Understanding the short sale process can take a lot of learning and might become difficult, even though the process of a short sale is definitely not a new concept in real estate. However, there is much confusion when it comes to a short sale, which causes problems being that it is a sale type that is pretty regular in the field of real estate and has been for years. http://realestate.aol.com/blog/guides/short-sale/ can tell you more about short sale processes. If you are the buyer, you might be unsure of where you should look, but in reality not even all of the real estate agents understand all the pros and the cons of a short sale process.
Understanding the Short Sale Process: More Information
Overall, there are two reasons why the bank would let someone complete a short sell of their property. The first of those reasons is that the property owner is dealing with a hardship financially which means that they are otherwise going to lose their houses. Some hardships may include someone losing their job or have less income compared to their expenses. The homeowner may also just be moving to a different area for their job. Some more personal reasons that could occur for the homeowner are a death in the family or a divorce as well as medical problems or bankruptcies.
Secondly is that the seller might have a negative equity. This occurs if the mortgage of the property has a higher amount than the property value. If this occurs, it is not possible for the owner to sell their house for their mortgage value.
What should you do if you want to Short Sale your Property?
When it comes to short selling your property, you will need to turn in to the bank all of your financial information. The bank will then have certain information that they will need which means that not every bank will want the same exact pieces of information. However, most of the general information that is needed is the same, so you could start to get around the general things that are need such as a letter of hardship, your W-2s, you pay stubs, and even your real estate tax returns. Generally the bank will want your past two years worth of financial proofs. Along with pay stubs they may also want bank statements as well.
Turning in your Offer to the Bank
It is your responsibility with the help of your real estate agent, to write up a short sale offer and then submit the offer to your bank. When coming up with your offer, you should create it based on comparable sales. Your agent can provide you with these sales. The bank would like to get the highest amount of money that they can out of your sale, so an unreasonably low offer won’t cut it with the bank. However, they probably would accept an amount that is lower that the market price average. Once they accept your offer, the agent you work with will write up the agreement, complete the purchase offer, include the buyer’s pre-approval letter, a copy of the check compared to the price, as well as the package for the short sale that was made. It is really important that all of your information goes into the packages, otherwise the whole short sale process will get delayed.