If you owe more then your home is worth….and you need to sell, then you need to apply for a short sale with your lender.
A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.
The Basics of a Short Sale
Banks grant short sales for 2 reasons: the seller has a hardship, and the seller owes more on the mortgage than the home is worth.
A few examples of a hardship are:
Unemployment / reduced income
Job transfer out of town
The seller will need to prepare a financial package for submission to the short sale bank. Each bank has its own guidelines but — with the exception of Wachovia, which is the best short sale bank in the world — the basic procedure is similar from bank to bank.
The seller’s short sale package will most likely consist of:
1. Letter of authorization, which lets your agent speak to the bank.
2. HUD-1 or preliminary net sheet (HUD-1 is A statement showing the full details of the loan closing, including costs paid by both the buyer and the seller and detailed breakdown of the manner in which the loan proceeds were distributed.)
3. Completed financial statement
4. Seller’s hardship letter
5. 2 years of tax returns
6. 2 years of W-2s
7 . Recent payroll stubs
8. Last 2 months of bank statements
9. Comparative market analysis or list of recent comparable sales
Benchmark Realty, 7107 Crossroads Blvd., Suite 102, Brentwood, TN 615-371-1544
Diane Osowiecki, license #290309 cell - 615-406-2184 email firstname.lastname@example.org
Mandy Buchholz, license #309437 cell - 615-477-6959 email mandybuchholztn@gmail
Bob Osowiecki, license #325031 cell - 615-878-3902 email email@example.com