By a real estate short sale, means that you are selling your home at a price less than what you owe on it. This is really an unfortunate situation. You may be resorting to it because you may not have any other option. You may find many such cases in the present scenario because of this recession that we are in. People are struggling and so many decide to do a real estate short sale.
The situation may be that you may have lost your job and a lot of bills may remain unpaid. You may not have a better alternative than this. You may also have opted for an adjustable rate mortgage and it may have become another big problem. Foreclosure may be staring you in the face. Under these circumstances, you should know how to do a real estate short sale so that you can at least settle the mortgage. Though after doing this, you may not have a home of your own but you may have got a little relief.
You start the process by contacting the loss mitigation department of the mortgage company. You should have a frank talk with them and explain to them your financial situation. You may even ask for a lower pay off. If your request for a lower pay off is accepted, it will be very good.
A Loss mitigation department will review your case with the thought of helping you. They will advise if you can go for a short sale or not. You will be guided as to how to go about the process. But you can also consider the following.
Once you have decided and exploring ways as to how to do a real estate short sale, you must get your property listed with a competent Realtor. But you must ensure that the Realtor has a lot of experience in short sales. You should give an authorization to the Realtor to discuss your case with your lender.
There is a form called an "authorization to release information" form which you should sign. It should be faxed to the loss mitigation department of the lender or mortgage company. From this point on, your Realtor is your legal representative agent.
Things You Will Need
The mortgage company have to believe that you are really facing a financial hardship and hence you should furnish proof of this hardship to them. You should fax a few documents to the loss mitigation department some which are as follows:
a) A signed copy of short sale request document. The mortgage company has a standard format on which you should sign and return.
b) Title work on property
c) A proposal of needed repairs prepared by a licensed contractor
d) You should also give the details of your monthly expenses and so you should prepare a list and send to them.
e) Your income statement
f) Bank statement for at least the last three months
g) Copies of Tax returns for the last two years
h) You should write a detailed letter explaining how this hardship has occurred, why you could not settle the bills on time, etc. You should also explain why you are not able to settle the entire loan at its actual value.
i) Preliminary net sheet of proposed sale
In the end the mortgage company will need to take some time and review these documents and your case to see if it is possible to go on with the real estate short sale.