Time to short sell your home?

What is a short sale? A short sale is when the amount of the outstanding loans is greater than the amount for which the home could sell. This can be caused by many causes, but most often is a result of a rapidly declining housing market.

For many homeowners, a short sale is preferential to foreclosure or bankruptcy when they can negotiate with the lender to forgive the remainder of the loan.

What steps do I take in a short sale?

First, find out the true market value of your property. A knowledgeable real estate professional, like Excel Funding Real Estate Services, Inc., will be able to give you a good idea of what your property will likely sell for based on a market analysis. Beware of websites where a computer estimates your property's market value since they may not have complete information or know important things like neighborhood trends and current listings.

Next, estimate your closing costs. My work in this area means I know to consider fees such as title report, appraisal, escrow, property taxes, and agent commissions to calculate your final costs upon closing.

Finally, call your lender and tell them of the situation. They may even have a specific department that oversees short sales. Ask about their exact procedures. Some lenders will be more willing to work with you than others. They may be able to decrease your loan principal or make other arrangements. Your lender will have to give consent for the final sale.