How Does the Short Sale Process Work?

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The first step in a short sale generally is to contact your lender and determine what is required to initiate the process. You may also want to consult with and/or hire a Realtor, real estate lawyer, or other industry professional to guide you through the process. If you work with a Real Estate agent, you will be required to submit a Letter of Authorization to your lender to give the company permission to discuss your private financial matters with your agent.

Once you have been in contact with your lender, you will be given instructions for how to proceed with requesting a short sale. You likely will be asked to provide documentation, such as a “Hardship Letter” and current bank and financial statements, to determine whether you and your property qualify for a short sale. It can take a few weeks or a few months to get an answer from your lender about whether you qualify and complete the transaction.

Other Real Estate Law FAQs

Q: Is a Short Sale Right for Me?
A: If you are wondering if a short sale of property is right for you, you should know that it is a highly individualized and personal issue. However, there are some … More
Q: What Are the Alternatives to a Short Sale of My Property?
A: A short sale of property may be the best option for curing your current housing problem, but it is not the only option. You may be able to arrange for a loan … More
Q: Do I Have to Pay a Realtor Sales Commission in a Short Sale?
A: In standard home transactions, the seller and buyer reach an agreement for how the sales commission to a Realtor will be paid. Sometimes a buyer and seller will agree … More
Q: Will Selling my Home in a Short Sale Affect My Credit Score?
A: Selling your home in a short sale will negatively affect your credit score, but how much will depend on many factors. Your payment history, your ability to pay other … More
Q: Why Would a Lender Agree to a Short Sale?
A: Banks and other lenders generally agree to short sales in order to avoid having to foreclose on a property and take it into their inventory. Most lenders would rather … More
Q: Will My Lender Accept the Short Sale as Payment in Full for My Loan?
A: Maybe. Your lender is not required to accept the short sale payment to satisfy your loan amount. The company may decide that you and your property do not qualify for … More
Q: Can My Lender Come After Me in Court for the Loan Balance I Owe After a Short Sale?
A: This depends in part on whether the property in the short sale is located in a judicial or a non-judicial foreclosure jurisdiction. In non-judicial foreclosure, also … More
Q: Do I Qualify for a Short Sale?
A: In order to sell a home in a short sale, the borrower generally must be able to show they are unable to pay their mortgage and currently are experiencing a financial … More
Q: What is a Short Sale?
A: A short sale is where a homeowner sells their home for less money than they owe on the property. The owner of the home negotiates a discounted payoff with their … More