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Clovis Short Sales – The 3 Step Process
October 23rd, 2009
Clovis Short Sales – The 3 Step Process
Clovis Short Sales
What is a Clovis short sale? A short sale (also known as a “pre-foreclosure”) occurs when a Clovis homeowner sells their home due to a financial hardship for less than the mortgage owed on it. In other words, if you purchased your Clovis home for $400,000 and still owe $350,000, but now can only sell your home for $300,000 – a short sale may be right for you.
Short Sale Benefits
There are 3 primary benefits of short sales.
- Sellers: Short sales prevent homes from going into foreclosure. Foreclosures significantly damage the home owners credit and when the home owner can get a mortgage again (usually 5 – 7 years).
- Buyers: Clovis buyers get a bargain-priced home, usually in much better shape than a foreclosure, and for about the same price.
- Banks: Banks lose more money on foreclosures than short sales. There’s no guarantee a bank will accept an offer that’s less than the mortgage owed, but it’s usually in their best financial interest to go though with a short sale rather than foreclose.
Short Sale Drawbacks
Here are the primary drawbacks of a short sale for buyers and sellers:
Sellers: If you sell your home as a short sale, your credit will take a hit and most experts agree that it will be at least 2 years before you can get another loan / mortgage. However, according to Ask.com, you can immediately apply for a loan to buy another home if you have kept your mortgage payments current, had no delinquencies exceeding 30 days, and did not agree to repay the debt relief. “It’s the late payments that affect your credit report, not the short sale.”
Buyers: Be aware that the short sale process usually take much longer. Often times, Buyers and sellers often get so fed up with the process that it’s not unusual for the deals to simply die.
How Clovis Short Sales Work: 3 Step Processes
In a nutshell, the Clovis short sale process works like this.
Step 1: When you list your Clovis home as a short sale with us, we’ll first determine your home’s current market value and then sell it for the highest possible price. FYI, the bank will have to approve the sale and won’t accept super low-ball offers or prices (banks want to lose as little money as possible). This is the quickest and easiest step. We can list your home usually the very same day.
Step 2: When we get an offer, we submit a “lender package” that includs everything from the appraisal and a hardship letter, to the offer / sales contract. This step takes several weeks to complete and varies depending on your financial situation.
Step 3: The last step is to get the bank’s approval. A lot depends on the bank, how many short sale they’re dealing with, and the number of their staff.
The first thing the bank does is review your file. Banks typically take 45 to 60 days to even acknowledge they received our paperwork. They then assign a negotiator to work on your property. At that point, the bank will get an independent broker’s price opinion on the value of your home and whether the sales price makes sense.
If the sales price doesn’t measure up to the broker’s opinion, the lender will tell us the price should be higher (which is why it’s important to price your home right the first time and then sell it for as much as possible).
There’s no set time-table for this final step. Every bank and short sale is different. Once we have an offer, the short sale process could take anywhere from 60 days to several months to complete. But if you’re upfront with the buyer and they love your home, many will wait, although some will move on. However, the process is getting faster and there’s even talk about the Treasury offering short sale incentives in the near future to encourage short sales. We’ll let you know if that ever happens.
The Good News!
We tell our clients to focus on the good news of Clovis short sales. If you’re buying a Clovis short sale, you’re helping the community and another person get back on their feet again. Plus you’re getting a bargain! For sellers, Clovis short sales usually get offers within a few weeks and you can begin to move on and start another chapter in your life.
Clovis Real Estate
Contact us if you’re buying a Clovis short sale, or if you’re having trouble making your mortgage payments. Let’s sit down and talk about your options. Then you can make an informed decision. At Clovis Real Estate, we’re Clovis Experts and specialize in Clovis homes for sale. As Clovis Realtors, every day we help clients determine their best real estate options. We can help you, too.
Here’s other short sale articles you may find helpful:
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