or your agent because a short sale is an emotional transaction. Some people might want more control, while some want someone else to take over. Regarding the short sale package, do not send this in piece meal. Keep fax confirmation sheets, emails if electronic, or mail via certified mail. The person who sends this should call as soon as possible to verify the bank has received it. Every time you or your agent call, write down who you spoke with, when you spoke with them, exactly what they said, and what they are/were wearing. Keep a log every time the bank is called. They should be called every week for an update. This seems extreme, but in my own experience they apparently “lost the paperwork”, or told me I was missing an item at least three times. This is important to be on top of, because if your “file” is missing one item, or one T is not crossed, your process starts all over. It was 5 months before my bank even told me if the offer was accepted or not.
5.) The bank says my offer is accepted… Now what? Read the fine print of what they offer you. If you have a first and second mortgage, watch for, ” We reserve the right to demand the amount of the second mortgage in full.”
There are many options for help with a short sale. For example, you can hire a lawyer for the price of title insurance to follow up with the bank for you. You can trust your agent to handle it, or you can make all the calls yourself.
Do you have an experience with a short sale? Please contribute to this post or the short sale thread!