Short Sale Process
What Is A Short Sale?
A short sale usually indicates a homeowner is in financial distress with potential negative equity. Typically this is when the housing market is in a down period i.e. (2007-2009 financial crisis). Short Sales must be approved in advance by the mortgage lender.
Assess Your Financial Situation
Determine your financial condition and assets before contacting your lender about a short sale.
Demonstrate Provable Financial Hardship
Homeowners must prove to their lenders that they can't keep making payments at their current rate. Financial Hardship examples include, reduced income, unemployment, divorce, medical emergency, death in the family particularly the family's primary earner.
Prepare For The Short Sale
Gather appropriate documents for the lender to approve. When a short sale is approved by the lender, you should consult an attorney, a tax professional and a real estate agent.
Setting The Price
Pricing a short sale will not be the same as a traditional home sale. The property should be priced as close to market value so your lender will agree to the sale.
Submit Your Proposal To The Bank
Once you have a buyer and the necessary paperwork, you are ready to submit the buyer’s offer and your proposal to the bank.
Benefits & Drawbacks
Benefits - closing cost fees are paid by the lender, avoid going through foreclosure
Drawbacks - no negotiation power, lender approval, credit score damage, can walk away with nothing
