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5 Tips for Successfully Selling Your Home in a Short Sale
Published: 07/19/2011 by Kristie Lorette
When you are a homeowner in a situation where you owe more on the mortgage than the home is worth, you may be a candidate for a short sale. The mortgage lender or bank has to agree to a short before you can proceed, but as the seller of the home, you still have a vested interest in getting the highest price possible from the buyer of the short sale property.
1. Get Approval from all Lenders
First, you have to get permission from any and all lenders that have an interest in the property to sell it in a short sale. For example, if you have a lender that holds the first mortgage on the property and then a bank that holds an equity line as a second mortgage on the property, both lenders have to agree to allow you to sell the home in a short sale. Even if your homeowners association or a contractor has a lien on your home, you have to get permission from all of these people and companies—anyone that has a vested interest in getting a piece of the cash from the home once it sells.
2. Assemble a Short Sale Team of Pros
The short sale process is not your traditional home sale process. This means that you want to assemble a team of real estate professionals that specialize in short sales so they can help you get the highest sale price for your home, and simply help you thorough maneuvering the process. First, find a real estate agent that lives and breathes short sales. Have them help you assemble the rest of your team, which should include a real estate attorney and title company—both experts in short sale transactions. These professionals help you determine a fair price to sell the home for and help you through the loopholes and pitfalls sellers are up against in a short sale process.
3. Be Patient
It can be stressful when you cannot afford to make your mortgage payments and you know that you owe more money on the home than it is worth. Most homeowners in this situation want to get through the process as quickly as possible. Unfortunately, for both the buyer and seller in a short sale transaction, the process tends to be slow and tedious. This means you have to be patient. You can speed up the process by being responsive to your lender or lenders when they request any information from you they need to complete the process.
4. Expect Demands
Expect demands from the lender. Remember, its goal is to lose as little as possible on the amount of the mortgage you owe them. They would rather lose some money than all of it, but expect the lender to try to agree to have you pay the difference between the amount of the short sale price and the mortgage balance after the sale is over. This is also why you need an attorney on your side because some states give lenders the right to come after you for this difference.
5. Deficit Responsibility
Read the short sale agreement you make with your lender very carefully. Some agreements accept the amount of purchase that they negotiate with the buyer and this relieves you of any further financial responsibility on the property. Other agreements state that the lender does not fully forgive the debt, or the difference between what you owe on the mortgage and how much many they receive in the short sale. Some states provide lenders with years to come after the seller for the deficit amount, so you want to make sure that once the short sale is complete, you are completely relieved of any further mortgage financial responsibilities.
