You're Underwater On Your Loan: 4 Things To Know About A Short Sale
You need to sell your home. Unfortunately, if you owe more money than it's worth, you may be looking at a short sale. That means you're going to be trying to sell your home for less than what you owe to your lender. While short sales are quite common right now, especially with condition of the current economy, you should know that there's more to it than simply putting your house on the market. One wrong move and you could find yourself in trouble down the road. Here are four things you need to know before you attempt a short sale.
Not All Agents Are the Same
Short sales require special handling and not all agents are experienced in the process. Before you sign with a sales agent, be sure you're comfortable with their level of experience dealing with short sales. If they seem unfamiliar with the process, or are unable to give you clear and understandable answers, thank them for their time and shop for another agent.
You Need Approval from Your Lender
If you need to sell your home under extenuating financial circumstances, you're going to need permission for your lender to attempt a short sale. This is particularly true if you owe considerably more than your home is worth. The lender will need to agree because the loan will not be completely satisfied. Attempting a short sell without lender consent could result in your sell falling through at the last minute.
You'll Need a Deficiency Waiver
Once you have your lenders approval, you'll be cleared to place your home on the market for a short sale. However, lender approval to sell won't automatically release you from owing the shortage amount. For that, you're going to need a deficiency waiver. This waiver, releases you from financial responsibility from the difference between the amount you sell your home for and the amount left owing on the original loan.
You Should Consult a Lawyer
The best way to protect yourself from potential headaches is to hire a real estate lawyer. A real estate attorney will be able to help you avoid potential tax problems associated with a short sale. They can also help you protect other assets that lenders may try to go after.
If you're facing foreclosure, and you need to sell your home fast, a short sale may your best option. You can click here for more info on short sales.
