What Is a Short Sale? Exploring the Process
Short sales are an important option for people looking to sell their home. Find out the process of a short sale, what a buyer needs to know, and the pros and cons of this type of sale.
What Is a Short Sale? Exploring the Process
A short sale is a real estate transaction that happens when a seller's mortgage is more than the value of their home. The seller opts to sell the home for a discounted price to the buyer. The lender agrees to accept less than what the original home loan amount was, as it is usually the best option for a financially distressed seller.
If you are considering a short sale, the first step is to contact your lender and get pre-approved. To get pre-approved, you must submit an application to the lender. This application includes financial information that will help the lender in deciding if you qualify for short sale. Your lender will look at the current market value of the property, your current financial situation, and your ability to repay the remaining debt on the loan.
Once your application is approved, the process of issuing a short sale begins. You will need to provide detailed information regarding your current financial situation, including income, expenses, and assets. You will also need to provide any documents that may help the lender in making an educated decision about the debt that you owe. This includes loan documents, income tax returns, bank statements, and more.
Once all of the information is reviewed by the lender, they will decide whether or not to accept a short sale. If the lender approves, the next step is to submit an offer to the buyer. This offer should include information on the current market value of the property, the amount that the lender is willing to accept in lieu of the original loan amount, and any closing costs or fees that the seller will be responsible for.
After the seller has accepted the short sale, the lender will review the offer and decide whether to offer a counter offer. Once the terms of the short sale are agreed upon, the home will be placed on the market and closing of the sale will occur shortly after it is approved by the lender.
A short sale is a complex and lengthy process, and it's important to discuss the details with a qualified real estate or financial professional before beginning the process. Fortunately, there are resources available to make sure that the short sale process goes smoothly and successfully.