The Basics of a Short Sale Banks grant short sales for 2 reasons:
A few examples of a hardship are:
The seller will need to prepare a financial package for submission to the short sale bank. Each bank has its own guidelines but -- with the exception of Wachovia, which is the best short sale bank in the world -- the basic procedure is similar from bank to bank.
The seller's short sale package will most likely consist of:
Before a buyer writes a short sale offer, a buyer should ask his or her agent for a list of comparable sales. Banks are not in the business of giving away a home at rock-bottom pricing. The bank will want to receive somewhat close to market value. The short sale price may have little bearing on market value and may, in fact, be priced below the comparable sales to encourage multiple offers. After the seller accepts the offer, the listing agent will send the following items to the bank:
If the package is incomplete, the short sale process will be delayed. In this event, the bank might even shred the package. The Short Sale Process at the Bank Buyers may wait a very long time to get a response from the bank. It is imperative for the listing agent to regularly call the bank and keep careful notes of the short sale process. Buyers may get so tired of waiting for short sale approval that they may feel the need to threaten to cancel if they don't get an answer within a specified time period. That type of attitude is self-defeating and will not speed up the short sale process. If buyers are the type with little patience, perhaps a short sale is not for them.
Following is a typical short sale process at the bank:
The buyer cancels. Some short sales get approval in 6 to 8 weeks. Others take 90 to 120 days, on average. Generally the listing agent has some idea of when the file is sent for final review. At that point, buyers may want to start the loan process so they've got a head start in case the bank gives 2 weeks to close.