Short sales have become the only way out for some sellers who owe more on their mortgages than their houses are worth. For struggling borrowers, it’s a chance to avoid foreclosure. While helpful, short sales can be stressful, time consuming and may lead to harsh consequences if not done properly. Here are five tips you must know when short selling your home.
1. Choose an Agent Experienced in Short Sales
Hire a real estate agent experienced in short sales or a licensed debt negotiator.
2. Understand Potential Consequences of Short Sales
It’s crucial for borrowers to understand whether the lender agrees to waive the deficiency, or the balance that will be left on the loan after the sale.
3. You Can Negotiate Your Way out of Deficiency
When negotiating a short sale, many lenders don’t voluntarily offer to release you of liability on the remaining balance of your loan. But you can ask to negotiate a waiver.
4. Talk to an Attorney
Real estate agents who are experienced in short sales can coordinate the transaction with the bank and tell you what to expect of the process. There are many issues that borrowers need to discuss that cannot be discussed with a shortsale specialist. If you don’t understand the contract you are signing or the potential consequences of a short sale, you should consult with a lawyer.
5. Keep Up with HOA/Condo Association Fees
Try not to be more than three months behind in your Condo Association fees. The fees can snowball and make the sale difficult to close as banks are loathe to pay these fees.