 
It is NO joke when you find yourself in the situation of deciding whether or not to go with
SHORT SALE when selling your Home.
The following is offered through 'the Detroit News' Homefinder Fri. March 20,2009 reprinted
from NAR- National Association of Realtors.
The article begins with...
If you're thinking of selling your home and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you might be facing a short sale.
A short sale occurs when the net proceeds from the sale won't cover your total mortgage
obligation and closing costs, and you don't have other sources of money to cover the
deficiency. A short sale is different from a foreclosure, which is when your lender takes
title of your home through a lengthy legal process and then sells.
1. Consider loan modification first.
If you're thinking of putting your home up for sale because of financial difficulties, and
you anticipate a short sale, first contact your lender to see if it has any programs to
help you stay in your home. Your lender might agree to a modification, such as refinancing
your loan at a lower interest rate, providing a different payment plan to help you get caught
up, or providing a forbearance period if your situation is temporary.
When a loan modification still isn't enough to relieve your financial problems, a short sale
could be your best option if the following conditions apply:
a. Your property is worth less than the total mortgage you owe on it.
b. You have a financial hardship, such as a job loss or major medical bills.
c. You have contacted your lender, and it's willing to entertain a short sale.
2. Hire a qualified team.
The first step to a short sale is to hire a qualified real estate professional and a real
estate attorney who specialize in short sales. Interview at least three candidates for each,
and look for prior short-sale experience. Work with those who demonstrate a thorough working
knowledge of the short-sale process and who won't try to take advantage of your
situation or pressure you to do something that isn't in your best interest. A qualified
real estate professional can:
a. Provide you with a comparative market analysis [CMA] or Broker price option [BPO].
b. Help you set an appropriate listing price for your home, market the home, and get it sold.
c. Put special language in the Multiple Listing Service that indicates your home is a
short sale and that lender approval is needed [all MLSs permit & some now require,
that the short-sale status be disclosed to potential buyers.]
d. Ease the process of working with your lender or lenders.
e. Negotiate the contract with the buyers
f. Help you put together the short-sale package to send to your lender [ or lenders, if
you have more than one mortgage] for approval. You can't sell your home without your
lender and any other lien holders agreement to the sale and releasing the lien so that
the buyers can get clear title.
3. Begin gathering documentation before any offers come in.
Your lender will give you a list of documents it requires to consider a short sale. The
short-sale "package" that accompanies any offer typically must include:
a. A hardship letter detailing your financial situation, and why you need the short sale
b. A copy of the purchase contract and listing agreement
c. Proof of your income and assets
d. Copies of your Federal income tax returns for the past two years. 4. Prepare for a lengthy waiting period.
Even if you're well organized and have all the documents in place, be prepared for a long
process. Waiting for your lender's review of the short-sale package can take several weeks
to months. Some experts say:
a. If you have only one mortgage, the review can take about two months
b. With a first and second mortgage with the same lender, the review can take about
three months.
c. With two or more mortgages with different lenders, it can take four months or longer
When the bank does respond, it can approve the short-sale, make a counteroffer, or
deny the short-sale. The last two actions can lengthen the process or put you back at
square one. [ Your real estate attorney and real estate professional, can work with your
lender's loss mitigation department on your behalf to prepare the proper
documentation and speed the process along.
5. Short Sales may not solve your financial problems.
a. you may be asked to sign a promissory note agreeing to pay back the difference in funds
b. you might have to pay taxes on any amount of your mortgage that is forgiven by lender.
c. a short Sale will impact your credit score less than a Foreclosure
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