It seems that everyone knows someone who is facing losing their home to foreclosure. I guess you can say that if you know somebody in foreclosure, the chances are their neighbor has told them that a short sale as the way to avoid losing the home to foreclosure.
While short sales can help homeowners avoid losing their home to foreclosure, it is a very complex procedure and one that should not be taken lightly by someone who is not educated about short sales.
If you are a homeowner who is facing foreclosure, a short sale may might be for you. However you will need to be open, honest diligent, cooperative and you must comprehend that the following 5 tips are vital to your short sale being approved by the bank:
1. While you may be able in some instance to convince a bank to work with you, the smart homeowner knows that they are not an expert and should let the authority in the market handle the short sale. Whether an experienced real estate agent, title processor or attorney, make sure the person coordinating your short sale really has experience in regards to the short sale process.
2. Make sure you stay actively involved and you cooperate fully with the timely submission of forms and other paperwork as may be needed by the lender. This includes that you, not your agent or advisor, but YOU write a clear and compelling Hardship Letter. Having someone else write your hardship letter may be the reason that your short sale request will be turned down.
3. Make sure you know what is expected of you. The bank is going to want a comprehensive short sale package and that more than likely include a full financial forensic picture complete with bank accounts, tax returns and more. Your omission to give the bank this information may get your short sale request rejected.
4. The bank made a loan to you and they have the right to collect. You have the responsibility to disclose your assets and to liquidate them to reduce what you owe them. You cant expect to take less while you are cruising around town in your Porsche. Thats just not right. You must be ready to demonstrate a reason you are unable to pay them back (i.e. show a hardship).
5. Make sure you dont dilly dally until its too late before you request a short sale. Most borrowers dont do anything or simply wait to long to act. No real estate agent or lawyer is a magician. They need time to make the short sale work. If you want to save yourself from enduring a foreclosure on your house then you must get on the ball.
Short sales can take as long as 6 months to get accepted. These are just 5 simple strategies you can implement to give your short sale request the best chance for approval. This is not an easy process for lender or homeowner and your ongoing cooperation can mean the difference between a successful short sale or your home being sold at the Courthouse steps.
Whatever you do, take some action. If you want to try to effect a short sale on your own, some banks are now letting homeowners do just that. If you want to learn more about how short sales should be correctly completed please visit our short sale information resource center for videos and tips as to how to successfully complete a short sale.
By understanding the short sale process you will be better prepared to talk about things with your lender and you’ll be more tuned in to spot inadequacies and shortcomings with any Realtor that you may choose to hire to handle your short sale for you.
If you’re a Realtor reading this, you too may want to check out our short sale information. It will help you learn how to successfully execute short sales and generate higher commissions.
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