10 Tips to Sell Your Condo or House as a Short Sale.
A short sale is when a homeowner needs to sell the home for less than the amount owed on the mortgage, with all the proceeds going to the lender. It is an alternative that most homeowners facing foreclosure turn to since it gets them out of debt and has less damage to their credit score compared to a foreclosure. The short sale process can be a very frustrating and stressful one for the homeowner, not to mention a long one. It could take months before a lender finally approves a short sale. If the complex and lengthy short sale process falls through, the end result could be a foreclosure. But please do not let this encourage you, this can be avoided if you are prepared, organized, and armed with the right knowledge and are working with a short sale agent with experience. Here are some tips to help you sell your short sale property fast.
- 1. Check for references. Don’t just believe any real estate agent or lawyer that claims they have experience in short sales. Do your own research and background check, especially on their years of experience and number of short sales they have closed. Remember that short sales are very different from regular sales and it is important that your agent is knowledgeable and experienced in short sales in your area, since rules and regulations differ in every state.
- 2. Communication. You should have regular and constant communication with your short sale agent, your local real estate/ foreclosure attorney, and a CPA. Each state will have different laws and regulations about short sales which change constantly. Keeping constant contact with these experts will ensure that you always stay in the loop during the short sales process.
- 3. Gather and organize all your documents. Short sale files can reach up to 80 pages. Consult with your short sale agent and your lender to determine the required documents you need to provide. Most short sale lenders will require you to submit your recent pay stubs, tax returns, bank statements, monthly mortgage statements, and a list of debts and expenses you have incurred.
- 4. Be current with your HOA payments. Delinquent fees like Home Owner Association Fees can kill a short sale. Most short sale agents and buyers will not work with short sales where HOA payments are delinquent.
- 5. Know the market value of your home. Most of the time, banks will lower the price of a home as much as they can to be able to unload it. But make sure you keep the price of your home at a reasonable level. You can do this by knowing the actual price or market value. You can ask the help of a local appraiser to determine your home’s current market value.
- 6. Set the right price. Once you know the value of your home, set it at a price which is slightly above the market value to make room for negotiations.
- 7. Expect the price of your home to decrease. As your property stays on the market for a longer period of time, then the price will inevitably go down. But first consult with your short sale agent, attorney, and CPA before lowering the price.
- 8. Negotiate often. Since the lender would rather have the property sold than have it default, then you have some leverage in negotiating with them
- 9. Patience is a virtue. A short sale takes longer than a regular sale since there’s the extra paperwork and more parties involved compared to a normal sale so you must learn to be patient.
- 10. Expect it to not be over yet after closing. There are instances when, after the closing of the short sale, the borrower will later be asked to pay the difference between the short sale and what the home was worth, which is called a deficiency judgment. One way to avoid this is to do the short sale through the HAFA. BUT again, if you work with us as your Short Sale agents we will help you get an approval letter from the bank that wipes out the deficiency once and for all.
With all these, as well as proper preparation and working with an experienced short sale agent, your short sale should work out smoother and faster.
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