Agent s Short Sale Pre-Screening Checklist

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Alfred Dean
8 years ago
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1 Agent s Short Sale Pre-Screening Checklist Sellers Property Address Date: Short sale transactions can take a lot of time and effort. Pre-screening a prospective short sale listing is one of the best ways for agents to ensure your hard work will result in a successful closing. Use this checklist to carefully consider possible obstacles to short sale transactions. If the subject property is secured by multiple loans, answer the questions for each loan where applicable. The more check marks you have in the shaded area on the far right column, the more potential obstacles you may face in closing your short sale transaction. This checklist only serves as a guidepost. It is not intended to be an exhaustive list of every issue that may arise in a short sale listing. A. Sellers A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 Do the sellers have a compelling financial hardship? Can the sellers document their financial hardship? Can the sellers provide the other documents needed for the short sale package? First Loan: Are the sellers currently delinquent on their mortgage loan? If, when was last payment made? Second Loan: Are the sellers currently delinquent on their mortgage loan? If, when was last payment made? First Loan: Have the sellers contacted the lender to discuss their situation? Second Loan: Have the sellers contacted the lender to discuss their situation? Have the sellers consulted with a HUD-certified housing counseling agent? Have the sellers consulted with a financial adviser, tax advisor, and attorney as appropriate? Have the sellers considered the alternatives to a short sale, such as foreclosure, loan modification, refinance, deed-in-lieu of foreclosure, or bankruptcy? Are the sellers currently in bankruptcy? Do the sellers understand the pros and cons of a short sale versus foreclosure? Have the sellers come to terms with the negative impact a short sale may have on their credit? Have the sellers come to terms with the tax consequences if any of a short sale?

Use this checklist to carefully consider possible obstacles to short sale transactions. If the subject property is secured by multiple loans, answer the questions for each loan where applicable.

2 Have the sellers come to terms with potential liability for the shortfall (e. g., lender may require sellers to pay shortfall, lender A13 may require sellers to sign a promissory note, or lender may reserve its rights to pursue sellers for the shortfall? A14 Have the sellers come to terms with the possibility that they will not receive any money at closing? A15 Just in case, do the sellers have any money to contribute to the short sale? If, indicate the amount: $. Do the sellers have good-paying jobs, cash, properties, or other A16 assets that a lender may want to use to satisfy the mortgage debt owed? A17 Can the sellers account for the assets listed on their original loan application when they took out their existing mortgage loan? A18 Did the sellers make any misrepresentations to the lender when they originally applied and obtained their existing loan? A19 Do the sellers currently occupy the property as their principal residence? A20 Do the sellers have somewhere to A21 Do tenants or anyone other than the sellers currently occupy the A22 Are the sellers willing to do maintenance and repairs to improve the marketability of the property (e.g., clean house, remove clutter, do yard work, or paint? A23 tes: Will the seller be cooperative with the short sale process? B. Loan B1 B2 B3 Are the sellers substantially upside down on the property (see Section D? ls there only one mortgage loan that s upside down on the First Loan: Are your clients the exact same individuals named as borrowers on the mortgage loan? Second Loan: Are your clients the exact same individuals named as borrowers on the mortgage loan?

A14 Have the sellers come to terms with the possibility that they will not receive any money at closing? A15 Just in case, do the sellers have any money to contribute to the short sale?

3 B4 B5 B6 B7 B8 B9 B10 B11 B12 B13 First Loan: Have you as the agent independently verified for yourself the borrowers named on the mortgage loan (e.g., recent mortgage loan statements, deeds of trust, preliminary title report, foreclosure notices, or other public records? Second Loan: Have you as the agent independently verified for yourself the borrowers named on the mortgage loan (e.g., recent mortgage loan statements, deeds of trust, preliminary title report, foreclosure notices, or other public records? First Loan: Has the lender filed a tice of Default against the If, when was the notice filed? Second Loan: Has the lender filed a tice of Default against the If, when was the notice filed? First Loan: Has the lender filed a tice of Trustee s Sale against the If, when is the trustee s sale? Second Loan: Has the lender filed a tice of Trustee s Sale against the If, when is the trustee s sale? Is there enough time before the trustee s sale to find a buyer, obtain short sale approval, and close escrow? Do the sellers need to obtain a postponement of an upcoming trustee s sale? First Loan: If the lender forecloses, can the lender pursue a deficiency judgment against the borrower? Second Loan: If either the first or second lender forecloses, can the second lender pursue a deficiency judgment against the borrower? First Loan: Does the short sale lender have to get an approval of the short sale from its investors? Second Loan: Does the short sale lender have to get an approval of the short sale from its investors? First Loan: Does the short sale lender have to get an approval of the short sale from a PMI company or other insurers? Second Loan: Does the short sale lender have to get an approval of the short sale from a PMI company or other insurers? First Loan: Will the short sale lender agree to release the sellers from personal liability for the shortfall? Second Loan: Will the short sale lender agree to release the sellers from personal liability for the shortfall? First Loan: Does the short sale lender have streamline procedures for handling short sales? Second Loan: Does the short sale lender have streamline procedures for handling short sales?

First Loan: Has the lender filed a tice of Default against the If, when was the notice filed? Second Loan: Has the lender filed a tice of Default against the If, when was the notice filed?

4 B14 tes: First Loan: Have you had good experience dealing with this lender for other short sale transactions? Second Loan: Have you had good experience dealing with this lender for other short sale transactions? C. Property C1 C2 C3 C4 Are your clients the exact same individuals named as owners on title to the Are there any other actual or threatened property tax liens, assessment liens, delinquent HOA dues, judgment liens, income tax liens, child support liens, lawsuits, or other encumbrances that may affect title to the Have you as the agent independently verified for yourself the title to the property and the liens against the property (e.g., recent mortgage loan statements, deeds of trust, property profile, preliminary title report, foreclosure notices, tax records, or other public records? Will the property be easy to sell? C5 C6 C7 C8 Are there any major defects to the than defects, are there any other reasons why the lender may not want to take the property back through foreclosure? Will it be easy to substantiate the fair market value of the property to the short sale lender? Are there adequate sales comparables in the neighborhood to substantiate the sales price? C9 Do you consider current market conditions in the neighborhood to be stable? tes:

Property C1 C2 C3 C4 Are your clients the exact same individuals named as owners on title to the Are there any other actual or threatened property tax liens, assessment liens, delinquent HOA dues,

5 D. Estimated Shortfall Estimated Sales Price: First Loan Balance: Second Loan Balance: Estimated Closing Costs: $ : : : Estimated Shortfall: Copyright May A product of Real Estate Business Services, Inc.

Costs: $ : : : Estimated Shortfall: Copyright May

Presented by: Randy Roach of North American Realty of Nevada. A Guide To Understanding The Process

Presented by: Randy Roach of North American Realty of Nevada A Guide To Understanding The Process What Is A Short Sale? It s a Real Estate transaction where two unique events must occur together. (1) Net