Every short sale has its own unique challenges but to try and simply the complicated, here are the six steps to a short sale:

1. Initiate the Short Sale -  Every lender is different as some lenders will want the homeowner to call and verbally initiate it whereas some lenders will not initiate the beginnings of a short sale until an offer has been submitted.
2.  Collecting Homeowner’s Financials – Gathering a bunch of financial documentation isn’t always easy, especially if you are packing up the house or have already moved.  What banks are looking for are two years of taxes, 60 days of bank statements, last couple pay stubs, all other financial statements (investments accounts, retirement accounts, etc).  You will also need to provide a hardship letter stating why you are seeking a short sale.  Hardships can include:  job loss, chronic illness or injury, reduction in income, increase in interest rate, divorce, death.
3. Submitting the Offer – Most of my short sale listings are taken immediately after first contact so upon listing the property for sale, I immediately introduce the homeowner to my short sale coordinator to obtain the above stated financial documents ASAP.  I try to set the goal to have all documentation in within the first 48 hours of listing the property.  Sometimes an offer comes in before we have all our financials uploaded and sometimes an offer comes in after everything has been submitted and properly uploaded into the system.
4. Valuations Process – This is the very slow and quiet time, typically the time where uneducated buyers and buyer’s agents with unrealistic views of the process walk away.  The valuations process can take 30-60 days with little or no contact from the bank.  During this time the lender is ordering appraisals and/or BPOs (Broker Price Opinions) and evaluating the current state of market, local comps and getting a very specific idea of what the property is worth at the present time.
5. Offer Review and Approval – this is what I consider “Rock n’ Roll time”.  After periods of long silence from the lender a flurry of activity ensues.  Lenders ask for updated seller financials and updated Buyer’s preapproval letter.  This is typically the second tier negotiator who is getting the file complete to present to the investor of the loan for final short sale approval.
6. Closing – Once final short sale approval is granted, there is typically a 30 day window to close the sale.  This is the period where the buyer will inspect the property, lock interest rates, order appraisal and generally get the loan ball rolling.  A good short sale agent (like myself) will begin all contingencies (appraisal, financing, inspection, etc) at time of final short sale approval.  In essence, the last 30 days are what typically happens in a normal resale closing.

For more information on Short Selling your home in Georgia, please visit our Short Sale FAQs for Buying Short Sales and Selling Short Sales.  There is also a lot of information in previous Short Sale Blogs.  The Walker Derby Team specializes in short sales throughout the following areas in Georgia:  Acworth, Atlanta, Austell, Canton, Douglasville, Hiram, Kennesaw, Lithia Springs, Mableton, Marietta, Powder Springs, Roswell, Sandy Springs, Villa Rica, Vinings and Woodstock.

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This entry was posted on Monday, April 19th, 2010 at 6:47 pm and is filed under Buyers, Sellers, Short Sales. You can follow any responses to this entry through the RSS 2.0 feed.