Short Sale

What is a short sale?

A short occurs when a negotiation between the owner and lender have taken place and the lender has agreed to accept an amount that is less than the amount owed on the home. This helps the lender by not and having to possibly sell the property for less, and helps the owner for not having to go into foreclosure. A short sale will still affect the owner’s credit but not as much as a foreclosure. This option gives the sellers their equity.

In short sales, buyers can get a home at a better rate. Buyers who go the option of purchasing a short sale may have extra paperwork to do and will also have to be willing to possibly buy a property that needs upgrades that can range from large to minor repairs. They may also have to pay extra costs. In a short sale transaction, seller’s closing costs are usually paid out of the money the buyer brings to the closing.

How can I do a short sale?

The first thing you should do is contact your lender if you are behind on your payments to see what your options are. The next thing is contact a realtor who can help you with the process. A realtor can bring buyers to the table and help with documentation and facilitate a smooth transaction. Both buyers and sellers of a short sale should have a real estate agent to help with the transaction as there are many legalities and documents that you will be required to be completed such as proof of financial burden, letters explaining why the owner cannot maintain the mortgage payments, bank statements, tax returns, and other documentation may also be required.

What are other options available to me instead of doing a short sale?

If you are thinking of selling your home in a short sale, first consider a mortgage loan modification, or possibly refinancing if you can find a willing lender; if these two options are not available to you then consider a short sale.