It seems that everyone knows someone who is facing losing their home to foreclosure. It can also be said that if you know somebody in foreclosure, the chances are someone has told them that a short sale as the strategy to unlock the foreclosure prison.
While short sales can help homeowners avoid losing their home to foreclosure, it is a very complex procedure and one that should not be taken lightly by someone who is not educated about short sales.
If you are a homeowner who is facing foreclosure, a short sale may be an alternative to losing your home. However you will need to be open, honest diligent, cooperative and you must comprehend that the following 5 tips are vital to your short sale being approved by the bank:
1. While you may be able in some occasions to convince a bank to work with you, the prudent homeowner knows that they are not an expert and should let the expert in the market handle the short sale. Whether an experienced real estate agent, title processor or attorney, make sure the person facilitating your short sale really is knowledgeable in regards to the short sale process.
2. Make sure you stay actively involved and you cooperate fully with the timely submission of forms and other paperwork as may be required by the lender. This includes that you, not your agent or advisor, but YOU write a concise and informative Hardship Letter. Having someone else write your hardship letter may be the reason that your short sale package will be turned down.
3. Make sure you know what is expected of you. The bank is going to want a comprehensive short sale package and that more than likely include a full financial forensic picture complete with bank accounts, tax returns and more. Your omission to give the bank this information may get your short sale request rejected.
4. The bank lent you money and they have every reason to collect. You have the obligation to reveal your assets and to liquidate them to reduce what you owe them. You cant ask them to take less while you are cruising around town in your Porsche. It just does not work that way. You must be ready to show a reason you are unable to pay them back (i.e. show a hardship.
5. Make sure you dont dilly dally until its too late before you request a short sale. Most homeowners dont do anything or simply wait to long to act. No real estate agent or attorney is a magician. They need time to make the short sale work. If you want to save yourself from enduring a foreclosure on your home then you must act in timely fashion.
Short sales can take as long as 6 months to get accepted. These are just 5 simple strategies you can implement to give your short sale request the best chance for approval. This is not a simple procedure for the bank or homeowner and your continued cooperation can mean the difference between a successful short sale or your home being auctioned off.
Whatever you do, take some action. If you want to try to manage a short sale on your own, some lenders are now letting homeowners do just that. If you want to find out more information about how short sales should be properly executed please visit our short sale information resource center for videos and tips as to how to successfully complete a short sale.
By understanding the short sale process you will be better prepared to talk about things with your lender and you’ll be more tuned in to spot inadequacies and shortcomings with any Realtor that you may choose to hire to handle your short sale for you.
If you’re a Realtor reading this, you too may want to visit our short sale resource center. It will help you learn how to properly complete short sales and generate higher commissions.