What is the Temecula Short Sale process?
What is the Temecula Short Sale process? A short sale process is an alternative option to foreclosure. A short sale is when a lender allows the homeowner to sell their home for less than what is actually owed on the mortgage note. Many homeowners and lenders alike are finding that the short sale option is more beneficial for both parties than the expense and final outcome of what a foreclosure may cost them.
In the the beginning of the short sale process it is important to make sure that you find the right licenced real estate agent for you. Make sure that when you choose an agent they are well versed in the short sale process. It is important that they have experience and knowledge with short sale transactions. This is so important and the success of your short sale may count on this. Once you have chosen a agent they will conduct a intake interview. This process will give the agent a better assessment of your situation.
Once your intake evaluation is completed with your agent the actual short sale process will begin. Your agent will submit your short sale file to your bank or financial lender if you are applying for HAFA or any of the cooperative programs some of the lenders are offering. If you are doing what we call a “regular short sale” the actual process with your lender will not begin until we have an offer on your property.
In both situations your lender will go over your file and then determine whether they will proceed with your short sale request. At that point your lender will order a BPO.
What is a BPO? A BPO stands for a brokers price opinion. The lender will hire a real estate agent to give the lender a market value of your market according in their opinion. This will be determined by the agent looking at the price of the last home sold in your neighborhood and the current value of another property in your neighborhood. Once that agent has done this then the BPO will be sent back to your financial lender. The lender will then call your agent with a net figure that they will accept on the property.
The amount that the BPO comes up with is configured with a standard formula that is used to estimate the losses that the lender can incur. This is usually 10 to 15 percent off of what the BPO has determined the fair market value of the property to be but remember that this is not always the case. Each lender has different rules. The rules of determining what short sale price will be acceptable is based on the investors’ parameters which are given to your lender. The investor is the note owner and most of the time, the investor is not the same lender that you are paying your mortgage payment to.
We are now in the final steps of the Temecula short sale process. Once the BPO figure is established the property will have a much easier time being sold. The sellers agent will only be able to accept offers that meet the BPO price. Once there is a buyer that meets the BPO amount then you move can move towards the closing procedures and the buyer can start to get their loan.
It is important that the real estate agents that are involved with the short sale process are experienced. This will determine how quick and smooth the short sale process will be. There are many time sensitive deadlines to meet in the short sale process so you will want to make sure that your agent is experienced or your short sale may very well fall through.
For more information on the Temecula short sale process contact our office and speak with one of our experienced agents.