If you are in the process of doing a short sale or think you have to do one. There are just a few things that you have to do. Now I know that for many people this is a tough decision and even here in the Santa Maria real estate market we are still doing short sales. But for some its one of the best decisions that you can make. The reality is that sometimes you just have to look at things from a business point of view as an investor and take the emotional component out of. The sooner you can look at things from a different perspective the easier it will be to move ahead and not only start over. But you may even find yourself in a better position.
There are just a few things to remember that you have to do when you are doing a short sale. Just follow the steps below.
1) Do not move out if you move out while in the process and before your lender approves your short sale. Many times they will deny you any kind of financial assistance to relocate. Since you moved out you no longer need the assistance. This can actually be thousands of dollars and can vary from loan to loan as well from lender to lender. So there is not a set amount or standard amount. The largest dollar amount our office was able to get for a client was close to $20,000.00. But on the flip side when your agent does get the approval you need to seriously make arrangements to be out in time, before the transaction closes. You can forfeit those funds if not and kill the short sale transaction. But just for the record typically a person receives $3,000.00 to $5,000.00. But then some there are times the bank will no pay anything so keep that in mind as well.
Remember you have not been paying anything for months during the time the short sale has been in the approval process. So when the time does come you should have plenty of money saved up. Just because your not make mortgage payments does not mean you have extra money to spend. You should be saving like your life depended on it. Because in a way it does if you plan on starting over and money does make that a bit easier to do.
2) Income documentation you need to be organized your lender and agent will be asking for this repeatedly. To the point of frustration. Pay stubs and bank statements. Your lender wants to see if based off of your paystubs if it is possible for you to afford those payments lets say if you were to get a home loan. As well as bank statements just how much money do you have in the bank. They will ask for these items in the beginning and near the end and several times during the whole process. But if you prepared and organize you can easily just give it to them without any delays.
3) Most importantly is patience. The short sale process is frustrating for everyone especially your agent. He does not get paid till the transaction closes. He will be make calls upon calls and resending the information over and over again. If you take into account the number of months it takes to close a transaction, hourly income starts to look less and less. So patience is needed because the process does take months we currently at the time of writing this have one transaction that we have had for over a year now. Still sending up dated paystubs and bank statements to the lender only hoping for an approval soon.
4) One last thing you agent is paid by your lender. You should not have to pay your agent anything to do the short sale for you. If your agent is asking for funds upfront or some kind of processing fee this is where you need to cut your ties and look for another agent, pronto.
Good luck out there.