Short sales can be a great way for a homeowner who can no longer afford their home to get out on the other side without damaging their credit. However, few people are familiar with how this type of sale works and why lenders would allow anyone to pay for a mortgage with less than enough money. To know if you are a candidate for a short sale, it is important to understand how the process works.
To even consider a short sale, you must be behind on your payments and be unable to remedy the situation in any other way. Most banks will ask you to try to sell your house at full price or try to refinance or restructure your loan in an attempt to keep your house. However, if you have tried everything possible and are still facing foreclosure on your home, the first step is to contact your lender directly and explain the situation.
Once you contact your lender, they will most likely require you to submit a letter of financial hardship. Short sales are not something lenders take lightly. You must show your lender why you can no longer make your payments. This may include showing a loss of income or an increase in bills, especially medical bills. They will most likely ask for copies of pay stubs, bank statements, and proof of any other income or assets. His lender wants to know that he did everything he could to keep his house, but he couldn’t. Provide everything they want as quickly as possible to speed up the process.
After your lender decides that you are a candidate for a short sale, they will send a real estate agent to your home to assess the value. This appraisal will tell the lender how much your home is worth and an idea of how much they can expect to get from the sale of the home. Once this assessment is complete, you can move forward with the sale, keeping the lender informed of where you are in the process.
Being familiar with short selling and how it works can help you decide if this option is right for you. It is important that you work closely with your lender, providing all required documentation and cooperating with sales efforts. The faster the sale is completed, the faster the bank will get your money and you can get on with your life.
