Things You Need to Do A Short Sale in Richmond, VA

A. THE SHORT SALE PACKAGE

The client will need to bring to my office the following items before action can be taken:

1. Hardship letter – must reference property, loan number and creditor. Should request short sale approval and not loan modification. Must be signed by each borrower.

2. Itemization of monthly income and expenses.

3. Written authorization. Will be signed by borrower at initial client meeting or can be handled by agent.

4. Last two pay stubs or statement of unemployment.

5. Last two monthly banking statements.

6. Last two years tax returns.

7. Current balance statement for ALL liens.

These items will need to be updated as the property is marketed.

The Realtor will need to provide the following PRIOR to submission of the package.

1. A Contract.

2. Purchaser’s Pre-approval letter or evidence of funds.

3. A market analysis of the property (“BPO”).

My office will provide:

1. A draft HUD1 Settlement Statement.

2. A cursory title examination of the current owner (depending on the length of ownership)

B. ACQUIRING SHORT SALE APPROVAL

The borrower/seller and agent must be aware of the following:

1. Under no conditions will they be able to get any proceeds at closing.

2. Any change in the price subsequent to approval will require new approval.

3. The lender COULD refuse to forgive the deficiency

4. Junior liens MUST be addressed at closing (even judgments)

5. Some Lenders may require REDUCED Commissions (5%)

C. REQUIRED AGREEMENTS

1. Short Sale Addendum to Listing Agreement (Realtor) -You need permission from the Seller to list as Short Sale

2. Short Sale Engagement Agreement (Attorney)

Our firm’s fees will not be the reason the short sale does not happen.

3. The Short Sale Addendum to Residential Contract

4. Short Sale Information Form

5. Owner’s affidavit

D. CLOSING PROCEDURE

The Realtors should discuss the benefits of using the Seller’s attorney on the Buyer’s side.

In the event we are not the Closing attorney we will confirm the following:

1. The cutoff date for funding is in writing and has been met.
2. The type of payment requested by the creditor is used at settlement.
3. A legible copy of the Creditor’s approval letter signed by the Seller is attached to the settlement statement.
4. That the creditor has signed or otherwise approved in writing the HUD-1.
5. A final title examination is done prior to recording.
6. Review the settlement statement and approval letter to confirm sufficient funds are being disbursed timely

E. OBLIGATIONS OF THE SELLER

1. The Seller cannot pay any liens ‘outside of closing”.
2. The Seller cannot sell the property to a relative or confidant.
3. The Seller cannot enter any agreement to retain possession unless fully disclosed (which will probably cause rejection).
4. Verify that the sale is bona fide and the Purchaser and Seller are not involved in any enterprise to mutually benefit from a subsequent sale
5. Verify bankruptcy has not been filed. BANKRUPTCY WILL CAUSE ADDITIONAL TIME AND EFFORT TO EFFECT A SHORT SALE

FOR MORE INFORMATION CALL ASHLEY HEARNE AT 804-901-2627