Foreclosure pending, divorce, job transfer, distressed property whatever the reason many homeowners find themselves upside down owing more than the home is currently worth when closing costs are factored in.

What are your options in this time of trouble? One may be a short sale!

What is a short sale?
A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers' mortgage obligations and closing costs, such as property taxes, transfer taxes, real estate commission.

Causes : Flat or falling home prices, home-equity credit lines, 100-percent financing that sucked out equity, and spiking interest rates on adjustable mortgages.

Steps: a. Get the lender involved as soon as possible
b. BE sure to contact the bank's loss mitigation dept, not the collection or customer service department. Finding the decision maker is often one of the biggest initial challenges in a short sale.
c. Submit sellers' submission package: w-2 form, letter of unemployed, bank statements, two years tax return, other financial documents out ling income and debt obligations. Sales comps or a broker price opinion showing estimate of value,
‘Hardship letter"
d. Sales offer on the home
e. Process can take from two weeks to 60 days to receive an approval of a short sale from the lender

Only do a short sale if the lender is willing to release the deficiency!
Get it in writing that the sale is payment in full with no recourse
Short Sale Checklists

1. Call the lender
2. Submit Letter of Authorization
3. Preliminary Net Sheet
4. Hardship letter
5. Proof of income and assets
6. copies of bank statement
7. Comparative Market Analysis
8. Purchase Agreement & Listing Agreement