If you are a homeowner having trouble making your mortgage payments or you will soon have trouble making your mortgage payments a short sale may be the answer for you.
So how do you know if you are qualified for a short sale? Many people will tell you, “If you owe more than your home is worth and you want to sell your home then you are a short sale candidate”. Those two qualifications definitely apply however there are three major qualifications you must meet in order for the bank to consider you for a short sale. They are: #1 Financial Hardship, #2 Insolvency, #3 Monthly Income Shortfall. If these apply to you, you may qualify for a short sale.
Here is a list of items needed to get started. It is important to get these items to us upfront while waiting for your home to go into contract. That way once an offer is accepted we will have everything the bank will need to expedite the short sale negotiations. If updated items are needed we will contact you immediately so there are no delays.
- Authorization letter to allow a licensed Realtor® to act on your behalf.
- One Page Handwritten Hardship Letter
- Financial Statement of expenses (some lenders have specific form)
- Most recent 2 years tax returns and all schedules
- All W-2’s and/or 1099’s
- Most recent 2 months paystubs
- Most recent 3 months bank statements (all pages, even if blank)
- Current mortgage statements of all existing mortgages
- HOA information (if applicable)
- Any additional lien information
We ask that you keep Home Owners Association’s (HOA) and utilities current so that there are not additional liens that can prevent a successful short sale. The bank will typically not pay any fines, delinquent fees or HOA transfer fees. These are required to be paid for by the Seller of a property in any transaction. The reason behind this is HOA fines and fees can accumulate quickly and the lender is unwilling to pay these fees. The Seller is also responsible, by law, to supply the Buyer with a HOA package which can typically cost anywhere from fifty to two-hundred dollars and is paid directly to the HOA management company.
Please note, negotiating your short sale by our team of licensed Realtor’s® is at NO CHARGE to you! The homeowner does not pay our commissions. Realtor® commissions are paid from of the banks proceeds from the sale.
Is a Short Sale better than a Foreclosure? To find the answers watch this video. It will review five criteria’s for comparison.
- Ability to obtain a mortgage in the future
- Effect on credit score and credit history
- Security clearances in a variety of industries
- Current and future employment
- Deficiency Judgment
Anyone deciding between a short sale or foreclosure should seek legal and professional tax advice for the knowledge of the advantages and disadvantages.