Short Sale 101 – Who Qualifies for a Short Sale?

Getting bank approval for a Short Sale takes a great deal of time and perseverance to start with. What it requires for qualification goes a bit further.

Who Qualifies for a Short Sale?

1. Borrowers who have a verifiable, legitimate and recent financial hardship. The bank will require a hardship letter that details why the borrower is truly unable to make their payments.
2. Borrowers who do not have assets or other financial means. The bank will take a look at financial records such as tax returns and credit reports to identify any assets that can be sold to pay the payments. Savings accounts, real estate holdings, stocks, bonds and IRA accounts are all considered as assets in the equation.

What is a Hardship?

• Unemployment
• Medical emergency or sudden illness.
• Bankruptcy
• Death
• Divorce

What isn’t a Hardship?

• Poor purchase decisions (living beyond your means) such as owning an expensive car or home theater system.
• Pregnancy.
• Downsizing due to lifestyle changes (the utilities cost too much, etc).
• Buying another home.
• Neighborhood deterioration or other changes.

Basically, the borrower who has truly run into difficult times and must sell their home as a direct result of that difficulty. The bank does not allow much leeway in making the determination and will require a legitimate hardship. It is the burden of the borrower to convince the bank of their situation and to show that they are one of those who qualifies for a short sale.

What Qualifies for a Short Sale?

Now that we know WHO, let’s take a look at what homes qualify for a Short Sale.

Brought to you by:

Danielle "Dee" Baldwin Infinity Group Realty

www.Dee-Baldwin.com

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