What is a SHORT SALE? 

In these very unstable times of high unemployment, plummeting real estate values, and a tight lending market, often times a homeowner comes to the realization that they can no longer afford the existing mortgage, and is unable to refinance into a new affordable loan.

It is very likely that much or all of your equity has vanished and you may even be upside down (loan balance higher than value of home). First, contact your lender let them know about your hardship, and inquire about the possibility of a loan modification, even if you are several months behind.

If you have experienced a permanent loss of income or unemployment and a loan modification is not an option, loan servicers will recommend selling your property "short", or less than what is owed on the loan(s). Banks would prefer you perform a short sale rather than walking away and getting foreclosed on. When a home is foreclosed on, everyone loses, homeowner, bank, neighborhood, local economy, and more. The short sale process is not the answer for everyone, but it is a tool that could take some pressure off of your current situation. A successfully presented short sale offer to your bank will likely provide you some extra time in your home and delay or stop legal action or eviction.

A short sale may not be your first choice, but it might be the right choice. Review my list below and call me with any questions you may have with no cost or obligation to you.

Short Sale Checklist

	Review your existing loan documents for type(s) of Loan you have. Purchase Money Loan (Actual Loan used to purchase) or Non Purchase Money Loan (Refinanced loans, Cash out 2nds, HELOC, and others), call me should you have questions.
	Get tax advice from your CPA or other Tax Advisor. Will you be liable for the shortfall  (difference between amount owed and amount  bank received from closing sale) by a 1099, or possible deficiency judgment?  Depending on loan type you might.
	Obtain estimate of value from real estate broker. (contact me, no charge, I will email).
	List property for sale at or 5% below fair market value.
	Start gathering documents required by bank, items in which you will need to prove hardship case with bank.  Here is an example from Chase Bank.

1. Hardship Letter, reason why mortgage is in default.

2. Copy of First Lien Holder borrower statement.

3. Borrower Authorization Form.

4. Income documentation - Wage Earners - 2 months bank statements and pay stubs, most recent years tax return. Self   Employed - 4 months business bank statements, P&L and most recent 2 years tax returns.

5. Asset statement including 401K, IRA, or other

	By now you will have received an acceptable offer that is close or exceeds existing market conditions. Once this is received by the bank, typically the foreclosure process will be paused while review and negotiation of your offer is performed. This should halt the foreclosure action providing you some time.
	Your agent will then complete the short sale package such documents as required by bank:  Realtor contact information, Preliminary HUD1 Estimate, Fully executed Purchase Agreement, Buyer pre approval, proof of funds necessary to close escrow, and copy of Earnest money deposit check.
	Escrow Closing time frames are getting better. 6 to 9 months used to be the norm, now we are seeing 2 to 4 months.
	Things to consider...as a seller of a short sale property, you will not receive any proceeds or funds at close of escrow. A short sale will reflect negatively on your credit report, however, it may be viewed not as impactful as a foreclosure.  Typically, once a short sale package is submitted to your lender, the foreclosure action should be paused. This will give the bank time to compare benefit of the offer tendered with a foreclosure option, and as a by product will allow you some extra time in your home. .
	In closing, I understand that this can be a most stressful and confusing time. Rest assured, I am here to help. Upon listing your home with me, I will be contacting the bank(s) on your behalf, not someone else in the office. I will be providing them all that they need to facilitate your short sale. You will not be relied upon to try to convince your bank to sell short, that is what I am here for! Let me help you...call me now.... 951-440-8212, or leave message 24 hr message center 949-734-0774.