subject: What is the tips of short sale [print this page] What is the tips of short sale What is the tips of short sale
"Short sales have become a popular recourse for struggling homeowners in the past two years. As financial distress hits more and more borrowers, many turn to their lenders' short sale departments to steer clear of foreclosure. But what is a short sale? How does a short sale really work? Does it apply to all homeowners? How do you qualify? This guide explains the tips of short sale and how to do short sale.
What It Is
A short sale is an agreement between you and your lender allowing you to sell the home for a price lower than your outstanding mortgage balance. Your lender then accepts the proceeds as payment for your loan and forgives the rest. The mortgage is then settled and you're free of obligations, without having to go through the foreclosure process. Lenders usually agree to sell a short sale home because it costs them less than a foreclosure, and leaves the responsibility of selling to the borrower.
Pros and Cons
The main advantage of selling a short sale home is that you're safe from foreclosure, which damages your credit more than a short sale does. You don't get to keep your home, as you do with a loan modification, but you limit the impact on your credit report and keep your credit options intact. Short sales usually work best for borrowers who have little or no equity in their homes, as their value cannot cover what is owed on the loan.
Getting Approved
The best candidates for short sale home selling are people who are in financial distress and have no other means to pay off their mortgage. Lenders usually look into borrowers' assets and bank accounts to see if there are other ways to settle the loan, such as seizing other properties. You may be asked to provide a statement of assets and liabilities, along with standard documents such as bank statements, tax returns, and pay stubs.
Selling The Home
Once you've been approved to do a short sale, the next step is finding a buyer. This can be the longest part of selling a short sale home, as most cities have large inventories and stiff competition for home buyers. Have an experienced short sale agent help you market the home and show it to as many potential buyers as possible. Offers on a short sale home have to be approved by the bank, so make sure to choose only the most viable bids and keep constant touch with your lender to make sure your short sale is moving along."
