How to Short Sale a Home
What is a Short Sale? A short sale is when a lender allows the owner to sell
a home for less than what is owed. A short sale is typically faster and less
expensive than a foreclosure. Get started
In real estate, a short sale is a sale of real estate in which the proceeds from the
sale fall short of the balance owed on a loan secured by the property sold. In a
short sale, the bank or mortgage lender agrees to discount a loan balance due to an
economic or financial hardship on the part of the mortgagor. This negotiation is all
done through communication with a bank's loss mitigation or workout department. The
home owner/debtor sells the mortgaged property for less than the outstanding balance
of the loan, and turns over the proceeds of the sale to the lender, sometimes (but
not always) in full satisfaction of the debt. In such instances, the lender would
have the right to approve or disapprove of a proposed sale. A short sale typically is
executed to prevent a home foreclosure, but the decision to proceed with a short sale
is predicated on the most economic way for the bank to recover the amount owed on the
property. Often a bank will allow a short sale if they believe that it will result in
a smaller financial loss than foreclosing as there are carrying costs that are
associated with a foreclosure.
source wikipedia
How does a Short Sale affect my Credit? Short sale is far less
damaging than a foreclosure or deed-in-lieu. The FICO score is likely to drop down by
75-100 points if you do a short sale as compared to 250 points if you're on a
deed-in-lieu or foreclosure. Often lenders allow for short sale if they believe that
they'll suffer a small financial loss compared to that of foreclosure.
source mortgage fit
How to Short Sale?
Steps: 1. Contact a
realtor and
get your home
listed. Many banks want to know you are actively trying to sell your home. 2.
Call your Lender, get a short sale paperwork package, complete and return to
lender. 3. When you get a offer your realtor will handle all the details.
4. Your lender will provide a approved sale price , usually anywhere from a few
weeks to few months from receiving the offer. Once approved by your lender the sale
will proceed like a normal Real Estate sale. Get started
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