Things Needed for a Short Sale

Things Needed for Short Sale

You are unable to keep up with your house payments because of a loss of income. Or you need to move to another town and cannot sell your home for what you owe on it. You have talked to your mortgage company and they do not offer any other options that work for your situation. So now you are thinking that a short sale may be your best option.  So how do you go about this?

First, you need to hire a qualified realtor to list your home as a short sale. The realtor will do a comparative market analysis (CMA) to find a fair price for your home and then will find you a buyer.

Here is what your mortgage company will want you to submit for the short sale:

  • A Letter of Authorization so that your mortgage company can talk to your realtor.
  • The Listing Agreement and Purchase Contract for the sale of the home.  Your realtor will provide this documentation.
  • Estimate HUD 1 Settlement Statement.  This is prepared by the title company and shows all the estimated charges and credits for the home sale.
  • Hardship Documentation.  This is your part. Pay stubs, tax returns, bank statements, bills and a letter explaining your hardship are all included. The more you can show your hardship the better.

Make sure that if there are other liens on the home, they all approve of the short sale also.

Once the mortgage company receives all this documentation with your case number on every piece of paper, they will review it and let you know if they approve of the short sale.  After this approval, the home can be sold and you have escaped foreclosure.

If you are unsure of this will work for you, give me a call and I will assist you with your real estate need.

Is A Short Sale For Me?

So is the short sale something you think would apply to your situation?

First thing to do is to contact your mortgage company to see if there are any options that would allow you to stay in your home.  Most mortgage companies have lots of different programs to help you keep your house.  Some of these are a deed-in-lieu of foreclosure, partial claim, mortgage modification plans, repayment plans and deferment plans.

If your mortgage is owned by Fannnie Mae or Freddie Mac you may be eligible for the Home Affordable  Foreclosure Alternatives (HAFA) program,  This government program is a type of short sale that definitely needs to be checked out.  HAFA helps you avoid a foreclosure so it has a less negative effect on your credit.  Once the sale is complete you do not have to repay any deficiency to the mortgage company and you may even receive $3000 to assist you in relocating.

However, if none of these options work, you may want to sell your home in a  traditional short sale.

Here are some questions the mortgage holder will look at to see if your home qualifies for a short sale:

  • Have you recently had a decrease in income because of a medical situation, divorce or job loss?
  • Do you currently owe more on your home than it is worth?
  • Are you unable to qualify for any options that would allow you to stay in the home?

Remember the goal of the short sale is to avoid having your home foreclosed.  A short sale does affect your credit but not as badly as a foreclosure.

If you think that a short sale would work best for your situation, contact an experienced realtor, such as myself, for more information.