For homeowners who can no longer afford to keep up with mortgage payments and want to avoid foreclosure or bankruptcy, there are alternatives. One such alternative is called a short sale. A short sale is an agreement between a lender and the borrower to accept less than the total amount owed as a payoff. Because the transaction does represent a loss, often a sizeable one, there is a detailed approval process. A qualified realtor with short sale experience may help make this process easier.
Although a short sale may be more advantageous than foreclosure, there can be drawbacks. It is always recommended for the homeowner to consult a competent real estate lawyer and accountant to discuss possible tax ramifications.
A reliable realtor with short sale experience can walk you through the following steps:
1. Calling the Lender. This can be a tedious process taking several phone calls. Make sure to talk to a supervisor and get a name and phone number of someone capable of making decisions.
2. Submitting a Letter of Authorization. A lender is better able to communicate with interested parties, such as realtors, title companies and or attorneys if they receive a letter of authorization. Make sure to ask, but it should include your property address, loan number, name, date and interested parties names and contact information.
3. Preliminary Net Sheet. Your realtor will be able to help you with this.
4. Hardship Letter. This describes your hardship and how you are unable to satisfy the current payments.
5. Proof of Income and Assets. This may include information regarding stock accounts, savings accounts, cash or other real estate.
6. Copies of Bank Statements.
7. Comparative Marketing Analysis. This includes information such as active homes on the market, pending sales and homes sold in the last 6 months. Click here if you are interested in having one performed for you.
8. Purchase/Listing Agreement. Once you reach an agreement, the lender will want a copy of the offer, along with a copy of your listing agreement.
Please click here if you would like to be contacted for further information and a confidential consultation with an experienced short sales real estate agent.
