A short sale is one way to extricate yourself from a difficult situation if you find you can no longer afford your home. If you are considering a short sale, keep in mind that it is not a simple process, so proceed with caution. Before you attempt to take this step, seek legal and financial advice.
In a short sale, a lender agrees to take less than the full price of a property. This is also known as a “shorted sale”.
For example, if you still owe $485,00 on your home and are able to sell it for $475,000, with a short sale your lender will take this reduced price as payment in full.
Every lender will not accept a short sale. If you need to take this measure, you shouldn’t just talk to the first person that answers the phone. Many lenders have specific persons who handle short sales and these are the people you need to speak with to be sure your case is handled properly.
You or your agent will have to compose a detailed letter to tell the lender exactly why you are requesting a short sale. The letter should not be vague; rather it should outline your situation, as well as discuss the value of your home, the price you want the lender to accept, the commission the agents has agreed to take, and expected closing costs.
Also, ask your lender exactly what you owe and verify that the number is correct. If you have missed payments, there will be late fees to pay, so do not leave these amounts out of the equation when you do your own math.