Are you considering a short sale? Here are some basics to get you started.

What is a short sale?

• When a homeowner owes more on their mortgage than their home can sell for in the current market (a.k.a, upside-down), the homeowner can try to avoid foreclosure by negotiating with the lender to accept a "short" payoff.

Are you a candidate for a short sale? Ask yourself this question:

• Do you have a true hardship that is keeping you from making your payments?
• Think job loss, job transfer, illness, or other challenge. Discuss your particular situation with your lender. Loss in value due to market condition does not qualify as hardship.

What do you need to do to prepare for a short sale?

• First, find a Realtor® who is experienced with the short sale process, who knows how to negotiate with banks, and will be your partner to get the transaction closed.
• With the help of your Realtor®, compile your hardship letter and other necessary documentation which comprises the Short Sale Packet.

What goes in your hardship letter?

• In your own words (and in your own handwriting is best), describe the circumstances that have caused you to be unable to make your monthly mortgage payments.
• Be personal and sincere about your situation, and include as much detail as possible. We want them to want to help you.

What goes into the necessary Short Sale documentation packet?

• Proof of income & assets, including:
  • Bank Statements
  • Pay Stubs
  • Assets (investment accounts, stocks, CDs, other properties)
• Proof of hardship, which might include:
  • Bills
  • Unemployment Records
  • Death certificates
  • Divorce papers
• Preliminary net sheet, prepared by your Realtor®, reflecting the price you hope to get, less the cost of the sale. Include a comparative market analysis, prepared by your Realtor®.

Prepare your home for sale

• With the help of your Realtor®, price your house to generate an offer.
• Prepare your home for sale.
• If you do not get showings and/or an offer in the first 2-3 weeks, lower the price.
• Keep lowering the price until you receive an offer.

Submit offer to the bank along with the short sale package

• Your experienced Short Sale Realtor® will take it from here
  • They will submit the package to the bank
  • They will follow up to make sure it has been received
  • They will be assigned an asset manager with whom they will communicate throughout the short sale negotiation
  • If all goes well, the lender will approve the short payoff, and your Realtor will follow the transaction through to a successful close

For more information, contact short sale specialist Noel Crider or visit my website at http://www.viewfromthefoothills.com.