Selling your real estate property via short sale can be a practical option for distressed real estate investors trying to avoid foreclosure. However, the short sale process can be challenging and frustrating without proper guidance. Here are the steps of a short sale to help real estate sellers and buyers achieve a successful short sale transaction.
With short sales, real estate investors sell their real estate property for a discounted price approved by the lender, usually a bank. As mentioned, a short sale is an option for real estate investors who are distressed – meaning they are falling behind on the mortgage payments, or the value of the investment property is less than the mortgage owned, or both. Thus, in order for the lender to consider real estate investors qualified for a short sale, they have to demonstrate financial hardship (such as unemployment, divorce, medical emergency, and bankruptcy) and that the real estate investment property does not have enough equity to pay off the mortgage. The lender won’t approve the short sale if the mortgage can be recaptured with a regular sale.
If you qualify to sell your home via a short sale, the first step in the short sale process for real estate sellers is contacting a real estate agent. Keep in mind that the short sale is a very complicated real estate transaction, thus it should be handled only by a real estate agent who has significant experience in the short sale process in real estate, and a strong track record of success in negotiating short sales for his/her clients.
Your agent can verify whether you would indeed qualify for a short sale. Once you decide to pursue the short sale process, you will have to sign a written authorization so that the agent is able to contact your lender on your behalf. Real estate sellers also need to sign a listing agreement with the real estate agent so that the investment property can be put on the market immediately at the low end of the fair market value.