5 Tips For Short Sale Success

5 Tips For Short Sale Success

Learning about the 5 tips for short sale success can be highly beneficial for distressed homeowners facing foreclosure. A short sale can be an immensely valuable alternative to foreclosure whereby a home in the foreclosure process may be sold for less than the remaining balance on the mortgage.

This can be a smart choice for mortgage lenders since they may avoid the high cost associated with going through with the foreclosure process. Homeowners may benefit by avoiding the negative effects of foreclosure. The process can be time consuming and confusing however so homeowners should consider learning as much as possible about the 5 tips for short sale success.

5 Tips For Short Sale Success – Tip 1

This first tip of the 5 tips for short sale success focuses on educating homeowners prior to pursuing what can be a time consuming and complicated endeavor.

Enlist the help of an experienced foreclosure defense attorney.

Many foreclosure defense attorneys are intimately familiar with the foreclosure process, negotiating with mortgage lenders and finding favorable alternatives to foreclosure. These attorneys may help by evaluating a homeowner’s situation and determining if a short sale is the right foreclosure defense option to pursue. Next, these attorneys can help coordinate with the bank/mortgage lender and help homeowners avoid potential tax consequences. It can be wise for distressed homeowners to find a foreclosure defense attorney in their area offering free consultations to discuss their situation and a potential short sale.

5 Tips For Short Sale Success – Tip 2

The second tip of the 5 tips for short sale success focuses on helping homeowners understand the implications of a short sale.

Be aware of potential short sale consequences.

When a home sells at a short sale, the home may be sold for less than the remaining balance on the mortgage so mortgage lenders may take a financial loss on the mortgage loan. Because there is an unpaid debt on the loan, mortgage lenders may file a deficiency judgment lawsuit in order to recover the unpaid debt. There can be ways to avoid a deficiency judgment however by negotiating with mortgage lenders. Additionally, there may be programs under the Home Affordable Foreclosure Alternatives (HAFA) to help homeowners avoid a deficiency judgment.

5 Tips For Short Sale Success – Tip 3

The third tip of the 5 tips for short sale success focuses on helping homeowners have the best opportunity at getting approved for a short sale from their lender.

Determine the true value of the property.

With short sales, homeowners are generally trying to sell the home as fast as possible and mortgage lenders are trying to get the most amount of profit as possible. For this reason, some mortgage lenders may deny short sale requests believing homeowners did not perform their due diligence in the sale of the home. It can be a smart idea to get an independent real estate professional or independent appraiser to appraise the value of the home. This can help homeowners prove to their mortgage lenders they listed the property at an appropriate price.

5 Tips For Short Sale Success – Tip 4

The fourth tip of the 5 tips for short sale success focuses on helping homeowners sell the home for an amount mortgage lenders will be satisfied with.

Sell the home for the best price possible.

After getting the home appraised by a real estate professional or independent appraiser, it is usually the time to list the home for sale. A good starting price may be slightly above the appraised value. This demonstrates to the mortgage lender that the homeowner is trying to achieve the best selling price possible. Consider lowering the selling price at pre-determined intervals until the home sells.

5 Tips For Short Sale Success – Tip 5

The fifth and final tip of the 5 tips for short sale success focuses on helping homeowners to finalize the short sale process in order to seek approval from mortgage lenders.

Prepare and review your short sale package prior to submission to mortgage lenders.

Homeowners are typically required to apply for short sale approval by submitting a short sale package to their mortgage lenders. There are often many required documents mortgage lenders will want to see in the short sale package, so it is often a smart idea to consult with the mortgage lender first about the required documents they will want to see. Commonly required documents in the short sale package may include:

  • Two years of W2 statements
  • 3 Monthly bank statements
  • Current monthly budget
  • All mortgages with account numbers
  • 1 Month of pay stubs
  • A hardship letter