Short sales?  Many people mistakenly believe they must be delinquent on the mortgage payment prior to doing a short sale.  However, a short sale can be initiated by the homeowner if a hardship exists. 

     If hours or salary is cut, a medical expense, an extraordinary expenditure, a death, an incarceration, a job loss,  any number of life’s problems—these situations should spur the homeowner to request that the lender agree to a short sale if the homeowner believes there will be a problem making the mortgage payment(s).

   The fact that the property is no longer worth what it was when originally bought is not grounds for a  short sale. 

    Being proactive is the key to a successful short sale.  The credit rating will suffer, but not as much as with a foreclosure.  Contacting the lender(s) immediately to inform the lender(s) of the situation is paramount. 

    Working with a Realtor who understands short sales and foreclosures such as a CDPE (Certified Distressed Property Expert) or an SFR, the new National Association of Realtors designation for Short Sale and Foreclosure Resource, can help the homeowner immensely.  The Realtor should first try and do a loan modification for which there is generally no compensation.  Only after knowing this is not possible should the Realtor embark upon a short sale.

    Under no circumstances should a homeowner pay someone for a loan modification or sign up for a “rescue program”.  Scams abound, and many are illegal.  Often a homeowner is worse off, having spent precious funds on a bogus solution.

    Realtors trained in short sales know how to document and talk with lender negotiators, and in many instances, cut through the red tape by preparation and understanding of lender systems.   

     The lender(s) does not want to take back the property;  Lenders are not in the business of owning property and a successful short sale is beneficial to all parties involved.  Pricing properties accurately for a short sale is paramount.  The lender is looking for a fair market value, not a deal and a half for a buyer. 

     Sellers must be prepared to document their hardship, provide pay stubs, income tax returns, copies of savings and retirement accounts, as well as details of assets and liabilities.

    Tomorrow:  Options other than Short Sale

    Terry Bishop, a Realtor with RE/MAX Excalibur in Tucson, Arizona has earned her CDPE and her SFRas well as other designations.  She can be contacted at terry@terrybishop.com for further information.

Tags: Consumer Education, Foreclosure, Foreclosures, lender, Short Sale, Short Sales, Short Sales and Foreclosures

This entry was posted on Monday, February 8th, 2010 at 6:34 am and is filed under Short Sales and Foreclosures, Tucson Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.