Short Sales

A short sale is a home that is on the market for a price that is below the mortgage amount currently owed. A short sale is usually caused by the seller's inability to pay his current mortgage but the home's value has fallen below the amount owed. A short sale must be approved by the lender who currently holds the mortgage. Not all short sales are approved, if the seller cannot show financial hardship and is found to be able to pay the current mortgage payment (or a reconfigured payment) the bank is not going to take less money then is owed. The purpose of a short sale is not to allow the seller to recoup value lost in the home but a way for the bank to avoid a foreclosure proceeding.

The first thing a homeowner must do before listing his home is to contact his lender. There is a large amount of paperwork required by the bank, they will ask for your last 2 years income tax returns, your last 4 pay stubs, a hardship letter, bank statements for at least 6 months, an accounting of all money you owe and a list of your monthly expenses. If any of these are not submitted or, if the numbers don't add up you will be denied the opportunity to sell short. When calling your lender DO NOT call the customer service department or the collection department, these people are paid to collect money they do not want to help you, ask for the loss mitigation department, if you receive voice mail leave a message, but continue to call, nothing can be done until the loss mitigation department reviews your documents so be a pest, don't wait for a call back.

You may be contacted by people who call themselves "short-sale negotiators", you don't need them and they will ask you to pay them. What you need to sell your home short is a Real Estate Agent who is experienced in short sales and a real estate attorney who has worked short sales. Do No Pay Anyone but your attorney , the real estate agent is paid at closing through the proceeds of the short sale and the attorney will probably ask for a retainer up front but will attempt to be paid out of the proceeds of the sale. Most attorney's have a set fee they charge and you can ask what that is before you start working with them.