A short sale is a real estate term for when an owner of a property sells their home for less than what is owed on the mortgage. In order for a short sale to be successful the lien holders (lenders/bank/mortgage company) must agree to the final sale price, which must be supported by the mortgage companies appraisal of the property.
A little background about myself: I entered the real estate market at the height of the recession in 2009 and focused strictly on short sales as a means of helping families in my community. I continued focusing on short sales until the general market emerged from it in 2014. I am well versed in the short sale process and know what your lender expects of me. As your real estate agent I will provide all of the documentation that your mortgage company needs. However, as the client here are the documents that you will need to prepare for your agent:
Hardship letter- this letter will outline the circumstances that led to you not being able to keep up with your payments (ex. medical issues, unemployed, etc). Your hardship letter should be at least half a page, no longer than one full page.
Medical documentation- if you are claiming a medical hardship
Tax return for previous two years
Pay stubs for previous 2 months
Similar to foreclosure, there are credit implications for selling your home via the short sale process. Unlike foreclosure, the repercussions are not as severe. After completing a short sale your FICO Credit Score will be negatively impacted and you will be not be allowed to purchase another home for the next 2-3 years. With foreclosure you cannot purchase a home for another 6-7 years. For this very reason I highly advise that homeowners seek a short sale as early as possible to avoid foreclosure penalties.
