5 Tips for Successfully Selling Your Home in a Short Sale

Written By:

Is It Still a Good Time to Buy a Home?

How to Sell Your Home in a Short Sale

Selling your home in a short sale is one way to avoid foreclosure. If you’re considering a short sale, then you’re working out an arrangement with your lender to sell the home for less than the amount you owe on the mortgage. Since you’re unlikely an expert at conducting a short sale, there are some tips you should follow to ensure its success:

Know the Mortgage Balance(s)

First, you need to know the total balance of any mortgages or liens you have on the property. Each lender that has a stake in the home has to approve a short sale. If you only have one mortgage or your mortgages are with the same lender, then you only need that lender’s approval. The lender will set the amount it’s willing to let the home sell for because it’s the one that will be losing money on the payoff amount.

Assemble a Short Sale Team

When you sell your home in a short sale, you should assemble a team of professionals to help walk you through the process. First, hire a real estate agent that specializes in short sales, then a real estate attorney and a tax consultant. The reason you want to choose a real estate agent with short sale experience is because it’s a different process than a traditional real estate sale. You want someone who knows what they’re doing and has a successful track record with negotiating and working with the banks and mortgage lenders.

[Mortgage Help: Get your free credit report and see if your credit score is mortgage qualified]

Prepare Your Documents

[Mortgage Help: Get your free credit report and see if your credit score is mortgage qualified]

A short sale is not a guarantee. Again, the lender has to approve one before you can sell your house for less than what you owe on it. This entails putting together a proposal to convince your lender that this is the best way to go. It also requires you to gather your financial documents and write a letter that explains the financial hardship that has put you in the situation to ask for a short sale. This is where the team of experts come in handy because they know precisely how to put this package together. You, however, have to provide the information and documents they need to help you present your case.

Be Patient

Once you submit the request for a short sale, be patient. Especially with the backlog that lenders are experiencing, conducting a short sale can take months to complete. It will take time for the lender to respond with a yes or no to allow the short sale, negotiate the short sale price and find a buyer and complete the sale.

Expect Requests and Demands

Prepare yourself for the worst, but hope for the best. There is typically a lot of back and forth between you, your team of experts and the lender. While working with a team of experts helps to ensure you submit a complete short sale package, the lender might make additional requests and demands. Reply to and submit the information as soon as possible so as not to delay the process.

[Mortgage Help: Get your free credit report and see if your credit score is mortgage qualified]

A short sale might be the right alternative to staying in a home you can’t afford. A short sale is also an alternative to going through the foreclosure process. When you know how to maneuver the process, it can be a much smoother one to navigate.

Related articles: