Short Sale
A short sale occurs when a sale’s proceeds are less than what is owed on the house. The lender agrees to accept a payoff that is less than is owed and will release the lien on the property upon receiving a “short” payment. Short sales are used to avoid foreclosure which can have high fees and cost to the lender and the borrower.

Eligibility
In order to be approved of a short sale, the borrower must have economical or financial hardship and own more than the house is worth. Common hardships include loss of job/income, divorce, bankruptcy, death, and or medical emergency.

The Process
The short sale process is known as a lengthy process. Each bank has their own requirements, but the basic package required to submit is ultimately the same. These documents include:

• Authorization letter – allowing agent to talk to lender
• Letter of hardship – explaining current hardship
• Two years tax returns
• Two months of current bank statements
• Two current paystubs
• Completed financial statement

After the bank receives this package, along with an offer to purchase, the lengthy process begins. A negotiator is assigned and a Brokers Price Opinion (BPO) is performed. From start to finish it can take 6 weeks up to 6 months to approve the short sale.

Benefits of a Short Sale

• Avoid foreclosure
• Avoid a deficiency judgment
• Less damaging to credit than a foreclosure

Overview

A short sale is beneficial for both borrower and lender. Lenders like to avoid the timely process of foreclosure and like keeping the foreclosure off their books. Borrowers get to avoid the stigma of foreclosure and reap financial benefits as well. If you have questions regarding your eligibility contact Evans Realtors, Inc. to discuss your options!