Considering a Short Sale?
In a Short Sale, the Lender agrees to accept a sale for less than the the amount owed on a home.
The California Association of Realtors (CAR), the National Organization of Realtors (NAR) and other Realtor organizations have been working diligently to affect change in the way that Short Sale transactions are handled by banks. Unfortunately, they face an uphill battle with no immediate signs of change. So what does this mean to you?
If you are experiencing difficulty managing your monthly mortgage payment and you would like to sell your home but it’s upside down, speak with a Realtor right away. Your Realtor can speak with the Lender and find out if both you and the property qualify for a Short Sale.
If approved, understand that it will most likely take longer to receive approval on the transaction, and even once approval has been received, it may take the bank longer to respond and do their part to close the transaction.
Be Prepared to Demonstrate Your Needs
Lenders want to know that something has changed in your financial situation to necessitate you being unable to pay your mortgage. Things such as a job loss, divorce, death, for example. In short, they are looking for, and you need to be able to explain, your hardship. You will be asked for:
- Authorization letter if you are using a Realtor to represent you. This letter tells the Lender that you authorize them to discuss personal information about your account with your agent.
- Proof of Income and Assets
- A Hardship Letter
- Bank Statements
- Be honest and forthright. Don’t attempt to hide information. And finally…
If you are in foreclosure, don’t assume that the short sale division of the Lender is in communication with the foreclosure division. You could be in escrow with a Buyer and find your home sold at auction to both your and the short sale division’s surprise. Unfortunately, right now in terms of foreclosures and short sales, often the left hand has no idea what the right hand is doing.
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