If you are a homeowner in distress or if you have defaulted
on your mortgage or simply cannot afford your payments, a short sale may be
your best option. Once you are 90 days delinquent on your mortgage, a Lis Pendens is filed by the
lender. The sooner you address the
delinquency the greater the likelihood the lender will want to work with you to
sell the property.
In a short sale, you list your
property for sale at fair market value, even if that value is lower than what
you owe on your mortgage. If a buyer is identified and the property is sold,
the proceeds from the sale are used to pay off your mortgage debt, even if the
proceeds are less than the amount owed on the mortgage.
By working with your local real estate agent to
successfully complete a short sale, you can help resolve your mortgage
situation with less negative consequences than might result from a foreclosure.
If you meet all the requirements of the HAFA (Home Affordable Foreclosure Alternative) program,
the lender will accept less than the amount due on your current mortgage and
release you from any further responsibility for your outstanding mortgage
balance. In addition, you may be eligible for relocation assistance of up to
$3,000 to help cover your moving, rental or relocation expenses.
How does a short sale work?
Step 1 Qualification:
must be a realistic hardship for the lender to approve your
sale. A hardship can be described as job loss, income loss, divorce,
relocation, and many other factors.
Your lender will require some documents to begin the
Hardship Letter - This
will outline your current hardships justifying the need for a short sale.
Financial Worksheet - This
outlines your assets, liabilities, and expenses.
TWO most recent income tax returns
TWO most recent bank statements. All pages
must be included.
TWO most recent pay stubs from work
Third Party Authorization This
will allow your realtor to discuss terms of your mortgage with
your lender on your behalf.
your eligibility for the program is determined, you will receive the Short Sale
Agreement to sign and return. The Agreement will outline the minimum sale price
that will be accepted for the sale of your property and will also identify the
sales costs that may be deducted from the final sale price. Sales costs include
broker commissions and closing costs. There are no upfront fees paid
by you.Â These fees are paid by your mortgager upon successful closing of
the short sale. If
you agree to the terms of the program, you will be asked to actively market
your home with your real estate agent for a period of no less than 120 days. Step 3 Offer:
When you receive a written offer from a buyer to purchase your property,
your real estate agent will be asked to submit the required documentation.Â Once all documentation is
received, the bank will respond within 10 days to inform you if the offer is
Step 4 Closing:
Once the sale
closes, you may be eligible to receive up to $3,000 to help with your moving,
rental or relocation expenses.
If you have any questions on how a short sale works or whether it is the right choice for you, you can call me directly at 718-775-5344 and I will be happy to assist.