Five Tips to Better Navigate the Short Sale Process
Unfortunately, with the economy's slow recovery and still-high unemployment rates, many homeowners continue to confront difficulties in making their mortgage payments. If you're one of these homeowners, know that you're not alone and know that there are several options to explore prior to foreclosure, such as a short sale. A short sale occurs when the outstanding loan(s) against a property are greater than what the property can be sold for.
As you've probably heard, however, short sales can be a drawn out and complicated process. Here are five tips to help you create a successful short sale:
1. Get comparable sale prices and an estimate of expected closing costs to help verify the current market value of your home.
2. Determine the amount of all loans against the property. Subtract the total amount you owe on the property from the estimated proceeds of the sale.
3. Contact your lender or lenders. Insist on speaking with someone in authority about a short sale. Remember that you are asking the lender to accept less than the total amount you owe, so be firm but cooperative.
4. Be prepared to submit the necessary documentation, including a letter of authorization giving the lender permission to talk with specific interested parties about your loan. Include your name, address, the loan number, and your agent's contact information.
5. Include a hardship letter describing how you got into a financial bind, and provide proof of your assets and income. You also may wish to include recent bank statements, with an explanation of any unusual deposits or withdrawals, and your broker's competitive market analysis.
Be sure to work with a real estate agent who has experience in short sales. Many agents have been through comprehensive short sale training and received special distressed property designations. Above all, the short sale process requires patience-even after you find a buyer. But for many homeowners, it was well worth it.