A short sale is what happens when a homeowner sells their home for an amount less than their mortgage. Short sales often happen in neighborhoods where homes have been devalued. Although a short sale can be a stressful event, it's often a better option than foreclosure. If you're under water on your mortgage and you need to sell your house, a short sale may be the right thing for you. Here's what you need to know about the short-sale process.
Contact a Real Estate Agent
Any time a homeowner wants to sell their house, the natural course of action is to start by contacting a real estate agent. The job of the real estate agent is to:
- Consult with the homeowner on ways to make the home more marketable
- List the property for sale
- Negotiate with the buyer
In the case of a short sale, a good real estate agent can also help the homeowner navigate the complex process of working with the bank. Because short sales can be complicated and the role of the real estate agent is so critical, it's important for the homeowner to find an agent who has short-sale experience. Homeowners who are interviewing real estate professionals should ask each candidate about their experience with short-sale homes.
Put Your Home Up for Sale
Once a real estate agent has been selected, it's time to put the home up for sale. Most real estate agents recommend that homeowners take time to fix up their house before listing it for sale. This is true of short sales as well.
Often, homeowners who want to sell their home as a short sale are in financial distress. While it may not be possible to remodel or upgrade appliances, real estate agents still recommend making basic repairs and deep-cleaning the property. Home buyers are willing to pay more money for homes in good condition. The more the buyer is willing to pay, the more likely the bank is to agree to the short sale.
When writing the listing, the real estate agent must note that the home is being sold as a short sale. A good real estate agent will know how to manage the disclosures properly while still attracting buyers.
Work with Your Bank
Working with the bank can be challenging for all parties involved. The bank may need the homeowner to submit a variety of documents including a hardship letter, authorizing the real estate professional and the bank to interact directly, and share financial statements, preliminary net sheets, and other documents. Every bank is different; this is why it's so important to work with a real estate professional who understands the process and has been through it before.
After the home is listed for sale, buyers will come see the property. Once there is an acceptable offer, it's forwarded to the bank. Negotiating with the bank can be time-consuming, and often deals fall through if the process takes too long. Some buyers are willing to wait a very long time as they negotiate with the bank, while others are not.
Short sales can take much longer than standard sales, especially if the first offer or two falls through. Homeowners who are selling their home as a short sale must be willing to wait out the process.
Get Started Today
If you're a Mount Juliet homeowner who is thinking about selling your home as a short sale, start by contacting a real estate agent. Your agent can help you decide whether a short sale is really the best course of action for you, and once you're ready, the agent can lead you through the process from start to finish.