What is a Short Sale?

A Short Sale, also called a "Short Pay" or "Pay Off" is a process in which a lender agrees to receive a lower amount of an owed debt in exchange for the sale of the property to a third party usually at no cost to the borrower.
 
Why a Short Sale?
 
There are many ways to lose a home when the homeowner is in financial troubles. Losing a home through foreclosure or bankruptcy often times destroys credit, embarrasses the family, and strips an owner of dignity. For owners who can no longer afford to continue making mortgage payments, there are alternatives to bankruptcy or foreclosure actions. A Short Sale is one of those options. When lenders agree to do a Short Sale, it means the lender is accepting less than the total amount due. This option has many advantages over foreclosures or bankruptcy as discussed below.
 
What is hardship?
 
A hardship is a life changing situation that affects the borrower dramatically and results in an inability to pay the mortgage debt. Some examples of hardship include separation or divorce, medical bills, inability to work due to health reasons or illness, death of a spouse, job relocation, reduced income or unemployment, business failure, unemployment, reduced income, too much debt, payment increase, damage to property, incarceration.
 
How do I qualify for a hardship and Short Sale?
 
Since banks must approve a Short Sale, the requirements to qualify for a Short Sale vary. To qualify the owner must be able to prove that they are experiencing an acceptable hardship. The lender must be willing to accept the Short Sale proceeds as settlement of the debt.
 
To determine the exact requirements, one must speak with the appropriate person at the bank. Thus, it is best to involve an experienced Short Sale professional to speak with the bank concerning your particular circumstances.
 
What should I do to increase the chances of a Short Sale?
 
There are several things you can do to help increase the chances that your bank will agree to a Short Sale of your home. The following are just a few:
  1. Prepare the necessary documentation including 2 years tax returns, current paycheck stubs, unemployment benefit statement (if unemployed), last two bank statements.
  2. Sign a listing agreement with a knowledgeable short sale realtor.
  3. List the property for sale.
  4. Cooperate with access, showings, offers, and realtor.
  5. Vacate the home at the close of escrow.
  6. Be responsible to maintain the home in "show" condition.
  7. Cooperate with bank and bank negotiators and provide all requested documentation.
 


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Foreclosure:
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      •        The 7 Most Common Short Sale Pitfalls
      •        The 7 Most Dangerous Short Sale Myths
      •         Options and Solutions For Homeowners In Foreclosure
      •         3 Must Have Qualifications For a Short Sale Homeowner
      •         Foreclosure vs. Short Sale Homeowner Consequences

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Steve & Victoria
Gore & Associates
CRS, GRI, ABR, CLHMS, e-Certified, REPS, CDPE
Keller Williams Realty
13400 Sabre Springs Parkway, Suite 100
San Diego, CA 92128
Phone: (858) 229-9939
Fax: (858) 413-2127
License No.: 01343193, 01337036
Email: Steve@sdAvoidForeclosureNow.com
Email: Victoria@sdAvoidForeclosureNow