Do you need to short sell your home?
What is a short sale? A short sale happens when the value of a home is less than the amount of the outstanding loans. This may be caused by many reasons, but most commonly is a result of a rapidly declining housing market.
For many homeowners, a short sale is preferential to foreclosure or bankruptcy when they can negotiate with the lender to forgive the difference.
What steps do I take in a short sale?
First, assess the true market value of your house. A good REALTOR®, like Future Home Realty, will be able to give you a reasonable idea of what your home should likely sell for based on prior sales of similar houses in the neighborhood. Be careful of websites where a computer estimates your property's market value since they may not have complete information or know important things like neighborhood trends and current listings.
Next, calculate your closing costs. My work in this area has taught me to account for fees like title report, appraisal, escrow, property taxes, and agent commissions to tally your final costs at closing.
Finally, get in touch with your lender and tell them of your situation. They may even have a specific department that deals with short sales. Ask about their specific process. Some lenders will be more willing to work with you than others. They may be able to decrease the amount owed or make other arrangements. Your lender will have to give approval for the final sale.