What is a Short Sale?
A short sale is a transaction that allows the sale of a property for an amount less that the amount owed to the bank. The bank in return accepts the proceeds as settlement of the debt.
How long does it take to close a short sale?
It depends on the property, the lender, and other factors, but in general from the time of contract a short sale should closing in 90-120 days.
What happens to the seller's credit when they short sell their property?
Typically the loan will show up as "paid" on their credit report; however there will be a notation that says "settled for less" or something along those lines. It is more favorable for a homeowner to short sale than to have a foreclosure or even a deed in lieu on their credit report. A short sale will affect the credit of the seller for approximately 2 years, where a foreclosure will affect the credit report for 7-10 years.
What documents does a seller include in a Short Sale package?
Documents depend on the lender and situation. AFS will need an authorization to discuss your file with the lender and the seller will be required to supply financial information, bank statements, pay stubs, award letters and other information. AFS will supply you with the complete package and work with you.
What percentage of mortgage companies send someone out for an appraisal on a possible short sale?
All lenders order a Broker Price Opinion (BPO) or full appraisal of the property before making the final decisions on any offer. This is the way they assess the market value and decide if the offer is sufficient.