Are you thinking of doing a short sale? Although it may not be a perfect solution to your financial setback, it might be the best option at the given time.
Perhaps you are also wondering how long the short sale process takes in Charlotte NC. The answer is all short sales are different. An exact timeline is hard to determine. Sometimes, this kind of transaction can take up to three months longer than a regular sale. In a short sale, banks are losing money. It’s understandable why they are not too keen on it. So if you are considering a short sale as an option, you should be prepared for the process to be lengthy.
Here are important details you have to know regarding the short sale timeline:
Starting the Short Sale Process
The timeframe for selling your home as a short sale varies by state and is determined by many factors. These include the actions of the homeowner and that of the bank. It also depends on the internal process of the bank and the difference between the mortgage value and the value of the property.
To start the short sale process, the homeowner should submit a package as required by the bank. The following is a list of documents generally required by all banks for short sale submission:
1. An Executed Listing Agreement
The bank will want to know when the property came on the market and the name of the brokerage that listed it. They also need to see the term of the listing and the amount of the commission.
2. A Fully Executed Purchase Contract
It is important to note that not all banks will accept an electronically signed purchase contract. There are cases when the seller has to secure physical signatures on the contract. Make sure to inquire with your bank because an incomplete contract can cause delays.
3. Seller’s Hardship Letter
The hardship letter is one of the most essential parts of the short sale package. It explains why the homeowner is behind on the mortgage payments. It should also include what the homeowner has done to find a solution and why a short sale is the best choice at the moment.
Hardships that qualify for a short sale usually include the following:
- loss of a job
- job transfer
- reduction in pay or work hours
- divorce, separation, or marital difficulties
- death of a spouse
- medical expenses from a serious illness
- natural disaster
- military service
4. Authorization Letter
The authorization letter is signed by the seller and gives authority to the bank to speak with the listing agent. This is important because without this letter, the real estate agent can’t negotiate with the bank.
5. Last Two Bank Statements
The last two most recent bank statements of the seller are also required for submission.
6. Tax Returns and Wage Documentation
The seller’s federal tax returns for the last two years are required. They should be signed, dated with all pages attached. The seller will probably also need to submit his last two years’ worth of W-2s (1099’s if you’re self-employed). He also should include his last two pay stubs and other documents supporting his wages.
6. Closing Disclosure
The Closing Disclosure, formerly known as a HUD-1, is an estimated closing statement. It is generally prepared by an escrow office. This document contains the property address, sellers’ names, and buyers’ names. It also has the estimated closing date.
Short Sale Approval Timeline
The process of selling your home as a short sale in Charlotte NC involves extensive paperwork sent back and forth between the bank and the homeowner.
After the seller has submitted the short sale application, he may also submit to the bank any offers on the property. It is also important to remember that banks may choose their own timeline to respond to the offers. The seller should be prepared for a long waiting period.
- Collection of Documentation (One Week to Three Weeks)
As mentioned before, the homeowner should submit documents to show hardship in order to qualify for a short sale. The homeowner should also prove the value of the property.
The process of writing a letter and gathering necessary documents, such as pay stubs and bank statements, can take between 1 to 3 weeks.
- Property Valuation (One Week to Three Weeks)
After the seller has submitted all the necessary paperwork, the lender will review them. The lender will want to see the seller’s debts and assets, review their credit score, and the contract to purchase the home. Then, the lender will ask for property valuation. This can be done either by a real estate professional or an appraiser.
This process can take up to three weeks. It also depends on when the bank schedules an official appraiser. Once this has been done, the results will be sent to the lender.
- Negotiations (One Week to Three Weeks)
Once there are offers on the property, the homeowner can start sending them in to the lender. The lender may take a few weeks to respond to the home buyer. The lender will accept, reject, or counter the purchase contract.
This may take even longer if the home buyer and lender go through several rounds of negotiations.
- Escrow and Closing (Up to Six Weeks)
The escrow process usually takes about four weeks in a traditional home sale. However, in a short sale, it may take longer.
Accelerating the Short Sale Process
Unfortunately, delays in the short sale process are common. While there is no sure way to speed up a short sale, delays can be minimized by doing the following:
1. Make sure that the documentation is complete.
The short sale process involves an extensive amount of paperwork. The lenders will go over every detail. If one page is missing or one signature is left blank, the document doesn’t get processed. If paperwork is not reviewed for completion and accuracy, this can cause delays.
If you want to avoid setbacks, know what documents the lender will anticipate. Make sure to also review every document for any possible issue and regularly follow up with the lender.
2. Work with an experienced short sale agent in Charlotte NC
The best way to expedite a short sale approval is to be worked with a real estate agent who is experienced with short sales. If the real estate agent isn’t experienced with short sales, you’re likely wasting your time.
A short sale agent will find it easier to navigate the complex process of short selling a home. You should also work with a professional who has excellent negotiation skills to have the best chance of being approved.
Let our team at Showcase Realty be your trusted resource throughout the entire short sale process. We specialize in short sales and we are more than willing to assist you in finding a favorable solution for your situation.
Here are other benefits of having us as your short sale agent:
- We believe that experience is necessary for a successful transaction. We have successfully represented both sellers and buyers in completing short sale transactions.
- We understand the complexities of the short sale process and we know how critical the deadlines are.
- We are tech-savvy. We use top marketing strategies, technology, and systems. Our goal is to give our clients cutting-edge results.
- We are professionals. We always adhere to the highest standards of integrity and ethical business practices. We practice honesty and integrity at all times and in all situations.
If you need help arranging a short sale or more information about the process, call me, Nancy Braun, at 704-997-3794! I will help you sell your home in Charlotte, NC.