Short Sale Question and Answers
What is a Short Sale?
A Short sale happens when a homeowner is forced to sell their home due to some kind of financial hardship, which has caused them to no longer be able to stay obligated to their monthly mortgage payments, and in turn has to seek the approval of their lender to sell their home under market value because the home is no longer worth what it once was. A lender in more cases then non will opt for a short sale vs a foreclosure because of the costly affects from a foreclosure.
How do you qualify for a Short Sale?
Qualifying for a short sale consists of having a valid hardship and the documentation to back it up. Examples of some typically accepted hardships may be:
Loss of Employment
Death or illness of a family member
Relocation or job transfer
Divorce or Separation
Unexpected home repairs you cannot afford
These are only a few ideas of what may be accepted, it is always wise to seek out an experienced Short Sale Specialist Realtor to better assist you in getting started in your short sale.
What will my lender ask me to provide before I can qualify for a Short Sale?
After validating your hardship, your lender will ask you to provide a hardship letter, as well as a bundle of documents to back up your hardship. Keep in mind that lenders vary on their expectations as far as proof of the hardship. Your cluster of paperwork will be made up to be called a short sale package. Examples of what you will need in this package are as followed:
Letter of Authorization
Preliminary net sheet
Copies of bank statements
Comparative Market Analysis
It is incredibly important to make sure each document has your name, date and loan number applied. If ever the short sale package was to be misplaced or even a single piece of paper, your short sale could be delayed, if not, rejected.
How is a Short Sale beneficial to me?
A short sale has a lot more pro's to it, rather than cons. Rather than a foreclosure leaving you unable to apply for any loans for up to seven years and deteriorating your credit score, a short sale will simply recover within two years. Two years is a great amount of time to become re-established and apply for that home loan and start living the life you have always worked so hard for. It is also better to avoid a foreclosure and opt for a short sale because it will also save you from the humility of having your home auctioned off right in front of all of your neighbors, family and friends the way a foreclosure would. When you opt for a short sale, it will not be broadcasted across your door that you are selling your home because you can no longer afford it. Another great reason to do a short sale is that our services to you are 100% FREE! Although you will not be able to collect on your home once it is sold, you will not be required to put fourth any money for our services during your short sale and after the successful short sale. Not only will you acquire our free services, but programs like the Home Affordable Foreclosure Alternative Program will offer you, the homeowner, $3,000 CASH BACK towards your relocation!
How much work is involved in the short sale process for me?
In order to get the short sale process started, you will be asked to obtain all of your financial documents and write your hardship letter. With the help of an experienced short sale specialist this will be an easy task. Once you have gotten together your short sale package, it will be in the agents hands to do all negotiating and marketing your home.
How will a Short Sale affect my credit?
The nice thing about short sales is that the only real damage your credit score will face, is due to missed mortgage payments. After the completion on the short sale, your credit will read "paid in full" or "settled as negotiated" those sound a lot better than foreclosure. A foreclosure will put a hold on your future for almost seven years by preventing you from qualifying for any future loans, while a short sale will recover in two years.
How do I find the right Realtor to Short Sale my home?
When you are searching for a Realtor to assist you with your short sale, make sure they are a Short Sale Specialist Realtor. There are Realtors who will tell you they know how to do a short sale but really, you need experience not just someone who has taken a class. When you are choosing your short sale specialist, make sure they have a record amount of completed short sales as well as the proof to provide. Our agents have closed many short sales and are looking forward to successfully completing yours! Contact us right away!
Ask a local short sale specialist!