Last month, I outlined the reasons why you should get back on the short sales bandwagon if you’ve fallen off. In the current market, more and more lenders are coming around to the realization that short sales are a favorable option after all and, therefore, are processing and closing short sales at a much faster pace.
That said, there are critical steps that must be taken throughout the short sale process.
First and foremost, make sure the home seller is truly eligible for a short sale. A credible, documented financial hardship resulting from a loss of employment, divorce, major medical crisis, death, etc., must exist. This financial hardship needs to be proven with proper documentation as well as detailed financial statements, paystubs, bank statements and tax returns.
To properly identify and qualify a potential short sale client, conduct a thorough interview right up front—and be sure to leave no stone unturned. This will prevent you from futilely pursuing a short sale with the lender. I use the following Short Sale Seller Questionnaire with my clients:
1. Is your property currently on the market? Is it listed with an agent?
2. Is this your primary residence?
3. When was the property purchased?
4. What was the original purchase price?
5. Who holds the mortgage?
6. What kind of loan do you have?
7. Do you have any other liens against your property?
8. Who is on the title (or deed) for the property?
9. Who is on the mortgage?
10. Do you have mortgage insurance?
11. Are you current with your payments? If not, how far in arrears are you?
12. How much do you owe?
13. Why do you need/want to sell?
14. What caused you or will be causing you to miss your mortgage payment obligation?
15. Do you have funds in accounts that could be used to satisfy the deficiency?
16. Are you currently living in the property? If not, is the property being maintained?
17. How soon do you need to move?
18. Are you up to date on your condo or HOA payments (where applicable)?
19. Do you owe any back taxes?
20. Are you considering filing for bankruptcy protection?
21. Are you currently pursuing a loan modification with your lender?
22. Who is occupying the property?
23. Do you hold or are you subject to any type of security clearance related to your job?
24. What are your plans after you sell?
25. Are you looking to receive any money from the sale of your home?
26. How much income are you currently making from all sources?
27. Do you anticipate any income change in the not-too-distant future?
28. Do you have a pen and a piece of paper to make a couple of notes?
Emphasize that inaccurate or missing information will potentially delay or completely thwart the short sale process. Next month, we’ll take a close look at working with lenders to secure a short sale.
George “Gee” Dunsten, president of Gee Dunsten Seminars, Inc., has been a real estate agent and broker/owner for almost 40 years. Dunsten has been a senior instructor with the Council of Residential Specialists for more than 20 years. To reach Gee, please email, firstname.lastname@example.org. For an extended version of this article, please visit www.rismedia.com.