Short Sale Candidate ?
Amy Paul Realtor Gahanna Ohio

Should I Consider a Short Sale?

For homeowners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of these options is called a “short sale.”

A short sale by definition occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed.

If you’re considering a short sale, please take the following steps:

  1. Contact ME. To find out if you’re a candidate for selling your home via the Short Sale process.  I am highly knowledgeable about short sales and will help you through every step.
  2. Contact Your Lender. Typically you have to talk to someone in the “work out” or “loss mitigation” department, however it may take several calls before you actually speak to someone who can help you.  Have account numbers and your social security number ready.
  3. Submit a Letter of Authorization. The lender will not disclose any of your information to me without authorization.  I will provide this letter for you to sign.
  4. Preliminary Net Sheet. This is an estimated closing statement showing the expected sales price, unpaid loan balance, outstanding payments due, late fees, and real estate commissions.  If your net to seller shows you getting money at closing, you do not need to do a short sale.
  5. Hardship Letter. This is a letter to your lender explaining how you got into the financial bind you’re currently in.   Typical examples are; job loss, medical bills, death in the family, etc.
  6. Proof of Income and Assets. You must be truthful and disclose any assets.  Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value.
  7. Copies of Bank Statements. Lenders will need these once the process is started.  If they show large transfers or withdrawals, those will need to be explained.
  8. Comparative Market Analysis. There are many declining markets based on the current economy.  And this can be part of the reason you cannot sell your home for enough money to pay off your mortgage.  We can provide this information for you, showing comparable active, pending and homes recently sold.
  9. Purchase Agreement & Listing Agreement. The lender will require copies of this documentation and must approve the selling price.  I will act on your behalf as the mediator between your lender and the buyer’s agent.  Be prepared for the lender to negotiate and take an extended amount of time.

Please keep in mind your credit score will be affected, as many lenders require you to be late on your payments.  On average your score can be affected 90 points, vs. a foreclosure which is around 150.  Lenders have the right to come after the seller for the loss or difference of the short they are accepting.  It is a good idea to have an attorney involved.