The Not So Short Sale

When I started my blog, I never imagined anyone would read it. I thank you for those who took the time to read my first (any only) blog back in April. I had plans to blog once a week, detailing my journey to debt freedom. Imagine my surprise when God had other plans for my time!

I believe in the philosophy of "each one, teach one". So when a family member asked for help, she got it. Her and her husband had fallen on hard times. He had lost his job and could not secure a new one with his skill set. They ate through pretty much their entire savings. And then she lost her job, too. With neither of them really making significant changes in their spending habits, disaster soon struck. Bills fell behind. Creditors were calling night and day. Things were spiraling out of control.

I was truly heart-broken when I received the call. "I never wanted you to know how bad things really were. I'm lost. I don't know what to do." These were the words that squeaked out from the other side of the line. Luckily, I had enough sense to call home and tell my husband the situation. "Drop whatever your doing. This is an emergency." And together, we came got on the phone and came up with a plan.

Zig Ziglar said "If you aim at nothing, you'll hit it every time." My family member was walking around aimlessly, with no direction, no way out. But there is. It's called a plan. We immediately assessed how much debt they has incurred, what bills were due and set up a budget. Then we went through what could be sold to keep their four walls secure (when you pay food, lights and water, shelter, and transportation).

The hardest part came and reared its ugly head in the conversation. They would have to downsize and sell beloved their home. They were upside down on their mortgage and behind on their payments. We decided to contact a ELP (Endorsed Local Provider http://www.daveramsey.com/elp/realestate/ictid/elp_content/) to start the process. I have never done a short sale, so I had no idea what to expect. We found a ELP realtor who has done several short sales and would be willing to hold my family member's hand as needed. And trust me, she needed it. A lot. He informed us it could take awhile to get a buyer, complete the paperwork and finally get the banks approval.

That was a year ago.
 

If you ever have to go through a short sale, be prepared for the long haul. Her house was listed in Oct. 2011. She finally received an offer in April 2012. There was a mountain of paperwork to be completed. And even she thought she completed exactly as the bank requested, they would send it back for her to change something. This happened numerous times. On top of that mountain, there were several documents she had to provide the bank to prove why they were eligible for a short sale. Here is just some of what she had to provide:

1.      Most recent mortgage statements

2.      BANK financial worksheet

3.      BANK listing addendum

4.      BANK Contract Addendum

5.      BANK closing date addendum

6.      Affidavit of Arms Length transaction

7.      Sales contract

8.      Buyer Pre-approval or proof of funds

  

(The original list contains 21 items. And it was added to on what seemed like a daily basis.)

Between the revisions to paperwork, additional paperwork, phone calls, showings, inspections, etc., my head was starting to hurt. I mean, we started this a year ago! Is there light at the end of the tunnel? And then the email came. As of Oct. 2012, the bank finally approved the short sale. As of this posting, we are a week or so out from the closing. Everything has been moved out of the house. All that's left is the buyers signature on the dotted line. And the healing to begin.