1) Locate a Realtor that has experience with short sales. Short sales require a uniquely-qualified agent.
2) Wait to sell. Property values increased 13% to 19% in 2012. The greater-Seattle area may see that much appreciation again in 2013. Rising values rebuild your home's equity. You may find your home is worth much more by the end of this year.
One option many agents don't think to ask about is: can you come in with the difference between the amount the home can be sold for and what is owed on the mortgage itself + sales costs (including commissions and excise tax)? If you can, you may walk away with little or nothing in your pocket, but with your credit intact, and you will not have to endure the short sale process and the stumbling blocks that are sure to come up.
Also, with a short sale you can be held liable for the difference between the mortgage owed and the amount garnered from the short sale unless the lender is willing to sign away their rights to collect that balance. You could be 20 years down the road and have the lender or someone who bought the debt come after you when you least expect it.
Short sale is a tedious process where a typical transaction between the seller (the current homeowner) and the buyer (the perspective homeowner) needs the seller's bank approval. The seller's bank is commonly known as "LIEN HOLDER." When a home owner borrows money to pay for their purchase transaction, they indeed give the house title to the LIEN HOLDER in return for purchase money, aka mortgage. When the fair market price of the homeowner's house is less than the owned amount to the LIEN HOLDER, technically the seller's bank is the one impacted the most since the LIEN HOLDER is the real property owner. As a result, any purchase transaction of a upside down mortgage needs the LIEN HOLDER APPROVAL.
Short sale transactions are difficult and both the selling and purchasing parties need professional help. Good news is that f=if your loan is owned by Fannie Mae or Feddie Mac, the newest rule specifies that you do not need hardship letter to obtain a short sale approval. If you own a upside down mortgage, act now. Call (206) 604-2755 for the help you need.
To purchase a short sale property, go to
1. Be prepared to pay the difference between what is owed and what a buyer is willing to pay.
2. Negotiate a short sale if all requirements can be met.
Options if selling the house is not a requirement...
1. Stay in it.
2. Work out a loan modification if the seller wants to stay in the house and can't afford the payments.
3. Use the property as a rental property and wait out the market.
Jen and Mark Bowman
Keller Williams Realty