Short Sale

SHORT SALE:

The nuts and bolts of a short sell are in it's name. The short being the loss on the loan the bank takes. The sale means that the homeowner has to sell the property at a loss, to repay what they can to the bank if they are unable to continue making payments. Not all lenders will go along with a short sale, and each lender will have it's own set of flaming hoops for the seller to leap through before it will give the go ahead. If this is something you are thinking of as an option, I as your Realtor would advise you to medicate yourself with whatever you have leftover from your last root canal and hang in there. There is no sugar coating beyond this point!

Before you foray into this part of your life I would really strongly suggest you take a long, stern look at refinancing, or asking bank to negotiate on a lower interest rate, or something along those lines. That is all I am going to say about that because I am not a lender either, and it is really none of my business (but really it is, so there. Don't tell anyone I told you!). If you can avoid the short sale process you really ought to. I would also suggest putting your home up for sale the minute you realize you can no longer pay for it. Find out your payoff from anyone who has a lien on the home and use that number to determine your sales price. Obviously this sales price needs to be at or above what you owe, and that also needs to be kept in mind while negotiating who pays for closing costs, allowances and so forth if the home gets an acceptable offer. THE TIME TO DO THIS IS BEFORE YOU HAVE MISSED ANY PAYMENTS ON YOUR MORTGAGE. Even if you have missed a car payment, a credit card payment or the vet is going to send you to collections, MAKE YOUR HOUSE PAYMENT FOR AS LONG AS POSSIBLE TO MAINTAIN A LITTLE LEVERAGE WITH THE LENDER! (Again, I'm no financial adviser so just disregard the bold nonsense above.)
If the sale of your home is not looking hopeful you need to begin the short sale process. Have a Realtor determine your market value, or have a Broker price opinion (bpo) done, whichever your lender will accept, to get an idea of what your home could realistically sell for. You will need to present this information, along with marketing plan, and proof of reason you can no longer make payments on the amount you borrowed. Your lender will get out the hoops and a lighter at this point and the show can begin. After the lender has agreed to participate, your Realtor will magically appear with a buyer. This might take a while, in all actuality, because short sales are notoriously long drawn out processes, filled with uncertainty and aggravation for everyone. It takes a special kind of person to decide they want to add more of that into the home buying process. However, this is also a way for a buyer to get a pretty good deal on a home, and there are plenty of patient people out there who know the wait is worth it. Your bank will take it's sweet time deciding if it will accept the buyers offer, or counter or just say no. Your Realtor will spend many an hour beating herself over the head with the phone on hold trying to reach someone who can tell them anything for you. This is all worth it. Once an agreement has been reached you as the seller are free of the burdens you were shouldering and your credit is still in the triple digits, the bank has recouped some of it's loan, and the new homeowner can move in knowing they paid a very reasonable price for their new home. This is not an easy process, and it happens to people for all sorts of reasons. One of the main jobs of your Realtor in this situation is to handle the brunt of the haggling and nitpicking that can be emotionally draining and defeating. You don't need to beat yourself up over this, and you really don't need to let any one else beat you up either. Let your Realtor get out her boxing gloves while you go take a nap.

Each situation is so unique, and depending upon the lender, the circumstances affecting your ability to pay, and the way things are handled can affect the outcome or even the ability to do a short sale. You need to sit down with your Realtor, your lender, and yourself and decide if it is an option for you