Nowadays, it is not surprising if you have heard of the term short sale especially if you are one of those unfortunate homeowners who is having trouble fulfilling their mortgage obligations. This term actually comes from the simple fact the lender will be paid an amount short of what is due them in mortgage balance.
Typically, there are three parties involved in the short sale transaction: the owner, the buyer and the lender. Of course, most of the time, the owner is represented by a short sale Realtor in order to ensure a smoother and faster transaction.
Since a short sale will require the lender’s approval, you need to make sure that all the required documents will be submitted. Usually, you will need to submit the following: purchase and sale agreement, authorization to release information, bank statements for the last 2 years, tax returns for the last two years, pay stubs for the past two months, completely-filled out financial worksheet, hardship letter (preferably handwritten), and other short sale forms required in your state. Once the lender receives these papers, they will be reviewed and checked for accuracy.
The entire short sale process can take from anywhere between three months to a year, depending on the communication with your lender. It is vital you keep communication lines with the lender and buyer open so that in cases of problems, you will be able to talk to the concerned parties at the soonest possible time and address the issue at once.
Waiting for the approval can be nerve-wracking since it could always go either way. The important thing is to be ready for the outcome. In any case, you will need to look for a new home. You can use the time to look for properties to rent or talk to your relatives and ask for help in looking for a place to live. You have to keep on moving and not waste time wallowing in self pity. The situation maybe unfortunate but it is not hopeless. If you are lucky to get a short sale approval, you will be able to own a home again in a couple of years.
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