Short Sales Louisville, KY

Short sales have become a common occurrence in the Louisville, KY real estate market.  A Louisville, KY short sale is defined as when a lender accepts a lesser amount of money than what is currently owed by the borrower when the home is sold.  Hence, the home is sold at a price short of what is actually owed.  A short sale has its benefits in the real estate market because it can help a seller who is in financial trouble sell a home that otherwise would go to foreclosure, and it helps the buyer purchase the home at a price more inline with the current market.

The first step to a short sale is the seller decides to sell the home and lists it with a real estate agent.  I know of no mortgage lender who will do a short sale on a home that has not been listed for sale and exposed to the broader real estate market.  Lenders insist on this step because it helps ensure that they are receiving the maximum market price for the home when it does sell.  The real estate agent should price the home according to the current market trends, and should make regular price reductions until an offer is obtained.

The next step involves the seller completing a short sale package that is provided by the lender.  This will include an extensive financial disclosure, plus a hardship letter explaining the nature of and need for the short sale.  This short sale package can be quite detailed and must be completed accurately and honestly.  If the lender detects fraud, or if they detect even honest inconsistencies, they will reject the short sale and could possibly have legal recourse.  I would strongly recommend coordinating the submission of this package with your real estate agent and any offers you receive from buyers.

A further step involves my favorite part of the short sale process...  Waiting...  You wait for an offer, negotiate as you normally would for the best terms possible from the buyer, and include a statement in the final contract that lets all parties know that the home is sold subject to lender approval.  Then you compile all of your paperwork and submit it to the appropriate party at the mortgage lender for the short sale, and then you wait some more...

If your file passes the mortgage lenders basic short sale criteria it will be assigned to a negotiator.  The negotiator will be the person who ultimately determines the fate of the short sale package.  It is possible that in certain extreme cases you will get further up the management totem pole at the lender, but most likely the negotiator will be your primary contact.  The negotiator will act just like any other party to contract negotiations and either reject, accept, or counteroffer the buyer's offer.  They will usually communicate their responses verbally, but you will be expected to put yours in writing.

Finally, after all of the waiting, phone calls, and emails, you may find yourself with an acceptance of the short sale from the lender and can move forward with the closing.  If you do get rejected, make sure you discover exactly why so you can either resubmit the file with the necessary corrections, or you know for the next time what the lender is looking for in an offer.

Good luck with your short sales seller, and buyers remember to be patient and reasonable as the process does take time and you are negotiating your short sale with a lender who has no personal interest in whether or not you acquire the property.