Convincing your lender to authorize a short sale on your property can feel like an uphill climb. However, you can improve your chances with some best practices that can help convince your lender that it’s in their best interest to do so. Here are five tips for a successful short sale negotiation.
Make a List of Everyone You Owe
Every firm you have a mortgage with or that has a lien on your property will need to approve the short sale. For example, every mortgage lender, home equity line lender, or contractor with a lien on your property all fall into this category. Write a list of each lender and try to obtain the approximate amount owed.
Find a Team Who Can Help You
The short sale process can be hard to navigate on your own and having a team you can rely on can help lift some of the burdens. A group of professionals with extensive experience helping distressed homeowners and agents—such as the experts at Short Sale Cooperative—can help you get the process started and will stay with you to help all the way to the closing date.
Write a Hardship Letter
Your lender may need you to submit a hardship letter or complete a hardship affidavit when you’re filing for a short sale. In these situations, the letter is critical for stating why you cannot repay the mortgage on your home. Specify how your situation has altered, such as getting laid off or incurring unanticipated medical debt, and state that your situation is unlikely to get better soon.
Have Documents Ready to Go
Compile the documents your creditors and mortgage lenders request—such as your listing agreement and the hardship letter—that state why you need to sell your home quickly. You'll also need verification of your income and debt, as well as copies of your federal income tax returns from the previous two years. The faster you're able to provide these documents, the quicker you can get the process started.
Get an Appraisal
You’ll need to show that your mortgage is more than the property is worth. Banks will often require an appraisal as well as a broker's price assessment or broker’s price opinion. When submitting a short sale offer, your listing agent should include a comparative market study to support the price. Keep in mind that if your lender believes they would make more from a foreclosure than a short sale, then they will go with the former option.
You should be well prepared when contacting lenders if you follow these five tips for a successful short sale negotiation. You can also enlist Short Sale Cooperative; we’ll connect you with a short sale agent, manage the tedious bank calls, and handle most of the paperwork that comes with the process. Feel free to contact us with any questions about our services.