If you need to sell your home and you the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won't cover your total mortgage obligation and closing costs, and you don't have other sources of money to cover the deficiency.  As of today, June 3, 2009, there are over 600 condos and homes for sale in Riverside California that are being sold as short sales.

1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties, first contact your lender about a possible loan modification and don’t try just once – be persistent – keep calling if they say no. When a loan modification still isn’t enough to get you out of financial trouble or the bank won’t agree to it, a short sale may be your best option if you can meet these three criteria:

• Your property is worth less than what  you owe on it.
• You have a financial hardship, such as a job loss , divorce or major medical bills.
• You have contacted your lender and it is willing to consider a short sale.

2. Hire a qualified Realtor. The first step to a short sale is to hire a qualified real estate professional.  The Pedersen Team has  experience in successfully handling short sales and can discuss if this may be a good option for you.  It is very important that you consult your tax consultant before you decide to do a short sale.  There may be significant tax obbligations that make doing a short sale not in your best interest. 

3. Begin gathering documentation for your short sale package before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. This information is submitted along with an offer usually must include: 

• A hardship letter detailing your financial situation and why you need the short sale
• A copy of the purchase contract and listing agreement
• Proof of your income and assets
• Copies of your federal income tax returns for the past two years

4. Prepare for a long waiting period.  Waiting for your lender’s review of the short-sale package can take several weeks to months.

This is the nut-shell version of short sales.  There are many people going through the short sale process right now in Riverside.  Short sales are a much better option than foreclosure for most people.  We can help answer questions that you have about short sales.

Want to know how many foreclosures, short sales and traditional listings there are in Riverside? Click here.

Written and posted by: Vicki Pedersen, ABR, ASP, Pedersen Real Estate, Riverside/Corona, California, 951-840-5212  vicki@pedersen-team.com     Visit my website.