The short sale process could seem intimidating, but getting a handle on the steps can make it a lot less scary. A short sale is where homeowners sell their home for less than they owe on their mortgage. This is often the last resort for people who cannot pay their mortgage and are facing foreclosure.

How does a short sale work? Read the steps involved below

1. First consider a loan modification

Before you assume that you need to have a short sale, speak to your lender or housing counselor about your current situation. You might be able to get a loan modification and avoid having to sell your property.
The federal Home Affordable Modification Program is a project run by the U.S. Department of Housing and Urban Development and might be a good option. If you are eligible for HAMP, your mortgage company will most likely put you on a trial plan for three months. This will give you time to show that you can make timely payments at a new monthly payment level. If you make it through the three-month trial, you might have a new mortgage payment and avoid moving ahead with a short sale.

If you can’t make it through the trial, the next step would be to move forward with a short sale.

2. Speak to your lender about a short sale

Since a short sale means you are trying to sell your home for less than you owe on your mortgage, your mortgage lender will need to sign off on it. But initially, the lender is going to need proof that the short sale is necessary.
The sellers need to submit a short sale packet. This includes hardship papers that show the bank the seller is currently undergoing financial hardship.
That paperwork might include account information and bank statements, copies of bills, pay stubs, asset disclosures and more.

3. Call a real estate agent

You will need a real estate agent to sell your home. Since short sales are complicated, you will want an agent with experience in the short sale process to handle the deal.

The agent will then assess your financial situation as well as the property’s estimated value to estimate a listing price. Click here to get in touch with Stacy and Nicole to schedule an in-home consultation!

4. Listing your home

This is one step in the short sale process that is like any other home sale. The property in question is listed by your real estate agent, who will search for a buyer and get your home under contract.

When you get an offer from a buyer, it must be submitted to your lender for review. Further negotiations might be required between the buyer’s agent, your agent and the lender until a settlement is reached.

If your lender has approved your short sale under the United States Treasury’s Home Affordable Foreclosure Alternatives program, it will be done in about four months. If you did not qualify for HAFA, the process could take longer.

5. Closing the deal

If your mortgage lender approves your buyer, you will move out and the buyer will move in. The money used to purchase the home will go to your lender and your mortgage debt will be forgiven.You will also walk away with three thousand dollars in moving expenses if you qualified for HAFA. If you did not qualify, you simply walk away without the mortgage debt on your shoulders.
Do you need a real estate professional to sell your home? Contact us here!

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Courtesy of Cuselleration

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