If you are one of the many homeowners who have fallen behind on your mortgage payments and you don't see any way to avoid foreclosure, a short sale may offer you the least painful way to resolve the situation. A short sale is when a lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the home by a financially distressed owner. The lender forgives the remaining balance of the loan.

WHAT'S IN IT FOR THE SELLER?

Obviously, the ideal scenario would be that you magically catch up on your mortgage payments and keep your home. But for an increasing number of Americans, that is not a realistic possibility, so it's to your advantage to take an active role. This is what a short sale is all about -- resolving the problem, as opposed to simply hiding from your lender and hoping the issue will go away or, worse, walking away from the property. As a seller, there are cons to a short sale. Obviously, you will lose your home -- but that will happen anyway when the bank forecloses. You will also walk away without any profit from the sale. And, your credit score will take a hit.

However, because you are making a good faith effort, the lender may look more favorably on you, and perhaps be willing to help minimize the damage to your credit score. You are also spared the stress and embarrassment of a long drawn-out foreclosure process. That's may allow you to feel more in control and that you have a more direct role in paying off part of the debt. Remember, too, that every short sale is a negotiated agreement between the owner and the lender. In a foreclosure, the lender can always pursue the seller for a deficiency judgment to recoup the difference between what it was owed and what it actually collected. In a short sale you may be able to get the lender to accept the sale as "payment in full without pursuit of any deficiency judgment."

Convincing the lender There's no guarantee, but if you have evidence to back you up, a lender may agree to a short sale. It's going to take a lot of proof and convincing evidence. To make your case, you, the buyer and any agents should work together to assemble the following package: 1. An Authorization Letter 2. A Hardship Letter 3. A Statement of the Property's Value 4. An Offer to Purchase the Property 5. A Settlement Statement

WE CAN HELP:

Want to check on a refinance before you commit to a short sale? We work with preferred lenders, a team of Certified Mortgage Planners who can help you with any type of refinance. They are up to date on all the industry changes and are able to honestly assess your personal financial situation so you can make the best decision possible.

We have had quite a lot of experience with short sales and are here to help you with any questions you may have and get you to that next step of relieving that financial burden you may be facing.

The Lee Team has a broad understanding of the entire process, from listing a distressed property to handling all the transaction details. With their streamlined approach, the process is more efficient and produces better results. We will work with you for the best resolution and be there for you every step of the way.