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Is a "Short Sale" Right For You?

Putting your home on the market as a short sale is not an easy decision.  To define "short sale", it is selling your home for less than your mortgage obligation.  It can be a difficult and long process.  In many cases, it may be the right decision, one that allows you to get out from under a difficult situation.

If you qualify for and are successful at selling as a short sale, you avoid a foreclosure on your record and may be able to purchase another home in 24 months.  With a foreclosure, it may be at least 60 months plus you need a higher minimum credit score to obtain that next mortgage.

Step 1 - Get Educated

I always recommend you consult with an attorney.  A short sale may be the best option for you (and your lender) when you cannot make the mortgage payments.  Many lenders are working with sellers to complete the short sale but not all of them.  You need to know your options. 

Whether it is a short sale, deed in lieu, or bankruptcy, an attorney can give you the best legal advice.

Step 2 – Get Some Help

Find an experienced real estate agent who has done a short sale.  Your real estate agent should be fully educated and certified in this lengthy, difficult process and will be able to work directly with your lender on your behalf.  An experienced short sale agent will give you a much better chance of successfully short selling your home.

Since there may be so many different entities involved in a mortgage (1st mortgage, 2nd mortgage, the investor on the loan, etc.) you really do not want to do this on your own, without the professional experience.  Also, you will not have any out-of-pocket expenses to pay an agent.  The agent is paid by the lender.

Step 3 – Get Started Now

The longer you wait to get started with the short sale process the less chance you have of success.  Each state has different foreclosure laws.  You need to decide quickly to start the short sale process if you are getting behind on your payments, or have already received a notice of default.

Step 4 – Follow Instructions Exactly

An experienced short sale agent will tell you what you need to do to get the house ready to sell.  An experienced agent will recommend a listing price based on the current market.  If the agent wants to set a low price on the house, there is a reason behind that.  It may be based on information obtained by your lender who may have already completed a BPO (broker's price opinion), similar to an appraisal.

Due to the time constraints, some buyers do not want to complete the long closing process or changes to the agreement.  It may take 30 days minimum before a lender responds to an offer so it is very important that all instructions, especially the lenders, are followed exactly.  Time is of the essence in many cases.

Step 5 – Know The Tax Implications

Congress recently passed and the President signed a law that in many cases releases homeowners from any tax implications of a short sale.  Talk to a qualified tax attorney or CPA about this for your particular situation. 

Step 6 – Prepare to move quickly

Although you may have to wait 45-60 days before you receive approval for your short sale, be prepared to move quickly once approved.  Have a plan of action.

Step 7 – Prepare yourself emotionally

If you are already in default or have a foreclosure pending, you already know emotions are running high and the short sale process can be emotionally draining.  You will receive solicitations from everyone, including those that ask for money upfront and they will solve your problems.  NEVER pay someone money upfront!

Have people in your life to talk to about your situation.  You are not alone.  You will need a support network to help you through this already difficult time in your life.  By reading this, you are being proactive and everything will work out.  It will not be easy, but remember, you are not alone.  Many homeowners, for one reason or another, are going through the same thing right now.

Call an experienced short sale agent now!

Email Karen Branham:  karen.branham@cbunited.com

Karen's mobile:  850-832-8626