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Podcast

Short Sales: 4 Proven Ways To Speed Up The Process

By Gerald Lucas

One of the biggest complaints people have about short sales is how long they take to complete.  Here are 4 specific tips proven to speed up the short sale process:

  • Tip #1: Continue to pay all property-related expenses that are not wrapped into your regular mortgage payment–expenses like HOA fees or condo fees as well as water, sewer or other utility bills (basically any expense that is not included in your regular mortgage payment).  In most cases, you have to be behind on your mortgage payments before your lender will consider discounting your mortgage loan. Unfortunately, when people stop paying their mortgage, they often stop paying these other property-related expenses—BIG MISTAKE!  When you don’t pay these expenses, they will come back to haunt you by becoming liens against your property making it more difficult and time consuming to close your short sale transaction.
  • Tip #2 is to terminate any rental leases you have on property that you are trying to short sell.  If you can’t terminate the lease, then don’t renew it when it expires.  Here’s why–in order to get a lender to approve your short sale application, you normally have to prove that you have a financial hardship.  When your tenants move out, the loss of rental income will help prove your financial hardship to your lender.
  • Tip #3: Make it easy for everyone who needs access to your property to get in.   Realtors, appraisers, home inspectors and obviously interested buyers need to get into your property.  If any of these people can’t get in or they are delayed or forced to reschedule their appointments, you are unnecessarily adding more time to the entire process.
  • Tip #4: Gather and submit ALL the current documentation your lender requests from you.  I know this may seem like a no-brainer, but I can tell you from many years of experience that banks generally will not even consider your short sale application if it’s incomplete in any way.  For example, if your bank requires 10 things and you only provide 9, it’s as if you haven’t provided anything at all.  Incomplete documentation is the most common way property owners destroy their chances of getting a bank approval.

In general, the homeowner/seller is the key to speeding up the short sale process.  By removing self-imposed roadblocks, you reduce delays so that you can close faster.

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