A short sale Realtor® is a real estate agent who works with homeowners to prevent foreclosure. Someone who is a registered Realtor® has a membership with the National Association of Realtors®. It is important to note that not every real estate agent is a Realtor®.
A "short sale" in real estate means buying a property from the lender for less than the remaining mortgage amount. For example, if a homeowner owes $100,000 US Dollars (USD) on his or her house but cannot pay the monthly mortgage, he or she might hire a short sale Realtor® to find someone to buy the house for less than $100,000 USD. It is up to the lender, usually a bank, to accept or decline a short sale.
A short sale Realtor® can be a real estate agent, broker, an attorney, or an investor who specializes in working on short sales. Some specialists, called investors, actually buy the homes from the homeowners and then turn around and resell them. Other short sale specialists look for outside buyers to buy the distressed property. They take a regular commission once the house sells, usually between three and five percent of the total cost.
The short sale Realtor® will first meet with the homeowner, discuss a plan of action, and look over the mortgage paperwork. In general, the house first must be appraised of its value by comparing it to other similar homes in the neighborhood. This is called "running comps" or "finding comparisons."
Then, the short sale Realtor® will usually write a letter of hardship to the lender, which describes the reasons why the homeowner cannot make monthly mortgage payments. Acceptable reasons include getting laid off from work, a family illness, or death. The letter of hardship must accompany detailed financial paperwork that shows how much the homeowner actually makes per month.
The specialist typically also calls the loss mitigation department that handles the homeowner's mortgage. He or she works with the loss mitigation specialist to make sure the bank accepts the short sale. If the lender declines the deal, the house will go into foreclosure, and it will be repossessed by the lender.
If the lender accepts the deal, the house is sold for less than its remaining mortgage amount. In most cases, the homeowner will not get the black mark of "foreclosure" on his or her credit report, which can inhibit a person from buying a new house for several years. The short sale Realtor® also gets paid a commission when the transaction is complete.
