Steps in Washington Short Sales
A Washington short sale is the term used for when a real estate sale is “short”, or sold for less than what the homeowner owes on their mortgage. It is often viewed as an alternative to foreclosure when the owner can no longer pay their mortgage. The following are steps in the Washington short sales process.
Qualifying and Packaging
The homeowner first has to qualify for a short sale. Circumstances vary, but general criteria include needing to sell the home, owing more on the mortgage than the property is worth, personal hardship that will prevent future payments. Some examples of personal hardship might be medical issues, job loss, reduced income or the death of a spouse. If a homeowner qualifies for a short sale, then the short sale package is prepared. It is similar to trying to get a loan, except in the case of a short sale, it is trying to get out of one. The bank usually requires a letter of hardship, proof of income or lack thereof and a list of comparables for the house.
Marketing and Offer
The short sale agent then prices the house and markets it. The key is to find a price that the lender will approve, but that a buyer will conceivably pay. Once a buyer submits an offer, the agent will send the listing agreement, purchase offer, buyer’s pre-approval and copy of the earnest money and homeowner’s short sale package to the bank.
The last part of the Washington short sales process is bank approval. This can take up to 120 days. The lender typically acknowledges that they’ve received the package, then a negotiator is assigned and the property appraisal is ordered. The agent continues following up with the lender throughout the process to make sure it is moving forward. Finally, the bank issues either an approval or denial. An approval letter usually contains the accepted price, closing deadline and debt treatment. The seller then has to agree to the lender’s terms before moving forward to closing.