A short sale is an agreement between a seller and their lender(s) to accept a sale price that is less than the amount they owe on their property.
Can anybody short sale their property? Yes, if they qualify. It is common practice for the lender(s) to require the homeowner to prove they have suffered a financial hardship that prevents them from being able to meet their obligation. Most lenders have a loss mitigation department that evaluates the short sale request for approval. The process typically includes a review of your specific situation and an independent valuation of the property by obtaining a appraisal or Broker Price Opinion. You should be prepared to provide the following items:
Letter of Authorization - If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving them permission to talk with the specific parties about your loan.
Hardship Letter - This statement of facts describes how you got into a financial bind and makes a plea to the lender to accept less than full payment.
Proof of Income and Assets - Lenders want to verify your inability to meet your obligation.
Copies of Bank Statements - If your bank statements reflect unidentified large deposits or withdrawals, you should be prepared to explain these items.
Purchase & Listing Agreement - The lender will want a copy of both agreements
Settlement Statement - The lender will require a breakdown of all costs and fees associated with the transaction in order to determine how much you are requesting them to discount the lien(s).
Why would someone consider a short sale? A short sale is often used as an alternative to foreclosure, which mitigates additional fees and costs to both the lender(s) and homeowner. If you are facing foreclosure, it is far more likely that you will find yourself in a position to buy another home quicker with a short sale on your credit report versus a foreclosure.
Can I get money for completing a short sale? In a lot of cases, the answer is yes. Depending on the type of short sale an individual will qualify for and the cooperation with the short selling lender it is very possible a lender will offer you as much as $3,000 in a relocation incentive.
Are there risks associated with a short sale? Yes and we highly recommend you hire an experienced agent for handling your short sale. Aside from the negative impact a short sale may have on your credit report you need to be aware of any potential tax or deficiency issues. You need to obtain up to date information from multiple professionals, including an accountant, an attorney, and a real estate broker
Why should I hire Desert North Realty to handle my short sale? The agents at Desert North Realty are educated and trained to handle the nuances of the short sales process. Even though we have closed numerous successful short sales, Desert North Realty continues to educate their agents to keep them up-to-date on all of the new policies and changes in this niche. We feel so strongly about consulting an attorney and tax professional about the potential pitfalls of a short sale that we have hired, at our cost, Hawkes Law Firm to consult each of our clients on their specific situation.