Short Sale Guide
A short sale is an offer made to purchase your home which is an offer that is lower than what you currently owe to your mortgage company on your home. When it comes to doing a short sale you will need to do a series of tasks to try to unload your property in a s short sale before the property ends up going to a foreclosure sale, that is if the borrower is already delinquent. First and foremost you must list your property for sale immediately. With the average time of a home taking a longer and longer to sell when listed on the market for sale, getting a quick start to the listing of your property when you sense financial trouble brewing is a wise a decision.
Therefore proceeding to list your home for sale with a realtor or real estate agent locally needs to be done right away. Once your home is listed for sale ask your lender for an approval of a short sale of your home. Your lender is in the market to make money and mitigate financial losses, so if you are behind on your mortgage payments it would be in your lender’s best interest to grant you a short sale with the right buyer. Ask your mortgage company to send you out a short sale package that would need to be completed by you or your attorney, and returned back to your lender; if they do not have a formal short sale packet to send out to you. A lender will typically accept a listing agreement with your realtor or real estate agent, a hardship letter briefly explaining why you are behind with your mortgage payments if your are past due, and a your written financials with your monthly income and expenses.
A listing agreement is the agreement made with you and selling agent or realtor that shows your property has been listed for sale. A hardship letter is a written to explain to your mortgage company why you are behind on your payments if your are past due. In a your hardship letter you will request for a short sale approval. For your written financials just write down all of your monthly expenses and income; in other words write down your monthly budget which will include everything coming in on one side and on the other side write down everything going out on a sheet of paper. You may also use any pre-prepared financial template with fill in the blank entries. The next step would be for you to send in all of your documents as a formal short sale request. You should fax in a copy of all of your documents to your lender, in addition mail a hard copy by certified mail and request for a return receipt to show that your documents were received in house.
Your realtor will continue to market your property in various ways. If you live on the property your will entertain your potential buyers when they arrive to view your home. If you do not live in the home that you are trying to sell your realtor will take your potential buyers through the house on tours. Once you have someone who is interested in the property they will make an offer through your realtor. Your realtor will present any valid offer to your lender who will either accept or deny the offer. If your mortgage company accepts the offer, that’s terrific. Once the buyer gets approved financing or purchases the property outright and closes, your short sale is completed and you are now free of the financial obligation of that mortgage. Now if your lender denies a short sale offer made by a potential buyer, the buyer can either make a counter offer and see if your lender accepts the new offer.
If a potential buyer is denied again and again, his/her offer is too low and you will have to keep searching for a qualified buyer with an acceptable offer to please your lender. Hopefully your lender will eventually accept an offer and close the deal in order to avoid a foreclosure sale of your home. A lender will often stop a foreclosure sale of your property if there is a valid offer on your property. However, if your property is fixing to be sold in a foreclosure sale tomorrow, and you are listing your property for sale today, your lender will almost always not stop your foreclosure sale. You might think that this is not fair, but your lender sees it as you doing “too little, too late.” Your mortgage company would like to see your property listed for sale preferably months before your foreclosure sale date, and they might stop your property’s sale if the date is quickly approaching and you have not have any or many solid offer for purchase. So if you see financial problems up ahead where it will cause you to not make your mortgage payments regularly or at all, then you might want to consider listing your home for sale right away and be prepared to down size. We all know that listing our home for sale might not be at the top of one’s list, but it sure beats going to a foreclosure sale and being kick out of your home. Also, remember that having a short sale on your credit report is far less damaging than having a bankruptcy or foreclosure. Good Luck with your short sale!
