Understanding Short Sales in the Ann Arbor Market: Sellers Have Options to Foreclosure
Monday, January 21, 2008
To begin, let's define a short sale - what is it? When a home owner is in default on their mortgage payments the bank may consider options to avoid foreclosure proceedings. A short sale means the seller's lender is willing to accept a discounted payoff to release the lien on an existing mortgage. Not all institutions will consider a short sale. The seller needs to make a good case for any lender to pursue this option. The following steps will help you get prepared and assess your options:
- Speak to a decision maker at your lender's office about your potential options
- Submit a letter of authorization to the lender for your real estate agent or lawyer to have access to your personal and private information, this will save you time in the long run
- Prepare a preliminary closing statement outlining all your potential closing fees (costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions)
- Prepare a hardship letter to make your case to the lender, describe your financial hardship and explain how you got into the situation
- Provide proof of income and assets - a lender will most likely not forgive you if you can show other available assets
- Provide copies of your bank statements to the lender - this offers further proof of your situation
- Prepare a Comparative Market Analysis - sometimes the reason you can't sell your home may be because the home values in your marketplace have dropped. A CMA will show a comparison of similar homes that are active, pending and sold in your marketplace. Your Realtor should be able to help you prepare this document.
- Provide a copy of your purchase and listing agreements - be prepared for the lender to negotiate commissions and fees.
