Janesville, Wisconsin Real Estate The key to selling your home!

Short Sales


1.  Defined:  A Short Sale occurs when a seller owes more on the mortgages and liens on their property than it's current market value.  In other words, to sell the property in the current market place, the lien holders would have to accept payment in an amount less than what is owed to them.

2.  Disclaimer:  This outline does not constitute legal or tax advice.  Parties should consult their attorneys or tax advisors before entering into a Short Sale.

3.  Seller Issues:   A. Stress - may be behind or cannot make payments

                                   B. May be in Foreclosure

                                   C.  May have more than One lien

                                   D.  May not have enough time to complete a Short Sale

                                   E.  Short Sale - May not be best choice (Consult Attorney)

                                   F.  Seller has no cash for Repairs

                                   G.  Seller gets no proceeds from sale

                                   H.  A Short Sale may take 2-6 months or more

                                   I.  Buyer's may cancel before bank approval

                                   J.  Normally, must be a hardship

                                   K.  Need to provide detailed financial information

                                   L.  Deficiency - How is the Lender going to handle the loss

4.  Buyer Issues:  A.  May be a long time line - Need patience

                                   B.  Bank may or may not approve the Short Sale

                                   C.  Must be pre-approved or have cash

                                   D.  When bank does approve, may have to close quickly

5.  Contents of a Short Sale Package:

                             A.  Authorization Letter

                                    B.  Hardship Letter

                                    C.  Listing Agreement

                                    D.  Financial Worksheet (Income/Expenses)

                                    E.  Last 2 Years Tax Returns

                                    F.  Last 2 months of Bank Statements

                                    G.  Last 2 Pay Stubs

                                    H.  Purchase Contract (Accepted Offer)

                                    I.  Buyer loan approval or proof of funds, if cash

                                   J.  Estimated Hud-1 (Closing Statement)

6.  Estimated Timeline:

                            A.  0-30 Days:  Short Sale Package is submitted

                                                             BPO is Ordered

                                                             Lender assigns a negotiator to file

                                   B.  30-60 Days: Negotiation with Bank

                                                             Secondary Offers

                                   C.  60-90 Days: Receive Short Sale Approvals

                                                              Buyer may need to close in bank allotted time      


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