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Short Sale Information

Short Sale Articles

Short Sale Process

A short sale can stop the foreclosure clock and buy you time to get back on track, but it’s not a free resource—you still have to do your part to make sure it works out. Part of it is understanding the whole short sale process, from the first phone call up to closing day. If you’re planning a short sale but aren’t sure how it works, read on for a quick step-by-step guide.

1) Call Your Lender.
Before calling anyone else, such as a short sale company, get in touch with your lender to get specific short sale information. Among the questions you should ask are which papers you need to provide, how much time a short sale usually takes, and what you have to do to get started.

2) Submit An Authorization Letter.
Before you can put the home on sale, your bank will want a written authorization to give out mortgage data. This letter states that you are allowing the bank to release information about the loan and the property to third parties, such as an escrow agency or a potential buyer.

3) Write a Hardship Letter.
The hardship letter explains the financial difficulties that caused you to default and justifies your request for a short sale. Back up the letter with documents that can prove your claims, such as bank statements, pay stubs, investment accounts, and tax forms.

4) Wait For Approval.
Your lender will then review the settlement statement, where the selling price is proposed and all related expenses are listed down. This will include your remaining loan balance, real estate commissions, and other costs associated with the short sale process. They may also contact a broker for a price opinion based on the home’s condition and sales data on similar properties.

5) Put Your Home On The Market.
Once your lender approves your request, you can start the actual short sale process. An experienced real estate agent can help you sell faster with marketing and networking resources, as well as provide short sale information to make sure you get a good deal. He or she can also help you evaluate buyers and negotiate purchase conditions if necessary.

6) Complete The Sale.
When you’ve found a willing buyer, you draw up a purchase agreement and submit it to your lender, who will then go over it and make sure all the costs meet their requirements. Once it’s approved, you set a closing date and turn over ownership of your home.

The short sale process can vary from a few weeks to several months, so it’s best to act early. Arm yourself with practical short sale information, work with competent professionals, and start working your way to a successful short sale now.