Selling Your Home with a Short Sale

Both going through a short sale and a foreclosure are trying experiences to a home owner. If the home owner can no longer pay the mortgage or sell an overpriced house on a bad market he has little choice but to choose facing foreclosure or trying to get the lender to agree to a short sale.

The short sale involves the lender agreeing to accept less money for the amount specified in a legal contract. If it’s to the lenders advantage and the mortgage owner and the new buyer are both qualified the lender might agree to it.

The home owner wanting a short sale will have to have the lender’s permission but also needs to have the house listed through a real estate agent that is willing to work on a short sale, not all are willing, and is knowledgeable in this field. Getting legal advice would not hurt.

Its very easy for everyone to say get a lawyer and a tax accountant but if a person is dead broke it is not easy for a person to accomplish all these necessities. There might be some aid that is either free or low cost especially if the home owner is past the age of sixty. Also there might be a brake in the form of the Mortgage forgiveness Act but the I.R.S. could decide that debt forgiveness is an additional income to be taxed.

Also the lender accepting the short sale can legally pursue the borrower for any difference in the amount of money paid ant that which is owed. Either that or the lender can go after the buyer for it.

Different lenders may have different requirements for documentation, but there are some things they will all have in common. The party asking for the short sale needs to find out who is in charge of short sales and this means the party that will give you permission for the short sale and find out exactly what the qualifications are and what documentation is needed.

A letter giving authorization is needed to reveal personal information to a third party; this information would be the amount loaned, lended, terms, ext. to the real estate agent, investor, speculator or whoever is going to be the third party. The third party needs to know certain information about the loan. In the letter of authorization give the reference number of the loan and the name of the agent that you have chosen to represent you along with his telephone number, address and email.

Your own information must also be given. A hardship letter has to be sent stating why the mortgage payments cannot be met and to be sure to include enough information to prove what you say in the letter is true. Good reasons would be loss of employment from either one or two breadwinners in the household or extreme medical expenses, etc… Let them know if there are tangible assets and be honest but if you have them you probably will not receive the short sale.

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