Purchasing a Short Sale:

Short sales are becoming much more common and slightly more manageable.  If you are determined to buy a short sale, don’t do it alone!

• Your chances of having an offer approved are multiplied if there is only 1 lender involved.  Having multiple lenders complicates the situation if only 1 approves of the short sale and the other does not.
• Even with 1 lender, it takes time to get an approval.
• Start with your highest or best offer.  Short sales usually leave little room to negotiate.  They will see plenty of offers and they will take the ones that nets them the highest dollar.

Turning your Property into a Short Sale:

If it’s getting harder and harder to making payments, you should consider a short sale.  They aren’t easy, but they are the better choice than a foreclosure.  Here are some things you should know:

• Having only 1 lender improves your chances of having your short sale approved.  If you have 2 to 3 lenders, it will get harder
• If you have more than 1 lender, you should be aware that other lender will likely be receiving some proceeds of the sale.
• If you are requesting full debt forgiveness, your short sale is likely to be approved.  Instead, ask for an unsecured note to pay the deficit of what you owe.  This will look better to them and they will be more likely to approve
• Ask for a short sale when you are still current on your mortgage payments.  Once you get behind, it may be too late.
• Every step will be a “hurry up and wait” game.  Move as fast as possible on your end to increase the chances of getting the short sale approved.
• There is a lot of paperwork involved.  Get all the requested paperwork back to the lender ASAP.
• You have a greater chance of getting a short sale approved if you have a life chance that has led to financial issues, such as: divorce, job loss, forced relocation, disability, death of a spouse, etc.
• Be positive that you can prove every claim to the bank.   Be very clear and honest with the lender about your situation.
• If you don’t tell the truth, you could be prosecuted for loan fraud, which is becoming more common.
• If any debt is excused, you could owe taxes on the portion that was forgiven.  Do your research called the Debt Forgiveness Act and talk with your tax advisor.
• Your credit will take a beating, but sometimes a short sale or foreclosure is a necessary evil.  Most cases, short sales are much easier on your credit than foreclosures.