HOW TO SHORT SALE A HOME

A short sale in real estate occurs when the outstanding obligations (loans) against a property are greater than what the property can be sold for. So How to short sale a home successfully involves these necessary steps.

HOW TO SHORT SALE HOMES:     INSTRUCTIONS

* STEP 1: Verify the value of your short sale property. If you are attempting to short sale homes with the help of a real estate broker, a broker with experience on how to short sale will provide you with an estimate of market value. If you are short selling the property yourself, do your own market analysis of the area and your property.

* STEP 2: Add up all the costs of selling the property through a short sale. If you are going to short sale homes using the services of a real estate broker, the broker will provide an estimate of closing costs. If you are short selling the property on your own (for sale by owner), call a local title company or real estate attorney and ask, as a seller, what the closing costs will be.

* STEP 3: Determine the amount owed against the property. This will be the total of all loans against the property.

* STEP 4: Do the calculations. Determine the amount that the foreclosure sale will be short by subtracting the total amount owing against the property from the estimated proceeds of the sale. On a short sale, this will be a negative number.

* STEP 5: How to short sale homes. Contact the lender or lenders if you have more than one. Enlist the help of the title or escrow agent to make contact. Talk to someone in the customer service department and tell them your unique distressed situation. They may direct you to a specific department. Talk to a supervisor or manager if possible; this person will have more authority on how to short sale.

* STEP 6: Ask the lender what its procedures are for how to short sale one of their loans most effectively. Some lenders are willing to work with you by reducing the amount owed or making other arrangements. Others will look to the agents involved (if any) or ANYONE else who's making money off the transaction to see if they are willing to make concessions and take discounts to make the transaction happen. Still other lenders will tell you that the debt is your responsibility, one way or the other. They will threaten to come after you for the short sale amount, and attach other personal assets of your in order to recoup the total amount that they originally lent to you.

THE MOST IMPORTANT PART OF HOW TO SHORT SALE SUCCESSFULLY: includes guarantees from the bank that the short amount they have agreed to take will FULLY satisfy your obligation to them. In this case, the threat that the bank will come after you for the remaining "short" amount is wiped away, because they have accepted this short sale amount as part of the resolution.

* STEP 7: Sell (close) the short sale home. Putting in a few bucks in order to get the deal closed might make sense to you if it rids you the obligation and stress of continuing on with the property.

Tips & Warnings - How to short sale successfully

* Closing costs will include title and escrow fees (if the seller is responsible for any portion of them, which will depend on your county), attorney fees, a portion of unpaid property taxes, re-conveyance fees, notary fees, delivery fees, documentary fees and/or transfer fees.

* If you are going to short sale homes without the assistance of a real estate broker, you will save the amount of the commission and have more to apply toward paying off the loan.

* Remember that the amount on your monthly loan statement does not include interest. Interest is accrued until the date a loan is paid off, so you may have as much as 30 days of interest on top of the balance owing, and you'll need to include this interest in the total payoff amount.

* If a property is sold under a short sale, the lender may require the buyer to make up the difference, either through a personal obligation or a collection.

* The IRS often gets involved with short sale foreclosures, because they are seen as a relief of debt and may be treated as income. Check with your accountant.

IF you enjoyed How to Short Sale Homes, you can read other interesting and helpful real estate and foreclosure articles here.

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