I have a client who bought a beautiful home in 2007 that they loved. Unfortunately, like a lot of people, they suffered a severe financial hardship in 2010 and could not continue paying the mortgage payments on their primary loan although they did keep paying the small monthly payment on their secondary, home equity line of credit.
After I completed the extensive training for my Certified Distressed Property Expert designation last year I emailed all my past clients to inform them of this and this particular client contacted me to see if I could help them.
I met with them in September and we decided to list the property. They needed a little time to do some yardwork and we listed the property on October 7th.
On October 24th we had a contract at a price that was within the range of what I felt the lender might approve and I prepared and submitted all the paperwork to the 2nd lender (Bank of America) first. We received an approval letter within 7 days in which they accepted the amount they would receive as a full settlement of the loan with no liability to my client. I then prepared and submitted the paperwork, including the approval from Bank of America, to the lender on the primary loan – GMAC.
There were some additional requests for paperwork and the appraisal done by GMAC came in $15,000 higher than the contract price (but right at the top of the range I thought it would) and we were able to negotiate with them so that they would accept $10,000 less than the appraisal. We submitted the revised offer and on December 12th we had their approval letter which also eliminated any liability for my client for the balance that would be unpaid after the short sale closed.
So it took a total of 49 days from the date we went to contract to get approval of BOTH lenders. And about 7-10 days of that was due to the fact that my client had to get some paperwork from their accountant that I had requested at the beginning but they hadn’t gotten.
The buyer was getting financing so there was additional time for that since a lender will not start to process a loan until they have the short sale approval letter(s) so the total time from contract to closing date was 84 days and from listing to closing was 101 days.
My client, who had received notice in the fall that there was a court date scheduled for their foreclosure in February of this year, left the closing with no liability for either loan and a $3000 relocation assistance check because of qualifying for one of the programs that pays relocation assistance at a short sale closing.
Even the buyer’s Realtor was amazed. She told me that she had another client trying to buy a short sale property and they were still waiting after 5 months for a response to their offer. And the seller was using an attorney to handle the short sale for them.
Here’s what she wrote to me afterwards:
“I just wanted to express my appreciation for all your hard work.It was a pleasure to work with someone that is so knowledgeable and responsive. Your attention to detail was outstanding. You certainly are a Short Sale Expert.Thank you again for always keeping everyone up to date on the process. It could not have gone smoother.”
Not all short sales will go this quickly or smoothly…BUT the majority of them should not drag on like many I’ve seen. If you know anyone who has tried to sell their property here as a short sale and gave up or is hesitant to do so because of the horror stories they’ve heard – PLEASE have them contact me right away. I don’t want to see anyone’s home or condo foreclosed on when it could have been saved.