Patricia Paul Properties

Patricia Paul Properties

Commentary on Tucson Area Real Estate, Home Ownership, Rental Homes, and Life around the Tucson Community

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     For the last few years I have been working on short sales with both buyers and sellers.   Short sales occur when the proceeds from the sale of a house are less than what is owed on it.  When this happens, the bank must go through a process and ultimately approve the sale before it can occur.   This can often be a lengthy process.
      First, each bank (or loan servicer to be more exact) handles things differently.   After the buyer and seller come to an agreement and sign a purchase contract, it is sent to the bank along with a whole package of paperwork from the seller.  This usually includes:  A letter of hardship explaining why the borrower is unable to keep up with the mortgage, the two most recent paystubs, the last two years tax returns, and two months of bank statements.  Certain banks may require additional paperwork.  

     The bank reviews all the paperwork and determines whether or not the borrower might qualify for certain government programs (HAFA, etc.).   At this point they generally order up a BPO (Broker Price Opinion) to determine the value of the home.   Then the file is usually turned over to a bank negotiator who tries to work out the short sale, and gain the investor's approval.  They determine exactly what fees and charges the bank will accept, and whether or not they will excuse the short payoff of the loan.
     Once the investor's approval is given, then the buyer must quickly perform.  They have approximately 30-45 days to perform all inspections, get an appraisal, get through mortgage underwriting, get loan documents, and sign them.  There can be unexpected glitches along the way.
   This has been an oversimplification, but you can see there are many steps to the process, and it takes patience and diligence to get the sale accomplished.   I have had several short sale listings, and one of them for a very long time.  And then all of a sudden, I began getting the bank approvals one by one. 
   One of the listings I had for 13 months!  That's my longest listing ever!  We had submitted multiple offers to the bank for the short sale of the home.  After having several buyers give up, one finally stuck it out.  We finally closed last week.  The buyer bought a wonderful home at a fabulous price.  The seller avoided foreclosure and got out from under the pressure of being in a home he could no longer afford, and the agent (Me!) put the file to rest with a smile on her face. 
[  Word of caution:   Short sales can be tricky.  We advise that both buyers and sellers involved in short sales consult with a real estate and tax attorney.  ] 
Patricia Paul, GRI ***   ***  (520) 548-2078

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