HOW TO DO A SHORT SALE FORECLOSURE

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

Instructions

* STEP 1: Verify the value of your short sale foreclosure property. If you are attempting to do a short sale foreclosure sale with the help of a real estate broker, your broker 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 do a short sale foreclosure 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: Contact the lender or lenders if you have mone 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 destressed situation. They may direct you to a specific department. Talk to a supervisor or manager if possible; this person will have more authority.

* STEP 6: Ask the lender what it's procedures are for conducting a successful short sale foreclosure. 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 foreclosure amount, and attach other personal assets of your in order to recoup the total amount that they originally lent to you. Part of How to do a successful short sale foreclosure transaction 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 foreclosure property. 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 do a short sale foreclosure 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 do a short sale foreclosure 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 do a Short Sale Foreclosure, you can read other interesting and helpful real estate and foreclosure articles here. Thanks.

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