A Short Sale happens when you owe more on your home than what it is worth. Sometimes, homeowners may need to take advantage of this option when they are unable to make payments on the property that will eventually be foreclosed upon. This is a good escape route as it is a more positive alternative to having a foreclosure on your credit report. Before you decide to do a Short Sale; however, you must talk to your bank to get their approval, as this is a situation where there is a possibility of them taking a loss on the lien of the house. If the bank agrees; they will agree to allow you to sell your home for less than it is worth. In turn, this lets you get out of debt. The bank will sell the home to a new owner and hopefully recoup the money with the new buyer. For a homebuyer, the Short Sale can be great! This is a very good opportunity for a homebuyer however as they can buy a house from the bank for a little less money. In some areas of the country where the economy never fully recovered Short Sales are still common, because the homes lost so much value in the housing crash. To help you get ready for a Short Sale, there are several ideas to consider. Call the Lender Ask to speak with the person that manages the loans. Be honest and tell them directly what the problem is; chances are, they may be stubborn at first, but they will begin to not to be after you make it clear. Remember that your very first step should be to talk to your bank. The worst thing that you can do is to allow them to foreclose on your home. It also depends on the bank that you are working, with some are more adept to work with you than others. Submit letter of Authorization This is something that you submit to the bank to get authorization for being able to sell your home for less money. You will need to get signatures from people at the bank, yourself, and your realtor. This is your signed authorization that the bank approves of the Short Sale. Preliminary Net Sheet This is basically telling the bank how much money they will make after the closing of the home and how much it can expect to make everything is dealt with. Finding homes that have sold recently, their square footage and the area where they are located is very important. The homes that have sold are good reference points because this will show if the market is healthy in the area of your home. Hardship Letter This is a letter that lets the bank know all of the hardships that you are going through to let them know that you are not just putting on a show and trying to get rid of the house. You should make the letter sympathetic, and put in a lot of details of what is happening and why you are no longer able to pay the lien. Proof of Income and Assets Banks will want to see proof of income or any other thing that is an asset. This is because banks want to see that what you are saying is true and verify that you are indeed in a crisis and not just trying to leave the home and not take care of your bills. Copies of Bank Statements Make sure that you bring copies of your bank statements with you, when you first go to the bank to discuss a Short Sale. This will provide evidence that you are in fact in financial trouble and not just saying that you are. It will also show any lapses in anything leading up to you wanting to do this. Market Analysis After you get your Short Sale approved and all of the paperwork is signed it is time to find some good houses on the market that have sold to give the bank a good estimate of what the house should go for and a price that is not to out of line for the area of the home. Purchase Agreement & Listing Agreement After everything is agreed upon, you will essentially give the keys to your bank and it becomes their house. The bank will handle everything until they sell the home. In the beginning when you first bought your home you never thought this would happen. While there are other options, when you are unable to make your home payment, the Short Sale option remains the best. This is because you are essentially selling the home and at the same time working with the bank to keep it from going into foreclosure. To learn more about Short Sales Real Estate Short Sale Definition | Investopedia. (2010). Retrieved July 06, 2016, from http://www.investopedia.com/terms/r/real-estate-short-sale.asp Tips for a Successful Short Sale. (n.d.). Retrieved July 06, 2016, from http://homebuying.about.com/od/4closureshortsales/a/shortsalebasics.htm Contributed by James Link SetSchedule has changed the way real estate marketing is viewed, by changing the way REALTORS® access clients and listing appointments. SetSchedule is a “first of its’ kind” exclusive membership based model that provides verified appointments, marketing tools, and elite invite only networking events for its members. By blending new technologies, and thought processes with proven success methods SetSchedule had incurred record producing results unseen in the industry.
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