Home sellers in a short sale situation often find it frustrating at best.
Here are 7 quick short sale facts for home sellers, we hope you find helpful:
- The lender (s) must agree to the sales price, and it’s more difficult (yet not impossible) if there is more than one loan.
- Sellers are required to provide the lender with reason for short sale, documentation (letter of hardship), tax returns, pay stubs, bank statements, etc.
- Your lender is likely to require an appraisal or a broker’s price opinion of value prior to making a decision on the offer.
- The process can be long and drawn out, most processors are on overload, so be patient.
- A lender may ask you for a financial contribution (you know kicking in more than a few bucks) to approve the transaction, or ask you to sign a promissory note.
- If you’re in foreclosure, the process continues and does not stop during the short sale, or loan modification process.
- Plan on receiving a 1099 from the lender at closing, and you may or may not have a tax liability. It’s recommended to seek tax/legal advice on this issue.
*Keep in mind these are basics and there are exceptions to every one of them.
It takes real stamina for both home sellers and buyers to hang in there for these things. I’ve watched repo sales, short sales (we used to call them pre-foreclosures at one time) for over twenty-five years and urge you to work with someone who understands your local market and short sales.
Again, do your homework ahead of time, and hire an experienced short sale REALTOR. Ask for personal referrals on the subject, how many others have they helped with short sales, how many actually closed. Ask questions and interview fiercely. If you’re a home seller and you’re upside down iwth your home, your success and financial future can depends on it.