This is a guest blog post from Michelle Schaefferkoetter at Stewart Title in St. Petersburg, Fl

There are so many misconceptions about selling your home as a short sale these days, so I reached out to Michelle at Stewart Title to give our readers an insight on how the Short Sale process works and what you should be prepared for.

3 things that cause issues with short sales are:

1. The Sellers and Buyers are not fully prepared for the time frame involved, so be realistic and prepared to wait 60-90 days before you get a response from the seller’s bank. If the loan was a government loan, such as an FHA loan, there will generally be more complications because the government will have to be involved along with the lender.
2. A second mortgage can be a problem with a short sale. The second lender may have no interest in agreeing to the terms set between the primary lender and the seller, this can pose a real problem. The home cannot be sold without dealing with the second mortgage.
3. Contracts, addendums and financial packages may be incomplete or expired, and most likely be rejected. This can cause the bank to close out the file and restart the entire short sale process. We cannot stress enough the importance of having all of the documentation required by the Lender to them as soon as possible.

Common short sale questions:

Will I owe money if I sell as a short sale?

Every item on the Seller’s side of the HUD-1 statement will be scrutinized by the Short Sale Lender. Except in the case of a HAFA Short Sale, line 603 of the HUD-1 should always net to zero for the Seller. In most cases this means that the Seller does not bring any money to closing and does not take any money away from closing. On a rare occasion the Lender may require the Seller sign a promissory note to them for an amount to be paid back.

What if there is a lien on the home?

It is very likely that Sellers seeking a Short Sale may have liens and judgments against them that could affect closing the property, so it is important for the Title Company who handles your short sale to run a title search right away. This will allow more time for the Seller or their Attorney to negotiate any judgments, liens or encumbrances.

What role does a title company have in the Short Sale Process?

Short Sales require frequent communication between the Realtor, Title Company and Lender to make sure that closing documents satisfy all the requirements of the Short Sale Lender. Due to the large amount of short sales that the lender is already processing the escrow agent must be persistent in keeping in contact with the lender.

You also want to make sure a title company has Short Sale Certified Staff ready to process and close your files. What does this mean for you? This means they have invested time and money to become short sale specialists.

This is a very unique market and one that will be here for a while. The best thing you can do when it comes time to close is to choose wisely when it comes to hiring a title company. Unfortunately, an inexperienced escrow officer could cost you time, money and put your entire transaction at risk. Experience is crucial in every industry.

*Information courtesy of Stewart Title and America’s Home Rescue.

See Also:

If you are considering a short sale, or if you want to know if you qualify for a short sale, you may want to read 4 Questions To Ask When Contemplating a Short Sale and Tips for Selling Your Home as A Short Sale-Tampa, Fl

Email us for more information on selling your home as a short sale. We have Certified Short Sale Specialist Realtors  that will help you save your home from foreclosure.

Selling your home as a short sale in the Tampa Real Estate Market is no easy task. Clearly, negotiating a successful short sale is even more difficult. It will require countless hours of phone time and inevitable frustration. It is highly recommended that you enlist the services of a professional to perform negotiations on your behalf.

As a Realtor with Prudential Tropical Realty here in Tampa Bay, I’m excited to announce that our real estate agency is working with a top Real Estate Law Firm to handle the short sale and foreclosure process for our clients.

If you are thinking about selling your home as a short sale, and would like representation please contact us.

Here’s the article published in the Tampa Bay Business Journal

Prudential Tropical Realty turns to Yesner & Boss for legal help

Here’s the latest update on Bank of America’s short sale incentive program.  Thanks to Mark Puente with the St. Pete Times, we now have more clarification on how the program works, deadlines, payout amounts and qualification process.

The biggest disappointment is that homes already under contract are not eligible for the cash assistance.

It was only a matter of time before other banks started offering incentives to homeowners to sell their home as a short sale.  Chase Bank started the trend and now Bank of America (BOA) has started offering Florida homeowners who are underwater anywhere between $5,000-$20,000.00.  Even better HAFA is offering $3,000 towards moving expenses.  

Bank of America encourages distressed homeowners to explore a short sale as a viable option for avoiding foreclosure. To that end, for a limited time we are offering enhanced relocation assistance to help motivate homeowners to engage with us on a pre-offer short sale. An additional benefit for these pre-offer programs – such as the Home Affordable Foreclosure Alternatives (HAFA) and Bank of America’s proprietary program - is that deficiency may be waived for the homeowner.

Eligibility:

• Homeowners with property in Florida
• Short sales initiated without an offer between September 26 and November 30
• The customer will have to be eligible for one of the without offer programs such as the HAFA program or our proprietary program (specific investor participation and eligibility criteria do apply to these programs)
• Successful closing of the eligible short sale by August 31, 2012
• Minimum relocation assistance is $5,000 and maximum is $20,000, with the specific amount calculated based on the unpaid principal balance
  
  

  What’s the next step? You must put your home on the market with a Realtor.  To find out more about the Short Sale Relocation Assistance program, you may contact one our our Short Sale Experts at Prudential Tropical Realty.  We cover Tampa, St. Petersburg and Clearwater areas.

  See also: BOA Deadline For Short Sale Incentive Approaching Soon

  Prudential Tropical Realty is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.

Tips to selling your home as a short sale in the Tampa Bay Area:

What is a short sale? In basic terms, a short sale in real estate is selling your home for less than what you owe the mortgage company. This is often defined by the term being ‘Underwater’

In order to qualify, you’ll need to answer the following questions:

1. Are you in a financial hardship situation? For instance, have you gotten a divorce or lost your job and had a significant loss of income?
2. If so, and you can provide financial documentation justifying that you can no longer pay the mortgage, you may qualify. If you are self-employed you’ll have to provide a profit and loss statement to the bank as well.
3. Are you underwater? In today’s real estate market, can you sell the house for what you owe the bank? If you aren’t sure, just ask a Realtor who handles short sales to run comparable sales for the prior 6 months; also known as a Comparable Market Analysis (CMA).
4. Have you stopped paying your mortgage?

Who pays Realtor commissions?

The bank will pay Realtor’s commissions, back taxes, delinquent HOA fees and closing costs that would be associated with a typical transaction.

Underwater Photo Courtesy of Steven Fage engineur.com

How long will it take before I can buy another house after doing a short sale?

Even if your credit score is within lending guidelines, as it stands now, you won’t be qualified to purchase another home for 2-3 years.

Get Advice From A Listing Agent Who Specializes in Short Sales Before You Start The Process.

You may also want to read:
The INSIDE SCOOP on Short Sales-Tampa Bay Statistics, How a Short Sale Works and more..

What to expect when listing a short sale

Prudential Tropical Realty is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.