WHAT IS A FORECLOSURE SHORT SALE?A successful foreclosure short sale happens when the bank lets you sell your home for less than the loan amount AND also agrees to waive the remaining balance and agrees not to collect what you still owe. Short sales are favored by many homeowners as one of the best foreclosure alternatives and considered by most people at some point as part of their stop foreclosure program and possible foreclosure solution. Whether you have an underwater mortgage or are lucky enough to be involved in a foreclosure lawsuit(or both!), finally getting short sale approval can be a huge weight lifted off your shoulders. If you have an underwater mortgage, like any bad investment it's better to cut your losses than to risk further decline in your home's value. Likewise, if you're in the midst of a foreclosure lawsuit when the lender approves your short sale, pop a cork and start the party because approval of the sale means immediate dismissal of your foreclosure lawsuit! You may be able to find potential buyers by spreading word of your short sale plans to friends and acquaintances or by using a realtor located through a trusted source. There are also many online services for both buyers and sellers of foreclosure properties that are reliable and can be of great assistance for the type of property you're looking to buy or sell. However, there are also a great many con artists and scams online and elsewhere anxious to take advantage of distressed homeowners looking for help. To avoid problems and scammers, only use reliable professionals referred to you by a person or company you trust. The Foreclosure Short Sale ProcessThe foreclosure short sale process can be a long and tedious procedure, but in most situations the benefits outweigh the headaches.Much like a normal sale of your home, the primary objective is to find buyers interested in purchasing your property for as close to the sale price as possible. The similarity ends there, however, as your objective is no longer profiting from the sale but getting an offer close enough to your loan balance to convince the lender to approve your short sale. The other major difference between a short sale and a typical home sale is that the lender will be involved right from the start all the way thru final approval of the sales price which often delays the sale and risks losing your buyer. As a result of the time and complexity involved in the short sale process, you are well advised to hire a realtor with specific experience handling short sales. As we've noted before and continue to stress, it's essential to hire professionals like realtors and others based on referrals from a trusted source or someone who has previously used their services to avoid con artists and scams. Once you find a few realtors to meet with, be sure to ask how many short sales they've handled, how many of the listings actually sold and which major lenders they've successfully worked with. Tips To Get Short Sale ApprovalThere are many things you can do to improve the chances of getting your short sale approved. In fact, by doing a little basic research about your home's current value and learning all you can about the mortgage foreclosure process you'll make a proposal that will be hard to refuse.The biggest hurdle in getting your short sale approved is convincing the lender that its the best outcome for both sides. By confirming that your mortgage is underwater and that you can't afford the monthly payments,the lender will quickly realize there are few if any options and a short sale is much cheaper and easier than a protracted foreclosure lawsuit. To show that your mortgage is underwater, use online services like zillow.com or hire a realtor or appraisal company from a trusted source to get an idea of how much your home is worth based on comparable sales in the area. Once you can show the lender that your mortgage is underwater and by how much, the next step is submitting a package with all of your supporting materials. Banks typically require a hardship letter that explains the nature and cause of your financial problems together with tax returns and recent pay stubs to make sure they're not getting ripped off by people who don't really have financial problems. To help with this important step we have prepared sample hardship letters together with a sample cover letter to send to the lender that will help get your short sale approved. You will find all of our sample letters and materials in our "Documents" section of the website.
Sample Short Sale Cover Letter
Final Note-Talk With A Financial AdviserThere is a chance that the IRS will view the money that your bank agrees to forgive from the short sale as taxable income so its essential to meet with a financial adviser to discuss this matter. Although there are several legal methods to avoid possible tax implications, this issue is best left to a professional financial adviser or accountant. If you don't already have a financial adviser or accountant you're comfortable with, try to find one from a trusted referral source.Return From "Foreclosure Short Sale" to Home Page
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