Selling St Louis Short Sale Homes

What is a 'Short Sale?'

A Short Sale takes place when homes are sold for less than the bank payoff, and the home seller does not have the funds to make up the difference.  

Contrary to the ideas of some, when any home with a mortgage is sold, the note that secures the deed of trust must be released by the bank.  This is an industry way of saying, THE BANK HAS TO GET THEIR MONEY.   If the sale is for less than the loan payoff, and the seller can't bring enough money to closing to pay the loan off, then a short sale must take place.   

The Opportunity for Seller's

To start the process of short selling a home, home owners need to contact a Realtor that regularly handles short sales.  Protocol varies with each bank with one exception:  they all pay Realtor commissions.  Having a Realtor actively consulting short sale sellers through the process is essential.

Not all home sellers qualify for short sales, and different banks have different criteria.  Some banks require that the homeowner must be behind in payments, others do not.  The typical process goes as follows:

• Request Hardship Packet -- some banks don't send the hardship packet until an offer is received, others will send the hardship packet instructions.
• Write hardship letter -- letter describes what hardship exists and why the seller must sell.
• Market home as short sale, price it low and try to attract a buyer quickly
• Sign 3rd Party Authorization Form allowing your Short Sale Realtor to communicate with the bank.
• Submit offer, hardship letter, hardship application, preliminary HUD1, and 3rd Party Authorization to bank for consideration.
• Wait, Wait, Wait, Wait and Wait some more
• Bank sends approval or rejection letter.
• Comply with terms of approval letter and close the deal  -OR- if rejected, solicit better offer from buyer or place back on market for new buyer.

To be successful, each step in the process usually requires a great deal of work and persuasion to keep the bank, seller and buyer together.  That is why an experienced agent is needed that understands the process and has the negotiation skills necessary.  Some deals have a seperate short sale negotiator involved in addition to the listing agent.