When a home is sold for less than what the homeowner owes the lender, the transaction is called a short sale. Short Sales have permeated our real estate landscape and will be around for the next few years. Instead of reading various blogs from us on the subject, we’re focusing a couple of the Q&A Series on an attorney we know and work with who specializes in short sales, Laurence R. Leff, Esq. He can be reached at 973-992-9207 or via email Leff@lawyer.com .
Click here to read the first set of questions he answered before you read the additional answers below. A future Q&A Series will provide attorney answers to short sale questions from a buyer’s perspective.
If you have a short sale question you want to have answered in this Q&A Series, send it to me at Sold@BevAndBobHomes.com.
Q1: The running joke is that a short sale can really be one of the longest sales ever, some lasting a year or more. Do you see any changes coming that could shorten this process?
A1: Yes, lenders are trying to improve their short sale approval processes. For example, Bank of America is now rolling out process improvements to allow multiple processes to move forward in parallel that used to be done sequentially.
Q2: What should home owners be wary of when engaging short sale teams and/or attorneys who do short sales?
A2: Be wary of anything that sounds too good to be true.
Q3: We always hear about how homeowners have to prepare a package. What’s a package and what’s the most important piece of that package?
A3: The package is the financial and hardship statements required by the seller's lender, along with supporting documentation, which usually consists of the 2 most recent tax returns, bank statements, and pay stubs (or profit and loss statements).
Q4: When a homeowner is looking to hire a REALTOR® to help with a short sale, do they need to look for anything in particular with that agent?
A4: Experience with short sales! The same is true for hiring an attorney. But remember, while the seller hires the REALTOR and the attorney, the broker commissions and attorney fees are usually allowed by the short sale lender so that there is no out-of-pocket expense to the seller.
Q5: Should a homeowner just price their home at what they owe the bank, at what the REALTOR® says is market value, below market value, or 10% higher?
A5: There is no single answer to this question. It is best to seek guidance for your specific sale from a REALTOR with short sale experience selling homes in your area.
NOTE: Answers to these questions are for information purposes only and are not intended to create any type of business or agency relationship by reading them.