Vero Realty LLC

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December 2017
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Short Sales

Vero Realty LLC can help you Understand Short Sales

A Short Sale is when a property is sold “Short” of what it is owed by the homeowner to the bank and lien holders. In other words, the banks and lien holder agree to sell the property for a lesser payoff than what they are owed in order to avoid foreclosure, and in many cases on secondary liens, recuperate part of the balance owed.

Banks and lien holders prefer to sell the property through a short sale agreement because they can usually make more money with a short sale rather than in a foreclosure sale. In addition, the property maintains itself and the neighborhood prices also hold higher than when the property goes into foreclosure. The bank also avoids the process of acquiring the property back to then resell it. The foreclosure process might take many months or years, in which the property can sit vacant and deteriorate more than when occupied.

Other benefits of a short sale is that it helps the homeowner maintain a better credit level when avoiding foreclosure. Many lenders require the homeowner to be late on his or her mortgage payment in order to qualify for the short sale agreement, but the results on credit scores are much better than a foreclosure. With the new Fannie Mae Guidelines, a homeowner can purchase another primary property after 2 years of a short sale agreement, instead of 5 years, or more, with a foreclosure.

The short sale process is still lengthy and it involves many hours of follow up with the lenders and other lien holders. For this reason, it is necessary to hire an expert real estate team that can help represent the distressed homeowner throughout the short sale process and that has the experience necessary to get the short sale approved and sold.

Short Sale Information Sheet

Each bank or lien holder requires a specific short sale packet. Below, we have put together a list that most banks require in order to process a short sale. Banks and lien holders require all of the following information.

Most banks require the following:
•Current Mortgage Statements and Any Other Lien Holder Contact Information ( HOA Liens, Contractor Lien, Personal Lien, etc)
•HOA Information and Amount Due
•Hardship letter
•2 years W-2’s or 1099 Statements
•2 years tax returns
•2 months pay stubs
•3 months bank statements
•Recent statements for 401k, retirement, investment accounts
•Financial Statement Form
•Authorization Letter

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