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Traditional Short Sale Process

Selling your home in a short sale. If you're concerned that your home may go into foreclosure and you haven't qualified for alternatives that would enable you to stay in your home, a short sale is an option you may want to consider.

Is a short sale right for me?

Program goal

If you're concerned that your house may go into foreclosure and you haven't qualified for alternatives that would let you keep the property, consider a traditional short sale, where you sell the property for less than you owe.

Eligibility

You may be eligible for a traditional short sale if:

You're experiencing a financial hardship, such as reduced income, medical expenses or divorce

You owe more on the property than it's worth

You're unable to afford your current monthly mortgage payment

You're unable to modify your current home loan

You don't have prior approval from us to pursue a short sale

You've received an offer on the property

Now that I'm in the process, what's next?

I'm trying to find a buyer.

In a traditional short sale, you market the property and receive an offer before you contact us.

If you haven't received an offer yet, please be aware that you're required to work with a licensed real estate professional to market and sell the property. We strongly recommend working with a real estate agent who's experienced in short sales and who can help guide you through the process. You won't have to pay the cost of the real estate agent since they'll be paid from the sale of the house.

I've received an offer on my house.

Before any offer can be considered, we'll need to receive a completed Second Lien Release letter for any home equity loan, lines of credit or other debts against the property. The closing can only take place after we receive the letter.

If you have a Bank of America home equity loan or line of credit, we'll take care of completing the required Second Lien Release letter.

If the second lien is with another lender, you'll have to contact that lender and request a Second Lien Release letter. The lender needs to provide this letter, sign it to indicate that they approve of the offer, and send it to you.

If you receive an offer, your agent will need to submit the offer to us.

I need to request a traditional short sale.

Before you call, to save time, please gather the following information that we'll be asking for:

  • Loan and property information
  • Information on any foreclosure notices or dates you've received
  • Details of the offer and a copy of the signed purchase contract
  • Information on any home equity loan or line of credit on the property, if applicable
  • Information on a loan modification, if you were considered for one
  • Details about your financial hardship

When you call, we may verify that there are no other options available that would allow you to keep the property.

I'm waiting for approval on the offer I submitted.

We'll complete the evaluation process, reach a decision and get back to you in approximately 30 calendar days after your real estate agent has submitted the offer to us. During that time, we'll work to gain approvals. Even if you’re pursuing a short sale with us, in most cases there’s a third party, known as the investor, who has ownership of the loan. We’ll need their approval in order to finalize the short sale.

We'll also work to determine the fair market value of the property. A professional appraiser will perform a valuation of the property at no charge to you. He or she will consider the sale price of other houses of similar size in your neighborhood.

Once the fair market value is determined, we may make a counteroffer. It's not unusual for potential buyers to withdraw offers all the way up until the closing, so during this time, we encourage you to continue marketing the property.

When all necessary parties have accepted the offer, we'll provide you with an approval letter releasing the house for purchase.

The offer has been accepted.

Final documents will be prepared and your agent will help you set a closing date.

After the closing, the sale of the property is complete.

Important: Depending on who owns the loan, if the funds from your traditional short sale don't cover the amount owed on your loan, you may be responsible for paying the difference (also known as the deficiency).