Last week I wrote Avoid Foreclosure with a Short Sale. Now it's time to explain how to do a short sale.
Find an Experienced Realtor®
You will need a Realtor®. But not just any Realtor® but one that is experienced in doing short sales. Shorts sales go through an entirely different process than typical sales. They are also more time consuming and much more demanding. For these reasons many agents avoid dealing with short sales.
Gather your Documents
Before a lender will accept a short sale you must show that you are unable to catch up on your mortgage payments. To do this, they will need financial documentation. Get together your two most recent pay stubs, two most recent bank statements, last year's tax return, and statements from any investments that you have. Have this documentation ready for when you get an offer on your house. Do not send this information to the lender ahead of time; they will not accept it.
Write a Hardship Letter
The lender will want to know what circumstances caused you to fall behind on your mortgage in your own words. Are you going through a divorce? Was there a death in the family? Are you burdened by medical bills? Were you forced to move due to a job transfer?
Give your Realtor® Access to your Lender
Your Realtor® is going to need your authorization to speak to your lender on your behalf. To do so the lender will require a letter from you stating that it is okay for the lender to speak to your agent regarding your loan.
Submit Offers to the Lender
When you receive an offer on your house, you will need to submit it to the lender for their acceptance. It is at this time that your Realtor® will send the financial documentation, hardship letter, and Realtor® authorization letter to the lender. Until the lender accepts an offer, keep your house on the market and seek additional offers. If you get other offers, submit them to the lender as well.
It will generally take six to eight weeks for the lender to accept an offer. Be patient. Lenders are bogged down in foreclosures and short sales right now. Do not call the lender every day asking for a response; it will only irritate the asset manager that is handling the file.
Troy Trumm, Trumm Team - 402-943-9494, Omaha NE