3. How to Prepare for a Short Sale

If a homeowner is facing foreclosure and wishes to explore short selling their home as an alternative, it is crucial to get help from a trusted real estate agent. With the agent’s help, this is how the homeowner will prepare to short sell their home:

1. Agreement. The homeowner must get the lender to agree to sell the home at a loss.
2. Documentation. If the lender agrees to a short sale, the homeowner will need to provide documentation to the lender indicating that he or she is financially incapable of paying for the loan. It depends on the lender, but the documentation usually required can include:
   • A hardship letter explaining why the homeowner is unable to pay the mortgage.
   • Recent tax return forms, W2 forms, and/or 1099s.
   • Recent paystubs.
   • Financial statement detailing list of assets and liabilities.
3. Consultation. The last thing a financially stressed homeowner needs is more financial stress. The homeowner should consult with an attorney to find out whether or not difference between what the home is worth and what the home sells for will be taxed.
4. Communication. Everyone needs to communicate during this process. The homeowner needs to communicate with the lender to make sure the lender has everything needed to apply for the short sale. The homeowner and the lender need to be in constant contact with potential buyers to make sure they stick around.

Real Estate Tips About Appraisals >Lender Appraisal Many sellers think that the price of their home is determined solely by what they are willing to accept and what the buyer is willing to pay. However, there is one more variable that can affect the sale of a home assuming that a bank loan is involved -- the lender's appraisal. To protect the interest of their investors, the buyer's mortgage lender hires a licensed appraiser to give an independent, objective opinion of what the property is worth. The appraiser compares the house with similar homes in the neighborhood that have recently sold. Square footage, amenities and the condition of the home are taken into account. Renovations and home improvements made by the seller usually add value to the home, while defects such as needed repairs or code violations decrease the property's value. The seller's real estate agent can provide the appraiser with up-to-date information about neighboring homes that have sold to support the seller's asking price. See All Tips In The "About Appraisals" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories > Real Estate Trivia Q  What is the world's longest wall? A  The Great Wall of China, at a length of 2,150 miles, nearly three times the length of Britain. See More Real Estate Trivia >

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