If you owe on your mortgage than the home is worth, you’re considered”upside down” on your mortgage. For many people, this is not a concern as markets, over time, will correct. If you have to market the home, however, you will want to get approval from the lender to do a short sale and take less for the loan payoff in the event you agreed to at its inception. A short sale is a lengthy, sometimes stressful, process and is best handled by an experienced realtor.
Call your creditor. Explain your situation and your decision to market the home. Even though creditors are under no obligation to agree to a short sale, they generally realize it is in the best interests of everybody involved. Each lender differs, however. Some creditors will deny your petition. The creditor will work with you In case you’ve missed obligations or a payment.
Find a real estate agent experienced in the sale process. Ask friends, relatives, neighbors and co-workers such as referrals. Finding the right broker is the most important step toward a successful short sale, therefore devote the proper quantity of time assessing the agent’s references.
Collect your financial documents. Your broker will collect a short sale package for the creditor that normally comprises a financial statement, the past two years’ tax returns, bank statements from the past three months, pay stubs, the property’s market evaluation, the listing agreement and other documents. It must also include what’s known as a”hardship letter,” which you will have to compose, explaining why you can’t cover the home and why you want to market it. Hardships include loss of employment, illness and death.
As you would for a sale, list the home together with your real estate broker. Your broker will manage all the information.