Short Sell Your Home To Avoid Foreclosure: How to Set-up a Short Sale!
No one wants to face a foreclosure, but the situation can arrive in one’s life when he would need to face it. Many of the times, we need to take a loan and in the case of the secured loan, when we fail to make the repayments, the only solution is foreclosure as it lets the lender get his money back. However, as none of the borrower wants to go through foreclosure, he looks for the alternatives. And “short sale” is considered as the best alternative to avoid foreclosure. No doubt that the borrower will still be losing his property and his credit card score will also go down but the consequences will not be as much worse as that of the foreclosure.
So, what is a Short Sale?
In simple, a sale that covers less than the entire value of the mortgage is termed as the short sale. It occurs when a borrower faces the financial distress and sells his property for the price that is less than the amount due on his mortgage. But, you need to get your bank’s or lender’s approval for making a short sale as it will not let him get the remaining amount of the mortgage. There is no surety that whether your lender will give an approval or not but you can convince him by making a few efforts. Once you get the approval, all you need to do is set up a short sale.
How to set up a short sale?
Though setting up a short sale is considered as a difficult procedure, but you can easily manage it by taking care of the few factors. For an instance, you need to be aware of the requirements, the proper procedure and should find a right buyer who will be interested in buying short sale homes. For your convenience, here we are mentioning the procedure that will let you setup your home’s short sale with much ease.
Know the requirements and get prepared
The first step is getting familiar with the requirements i.e. what will make your home eligible for a short sale. Let us tell you that you need to prove to your lender that the amount you owe is more than the value of your home and you will not be able to repay it in any case. It would be better if you can provide him the documents depicting your financial hardships.
Contact your lender and notify him about the short sale
Once you are sure that you meet the requirements, contact your lender and notify him about the short sale. Chances are there that he will offer you the alternatives. But, you should explain him your situation and ask if he is having any standards for the short sale. Also, discuss with him about the amount that he will accept for the short sale.
Hire a real estate agent
Now, hire a real estate agent who would have experience in the short sales. Notify him that you are going to list your home for short sale and ask him for the tips to prepare your home for it. Hiring a real estate agent is much important as they are aware of the latest market trends and have many short sale buyers in their contacts. They can help you to get more and better options. Don’t forget to ask these 10 questions before you hire a real estate agent
Inform your lender about the offer you get
You will start getting offers for your home once you enlist it for the short sale. So, contact your lender when you receive an offer. He will conduct the valuation and appraisal for determining the right price of the house. Either he will accept the offer or will make a counter offer. He can also choose to wait for the next offer.
Get final approval from your lender
Once all the parties- the lender, the buyer and you agree on a price, get the final approval from your lender to sell the house. The lender can take a 30 days period for approving or denying the approval. However, once you get the approval and all the parties are paid, you will be required to sign a closing document.
Some tips for negotiating a short sale
As so many people are involved in the process and a lot of paperwork is required, negotiating a short sale can be difficult for you. Here are some tips that will make the process easier.
Request your lender for a proof of financial hardship or a short sale package
Complete the short sale package given by your lender
Get approval from your lender to put your house for short sale
Seek the help of a real estate agent
Choose a right price for your house while listing it; the amount should be acceptable for your lender
Find the right buyer for your home
Get approval from your lender if the offer you receive meets his requirements
Homestead Road can help you negotiate an acceptable selling price below what you owe, and then buy it right away at that price so you can escape foreclosure and go forward. We buy short sale homes and will make the process extremely easy, fast and seamless for you.
Learn 5 more tips on selling a home before foreclosure