Determining Short Sale Price

For the owner or agent, selling a short sale property is much like selling any other home - with a few extra steps thrown in for good measure. Remember that state law also governs the activities of those who act on behalf of property owners who are facing foreclosure, so an in-depth working knowledge of the process is essential. Here is a handy checklist to help sort through the details.

- Ask for details of the loan by sending a loan information request letter signed by all sellers.

- Order a preliminary report/title commitment from a title company.

Estimate a purchase price by:

- Calculating current outstanding balances on all Deeds of Trust.
- Checking for other lien holders and negotiate for a reduced payoff.
- Accepting that commission may be reduced if there are insufficient funds.
- Reviewing all other liens and judgments.
- Comparing the market value to the amount needed by the seller.
- Seeking the right price to make a quick sale.

Negotiate a purchase price with the lender, including:

- Commission
- Repair Costs
- Other fees including creative financing options

Factor in other closing costs that may be required such as:

- Escrow
- Title insurance
- Recording fees

After you have established the sales price:

- Advise the seller (in writing) to consult a tax professional and ask the seller to acknowledge in writing for your file.
- Note Notice of Default (NOD), foreclosure pending and terms to be approved by the lender on MLS or other listing services.
- Order inspections and obtain comparables for the appraiser.
- Disclose, disclose, disclose to any potential buyers.
- Submit all offers to the lender along with the buyer's prequalification letter.