Colli Real Estate

Closing a Short-Sale, How to do It

In real estate, a short sale means that the outstanding loan obligations against a home or property are greater than the selling price of the property. A possible foreclosure can be avoided through a short sale and the homeowner can still pay off the loan balance with his mortgage lender. In a short sale, the lender accepts a lesser amount than the current payoff of a loan, which includes penalties, fees and overdue payments.

In the event of a financial problem and you would no longer be able to afford to pay your mortgage and there is no other immediate alternative and other means to solve the situation, you should seriously consider a short sale. However, you need the approval of your mortgage lender after you submit several required documents such as the contract of sale, Final Broker’s Opinion of the value of the property, repair estimates, net offer statement, pay check stubs of seller, hardship letter made by the seller, financial statements, tax returns, personal asset statement and  bank statements. Closing a short-sale needs utmost patience and perseverance. The bank or the mortgage lender accepts not all short-sale proposals.

So, how do you close a short sale? The best thing to do is to hire someone to act for you. A real estate broker is capable of presenting your proposal well and he is very capable to negotiate with lenders. If you do not have a good relationship with your mortgage lender, the more that you need to hire a broker since he knows the trade and ways to convince lenders.

In the process of your short-sale proposal, a loss mitigation officer will discuss with you the losses that the mortgage lender will incur with your proposal. You have to be very professional and hear him out. After listening, it is then your turn to present your side. It is essential that you know the documents that you have and be able to answer questions as well.

There will be cases when the mortgage lender will disagree with the value you presented to them. If you are definite that your calculation is right, stand for it and do not be easily swayed. Be ready to present more evidence like photographs as to why you presented such values. The lender will surely consider your proposal.

Once you get their approval, there is no time to lose, work on it immediately. It is necessary for you to sell your property because the short sale has a due date. The most time the lender will give you is thirty days. It is best to find a direct buyer who is willing and able to pay for the house at its pre-determined value.

In a short sale, you should always be ready to present it convincingly. The important thing is you have to be honest with yourself and the mortgage lender and present your situation in good faith. Patience plays a big role in this area, losing it could only add to your financial distress. Whatever the situation is, be always positive. Remember, there is always a solution to every problem.

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