Short Sale Tips
- Consider loan modification. Your lender may agree to a modification such as : Refinancing your loan at a lower interest rate; providing a new plan of payment.
- Your property is worth less than the total mortgage you owe on it.
- You have financial hardship, such as job loss or major medical bills.
- You have contacted your lender and it is willing entertain a short sale.
- Hire a qualified short sale real estate professional. Short sale experience is important and working knowledge of the short-sale process.
A qualified real estate professional can:
- Provide you with a broker price opinion (BPO) or comparable market analysis (CMA).
- Help you set an appropriate listing price for your home, market the home and get it sold.
- Ease the process of working with your lender or lender(s).
- Negotiate the contract with buyer(s).
- Help you put together a short-sale package to send to your lender(s) for approval. You can't sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyer(s) can get clear title.
- Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short-sale. The short-sale "package" that accompanies any offer typically includes:
- A hardship letter detailing your financial situation and why you need to short-sale.
- Proof of your income and assets.
- Copies of your federal income tax returns for the past two years.
- Prepare buyer(s) who offer for a lengthy waiting period. Even well organized short-sale take month(s) waiting for review and month(s) in review.
- When the bank does respond, it can approve the short-sale, make a counteroffer, or deny the short-sale. The last two actions can lengthen the process or put you bak at square one. (Your real estate professional can work your lender's loss mitigation department on your behalf to prepare the proper documentation.)
- Don't expect a short-sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Keep in mind:
- Any amount of your mortgage that is forgiven by your lender is typically considered income and you may have to pay taxes on that amount. Under temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007-2012. Besure sure to consult your CPA, accountant to see whether you qualify.
- Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short-sale will impact your credit score less than foreclosure and bankruptcy.
- You may be asked by your lender to sign a promissory note. Ask your real estate professional regarding your options.
766 Norbert Dr.
Single Family Home, built in 1949, 3 Bed, 2 Bath, Single story, Swimming pool, Fireplace, Hardwood floors
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