What is a short sale?

A Short Sale is a situation where your lender agrees to let you sell your home for less than you owe.

Who qualifies for a short sale?

Homeowners:

1. whose homes have dropped significantly in value

2. who are facing tough times financially

3. must have no other assets

4. mortgage must be at or near default status

5. monthly expenses exceed income

What will the lender require to start the short sale?

1. Letter of authorization, which lets your agent speak to the bank

2. Homeowner's hardship letter

3. 2 years of tax returns

4. 2 years of W-2s

5. Recent payroll stubs

6. Completed financial statement

Each lender may require more or less information depending on the circumstances. 

How long does a short sale take?

Each lender has different time frames. In my experience I was able to get short sale approval from Wachovia in less than 5 days and close escrow within 30 days. Some lenders take much longer. Persistence is the key to getting a short sale approved and closed in a short time frame.

What will the short sale cost me?

Besides a huge decrease on your credit score, usually the first lien holder of the short sale will not charge the homeowner for taking less than the loan. If there is more than 1 loan then the second lien holder may try to negotiate a settlement from the homeowner. The bank that holds the lien(s) on the property pays for the real estate agent's commission.