Short Sale-Helps both Buyers and Sellers

Short Sale-A Means to a Good Deal

If you currently are unable to earn the income to make the mortgage payments on your home, a short sale may help you steer clear of declaring bankruptcy or causing your lender to foreclose on your home. A short sale takes place when your home loan's lender discharges your property's lien and agrees to take less money than you owe on the loan as a payoff. For example, if you owe $200,000 on your home, and you are offered $190,000, the lender may allow $190,000 as payment in full. Don't forget, though, that some lenders will not accept a short sale, notably if foreclosure is more lucrative for them.

What You Need to Learn About Short-Selling Your Home

Most lenders have particular requirements concerning exactly what documentation they require from those hoping for a short sale, although most will require a letter of authorization, wherein you give them authority to disclose your personal information. Think about writing your lender a memo granting your permission to speak with others about your loan. Include your full name, the date, the property address, your loan number, and the name and number of the realtor who is helping you.

Your closing agent or lawyer should also prepare for you a preliminary net sheet. This consists of the estimated closing statement with the sale price for your home that you judge you will receive, all the extra costs of sale, the balance of the unpaid loan, your late fees and payments, and any commissions your realtor will take. You will need to send this to your lender also. Send along a hardship letter that details exactly how you fell behind in your payments, an honest report of your income and assets, together with any savings accounts, stocks, additional properties, or articles of real value. Send along copies of your bank statements, a comparative market analysis, if one is needed, and a copy of your listing and purchase agreements when your home goes on the market, and later when you receive an offer. Once your lender has all of your paperwork, they will decide on whether or not to authorize your short sale.

Be Familiar with Risks of Buying a Short Sale Home

While the enticement of getting a good deal on a short sale is quite strong, be sure to investigate the property before making an offer. To start with, a lender is under no obligation to accept your offer on a short sale listing, even when the seller accepts it, simply because the property is listed with short-sale provisions. Keep in mind that a lender may have given permission for the short sale to the seller because the seller currently owes more money than the home's value. This would not make the listing price below market value, but instead make the price of the home comparable to other properties in the market. Do some public-records research in order to discover whether the home is being foreclosed, and find out how much the seller owes the lender. This will help settle on how much to offer. When a seller accepts your offer, send a copy of it to the lender for authorization and make your offer subject to the lender's approval. Also, be sure you have the property inspected making your offer contingent upon a "passed" inspection.

Take a look at Rancho Palos Verdes, CA realty for short sale listings. Consider Temple City, CA houses for sale for short sale properties. Check out Temecula, CA houses for sale for short sale homes.