Short Sale Process

The road to a short sale can be tough, but that doesn’t mean it’s impossible. With proper planning and professional aid, anyone can make it through the short sale process, whether they’re on the buying or selling end. This page provides a quick guide to buying and selling a short sale in today’s market.

Selling a Short Sale

1. Verify property value.
If you’re working with a broker to sell your home, he or she can give you an official estimate of your home’s current worth. Otherwise, you will have to do your own analysis using the latest available market data for your neighborhood.

2. Work in additional costs.
Just like a regular sale, a short sale entails various closing costs that can drive up total expenses for both parties. These costs are usually incurred throughout the short sale process, such as legal fees and attorney’s fees.

3. Determine your debt.
The amount you owe against the home will be deducted from the total price. Depending on what you and your lender agree on, this can include late fees, past-due payments, taxes, and other expenses besides the mortgage itself.

4. Talk to your lender.
Once you have a plan on hand, call up your lender and ask about the short sale process. This varies from one bank to the other, so it’s important to get accurate information. It may take a while to get the right person on the line, but it’s worth the wait.

5. Find a buyer.
If your lender approves your short sale proposal, you can start marketing your home and looking for potential buyers. The short sale process usually sets a tight deadline for selling, so it may help to work with a real estate agent to help sell the home quicker.

Buying a Short Sale

1. Hire a realtor.
Look for an agent who has worked with short sales before, preferably in your area. This ensures that he or she is familiar with the short sale process and can help you get the best deal. Ask for references and call up previous clients to get firsthand feedback.

2. Look for a property.
Your realtor will give you a list of short sale properties for sale, but nothing’s stopping you from looking them up yourself. Generally, the longer a home has been on the market, the more its price has come down, and the better the deal you’re likely to get.

3. Contact and negotiate.
Once you’ve chosen a home, contact the seller and try to negotiate the price. Often, the seller is open to other offers as he or she needs to sell the home before a given date. You want your offer to be as close as possible to the appraised value without being too cheap.

4. Arrange your finances.
Your agent can also help you decide on financing and apply for a mortgage loan. Many sellers will only accept offers from pre-approved buyers, so it may be a good idea to get a pre-approval from your lender before making first contact.

5. Close the sale.
The closing is where ownership of the home is officially transferred from the seller to the buyer. Days before the closing, make sure you have everything in order, down to the most minor details. If all goes well, you can close the short sale within about 30 days.