7 Tips for Short Sale Success
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Have to sell your home for less than it’s worth? Our seven tips will help you get the best price.
When you owe more on your home than it’s worth, but you have to sell, you need to squeeze every dollar
possible from the sale. Here are seven tips for navigating the short-sale process.
1. Know who you owe
A short sale has to be approved by any company that has a mortgage or lien against your home. That includes
your first, second, or even third mortgage lender, your home equity line lender; your homeowners or
condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking
to everyone early in the process. Ask what documents they’ll need from you.
2. Pick your short sale team
You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your
accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview at least three,
and listen carefully for signs that they understand the complexities of the short sale process.
Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample
short-sale package or for an example of a prior short-sale success.
3. Get your documents ready
Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a
hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what
you owe as well as copies of your federal income tax returns for the past two years.
4. Expect delays
Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan
modification program must respond to short-sale offers within 10 days, it may take weeks or months for your
lender to decide whether to allow you to sell your home in a short sale—and even longer if you must negotiate
with more than one lender or lienholder.
Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a
counteroffer, which can create further delays.
5. Anticipate demands
Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For
example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete?
6. Know the tax implications
Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income
to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as
income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask
if you’ll be required to report amounts “forgiven” by other lienholders, if applicable.
7. Consider how the short sale will affect your credit and what you must pay
Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt
forgiven may negatively affect your credit score, but a short sale typically damages your score less than a
foreclosure or bankruptcy.
Ask you lawyer whether you’ll be responsible for paying back the lenders’ loss. If the lender says it will forgive
any losses on the sale of your home, get that promise in writing.
When you owe more on your home than it’s worth, but you have to sell, you need to squeeze every dollar
possible from the sale. Here are seven tips for navigating the short-sale process.
1. Know who you owe
A short sale has to be approved by any company that has a mortgage or lien against your home. That includes
your first, second, or even third mortgage lender, your home equity line lender; your homeowners or
condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking
to everyone early in the process. Ask what documents they’ll need from you.
2. Pick your short sale team
You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your
accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview at least three,
and listen carefully for signs that they understand the complexities of the short sale process.
Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample
short-sale package or for an example of a prior short-sale success.
3. Get your documents ready
Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a
hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what
you owe as well as copies of your federal income tax returns for the past two years.
4. Expect delays
Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan
modification program must respond to short-sale offers within 10 days, it may take weeks or months for your
lender to decide whether to allow you to sell your home in a short sale—and even longer if you must negotiate
with more than one lender or lienholder.
Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a
counteroffer, which can create further delays.
5. Anticipate demands
Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For
example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete?
6. Know the tax implications
Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income
to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as
income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask
if you’ll be required to report amounts “forgiven” by other lienholders, if applicable.
7. Consider how the short sale will affect your credit and what you must pay
Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt
forgiven may negatively affect your credit score, but a short sale typically damages your score less than a
foreclosure or bankruptcy.
Ask you lawyer whether you’ll be responsible for paying back the lenders’ loss. If the lender says it will forgive
any losses on the sale of your home, get that promise in writing.
For Sale- To start viewing open one - For Sale - Aventura - Bal Harbour - Golden Beach - Hallandale - Hollywood -
Miami Beach - South Beach - Sunny Isles Beach .
Rental- Annual, Seasonal, Short Term (no less then 3 months). To start viewing open this link - Rental - Aventura -
Bal Harbour - Golden Beach - Hallandale - Hollywood - Miami Beach - South Beach - Sunny Isles Beach.
For all your your Real Estate Needs Buying or Selling.
Fast Service Guaranteed DavidZur@bellsouth.net or Call 786-683-2444.
Miami Beach - South Beach - Sunny Isles Beach .
Rental- Annual, Seasonal, Short Term (no less then 3 months). To start viewing open this link - Rental - Aventura -
Bal Harbour - Golden Beach - Hallandale - Hollywood - Miami Beach - South Beach - Sunny Isles Beach.
For all your your Real Estate Needs Buying or Selling.
Fast Service Guaranteed DavidZur@bellsouth.net or Call 786-683-2444.