08 Jul Tips for a Successful Short Sale
Know your Balance
Before you try to tackle the question of whether a short sale is your best option, get informed about the details of your mortgage(s). The steps below might seem simple, but they’re a good place to start.
First, find out how much money who owe to which institution(s). You may have multiple mortgages on your property. You will need to obtain approval from each lender that has a share your property’s debt.
Next, find out the dollar amount you owe on your mortgage(s). Now, if you can estimate a potential short sale price, you can determine if you’ll be able to pay off the balance owed on your mortgage(s).
Understand Potential Consequences of Short Sale
When facing a foreclosure, anyone might be tempted to try to stop their mortgage payments by undergoing a short sale. If you choose to sell your property in a short sale, you are liable for any remaining balance owed on the mortgage after the proceeds from the sale are paid in. Unfortunately, those who choose this option may be surprised by a collection letter months or even years after they’ve sold their property.
Check your state laws for specifics, but most states mandate that a lender be allowed to collect on any remaining mortgage balance after a short sale is completed. This isn’t always the case – and this is why it’s so pivotal as a borrower, you know whether your lender will agree to wave the deficiency or not.
Get Ready for Requests and Demands
Short sale or just sale, the process of selling a property can be long and drawn out. Typically, homeowners need to be in contact with their short sale agent and the lender throughout the process. Sometimes buyers make special requests that need to be cleared with the owner’s lender. Remember that changes are normal during a short sale and handle paperwork and emails as quickly as possible.
Keep Your Buyers Close
It’s a good “gut check” to interview the buyers’ agent to see if the buyer is committed to the deal. Working on getting a short sale approved by the lender can be slow, so it’s common for buyers to lost interest and find other properties while they’re waiting. Consider asking the purchasing agent to provide a promise letter stating that the buyers won’t write offers for any other properties during the short sale approval process. Buyers who do not want to wait for short sale approval should not write offers on short sales.
It’s Never Too Late
In many cases, a short sale isn’t always the best answer. It’s never too late to get informed and understand all of your options when you’re trying to sell your property quickly. Check out some alternatives to short sale in our article How to Deal with a Foreclosure.
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