Short Sale Basics

What is a Short Sale?
A Short Sale occurs when a lender approves the sale of a property is less than the amount that is owed on a mortgage or mortgages. The name, Short Sale, comes from the fact that the lender is paying the "short". In fact, the lender and the payment of real estate commissions and other expense accounts. The seller can not receive in a short sale as a rule, no funds from the sale.

Lender Approval
A lender must approve the sale. This isachieved by first sending a Short Sale package to the lender (s). Next, the file is negotiating a loan officer at the bank, that mapped the Short Sale Package reviews. At this point, there will be a negotiation, because the bank wants to get as much money as possible for the defaulted loan and the potential buyers want to spend as little as possible in order to purchase the property. During this process, the Bank is, broker price opinion or appraisal order. Once the bank agrees to accept a certainDiscount on the amount of mortgage, short sale approval letters by the Bank and a conclusion follows thereafter.

Short Sale Package:
1. Purchase and Sale Agreement (the broker)
2. Addendum to purchase (from Realtor)
3. Authorization to Release Information
4. FULL Two years Tax Returns
5. Two months Bank Statement (most recent)
6. Last two pay stubs
7. Fill Out Financial Worksheet
8. In a handwritten letter Hardship
9. If FHA, shape, and 90,036Home Ownership Counseling Certificate

What is an authorization to release information?
An authorization to release information (ARI) is a document that can communicate with your attorney or negotiator with the lender on your short sale. This form allows your attorney or negotiator in the payment order, send in a bid for the bank and the bank negotiators negotiate. Banks will not talk all the negotiating partners, that has not only made that an ARIcontains the names of the seller, signatures, social security number and bank account.

What is the Financial Worksheet?
The financial worksheet is a standard form, which is used to show a seller the household, income vs. expenses. Some lenders may require that this information be resubmitted in their own form. Your personal financial information is needed and should be as accurate as possible, including gas, car payments, mortgage payments, food, medical care for children, entertainment,etc. Lenders want to see where your money goes, and may refuse your request for short sale if there is a surplus of money at the end of each month.

Frequently Asked Questions:

Will I Qualify?
In order for a short sale, an owner must normally be in default. This means that the owner is behind by at least three payments. In most cases, there is also a foreclosure case against the owners filed by the lender.

How does this affect my credit?
If youin default, chances are that the lender has already reported to the Credit Bureau and damaged your credit card. A short sale will prevent your property, that foreclosed on and sold at an auction, further hurt your credit card. While a short sale does not resolve your credit problems, it is better than the alternative.

What is a Hardship Letter?
A Hardship Letter is a simple letter to the bank that the reason (s) why it shows fallen behind in your payments provided. TheLetter should show any events that the financial burden that have resulted, including but not limited to, divorce, job loss, bankruptcy, including reduced hours at work, illness, death or disability. The hardness should also write all the measures you have taken to sell the property. For example, you have a list of property with an agent or For Sale by Owner? If yes, how many performances there? Also, it is advisable for all repairs that are needed on the property in times of need, includingLetter.

Disclaimer: Despite Suncoast's lawyer, in fact, an attorney, nothing in this article is not legal advice. Please consult with a lawyer that is familiar with the details of your case and can advise which is correct for your specific situation.