Short Sales

Unfortunately, there may come a time in our lives where will face the fact that it may be best to 'cut our losses and run'. This couldn't ring truer for those who find themselves unable to afford their mortgage and who are on the verge of losing their home. If you find yourself in this position, understand that there is help for you, and it may be in your best interest to consider a short sale on your home to avoid the risk of foreclosure.

In order to proceed with a short sale of your home, understand that it is advisable for you to enlist the help of a real estate agent. He or she will be familiar with the necessary procedures and will be there to guide you through each step of the negotiations for a short sale on your home. The term 'short sale' simply implies that they current market value of your home is far less that what you currently owe on it. As a result, it's important to contact a real estate professional who will assist you in navigating this tricky process.

Don't feel ashamed if you find yourself in this type of situation. At least three-quarters of well-known housing markets in the US have suffered the same effects of continuing price decreases. As mortgage rates continue to increase, we find that the values of homes are steadily decreasing. In conjunction with rising mortgage rates, home owners also find that other vital items such as food and gas continually rise, leaving them with little money left to pay their mortgage at the end of the month. Usually a short sale is a result of their inability to keep up with rising costs.

As with any short sale, your lender must be fully aware from the beginning that you are putting your house on the market. Furthermore, it's important to understand that compared to a conventional sale, there will be more paperwork required to be completed during a short sale.

Once you've given your permission in writing to sell the home, you lender will communicate with your real estate agent throughout the process. You will be required to document the exact reasons why you cannot continue paying your mortgage, commonly referred to as "proving hardship." Usually in these cases you'll be asked to provide not only a letter of explanation, but also copies of your credit card bills, bank statement, W-2s and any other supporting documents to help your claim.

When going through a short sale, do not automatically assume that hardship will free you from the debt you owe. In some cases this has proven true due to the fact that lenders don't wish to accumulate a mass of homes on their books, however, do not walk into the situation assuming that this will be the case for your situation. Usually a lender will approve a short sale simply because it saves them time and money as opposed to your home going into foreclosure which is even more costly.

Author Unkown